Servotech (SERVOTECH) Q2 FY27 Profit Soars 20x Even as Revenue Slips from Q1 Highs
Servotech's Q2 FY27 profit surged nearly 2,000% year-on-year, driven by a sharp margin expansion that offset a sequential dip in revenue from the previous quarter.
Servotech Renewable Power delivered a standout quarter where profitability took center stage. While revenue fell 27% from Q1, net profit still grew 4% sequentially, with margins expanding to a five-quarter high.
For Servotech Renewable Power, the September quarter was about proving profitability can hold even when the top line takes a breather. The company delivered a net profit of ₹8.37 crore, up nearly 20 times from a weak year-ago base, even as revenue stepped back from the highs of the previous three quarters.
The numbers tell a story of two trends. Year-on-year, revenue grew 48% to ₹157.23 crore. Sequentially, it fell 27% from ₹215.79 crore in Q1. Yet, profit inched up 4% quarter-on-quarter, with the net profit margin climbing 160 basis points to 5.3%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 157.23YoY +48% | 215.79 | 106.49 |
| Profit (₹ Cr) | 8.37YoY +1992% | 8.05 | 0.40 |
| Net Profit Margin | 5.3%YoY +1225% | 3.7% | 0.4% |
Why Margins Expanded on Lower Sales
The profit surge is partly a recovery from a deeply disrupted Q2 last year, which the company had described as hit by policy-led delays. More importantly, the company kept a larger share of each rupee of sales this quarter.
According to ipocentral.in, the consolidated EBITDA margin reached 13.13%, second only to Q3 FY26. This efficiency gain came even as total expenses fell 28% sequentially, with employee costs and depreciation declining.
The Interest Cost and Growth Trade-off
A key pressure point was interest expense, which nearly doubled year-on-year to ₹5.09 crore. This reflects higher borrowings used to fund manufacturing expansion and working capital for government projects.
Management, cited by Inve, has pivoted towards debt for growth, stating there is "no logic to go towards equity." The company is focusing on operational consolidation and working capital normalization for the rest of FY27.
A Pipeline of New Products
Managing Director Raman Bhatia, quoted in a company release, pointed to positive momentum and new product launches. The company recently unveiled next-generation solar inverters and secured a BEE 5-star rating for its DC fast EV chargers.
Its strategy is shifting towards an integrated clean-energy provider. A report from arthneeti.com notes the company is redirecting capital from low-margin medical equipment towards its renewable and EV businesses.
Key Points
- Servotech's Q2 FY27 net profit jumped 1992% year-on-year, largely due to recovery from a weak base and significant margin improvement.
- Despite a 27% sequential revenue decline, profit grew 4% QoQ as the net profit margin expanded 160 basis points to 5.3%.
- Higher interest costs, up 96% YoY, reflect increased borrowing for capacity expansion, a trade-off for future growth.
- Management is focusing on operational consolidation, new product launches, and scaling its battery energy storage system (BESS) business.
Hexa Perspective
The quarter shows Servotech can deliver profits on a leaner revenue run-rate, a positive sign of operating discipline. The margin expansion is credible, but the sustainability of this 13%-plus EBITDA margin will be tested when sales volume returns to the ₹210+ crore range.
The near-term story hinges on managing the cost of growth. While debt is funding expansion, the near-doubling of interest expense year-on-year is a tangible drag. Investors are weighing this against a robust industry outlook for solar and EV infrastructure, where Servotech's new products aim to capture demand.
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