Shradha Realty (SHRADHA) Q2 FY27 Profit Plunges 69% as Income Dries Up
Revenue grew 16% year-on-year, but a sharp decline in other income and rising interest costs led to a steep 69% drop in net profit for the September quarter.
Shradha Realty's Q2 FY27 saw revenue rise to ₹22 crore, but net profit collapsed to ₹2.2 crore. The dramatic squeeze was driven by a 61% drop in other income and a 50% jump in interest expense.
For a real estate developer, revenue growth should signal strong project sales. Shradha Realty’s 16% year-on-year increase in the September quarter, however, was overshadowed by a collapse in profitability. The net profit fell 69% from a year ago, revealing a business where core operations are being swamped by other financial moves.
The numbers tell a story of diverging trends. Revenue reached ₹21.99 crore, but profit shrank to just ₹2.22 crore. The net profit margin, a stark 10.1%, is down 28 percentage points from the same quarter last year.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 21.99YoY +16% | 23.68 | 18.89 |
| Profit (₹ Cr) | 2.22YoY -69% | 4.20 | 7.26 |
| Net Profit Margin | 10.1%YoY -74% | 17.7% | 38.4% |
The disappearing other income
A key driver of last year’s strong profit was a high level of other income, which contributed ₹6.31 crore in Q2 FY26. This quarter, that figure fell 61% to ₹2.47 crore, as noted in the company’s financials. This sharp drop removed a major pillar of earnings, turning what was a high-margin quarter into an ordinary one.
Rising costs and a stretched balance sheet
At the same time, interest expense jumped 50% year-on-year and 75% sequentially to ₹1.21 crore. This suggests higher debt levels or increased borrowing costs, pressuring profits from another angle. A report from Tapetide.com indicates the company has a high debtor days figure of 175, pointing to stretched working capital.
The company operates through three engines: selling commercial blocks, infrastructure contracting, and a nascent residential pipeline. According to StockScans.in, the commercial sales from properties like Shradha House provide lumpy revenue, while new residential projects like Abhiman Niwas are still in planning.
Key Points
- Revenue growth was overshadowed by a 69% plunge in net profit year-on-year.
- Profitability was severely hit by a 61% drop in other income and a sharp 50% rise in interest costs.
- The business model relies on sporadic commercial property sales, making quarterly earnings volatile.
- Working capital appears stretched, with high debtor days potentially impacting cash flow.
Hexa Perspective
This quarter highlights Shradha Realty’s vulnerability to non-operational income. The business needs consistent project execution and sales to build a stable earnings base, rather than relying on one-off gains. The rising interest cost, against a debt-to-equity of 0.34, warrants monitoring for future cash flows.
The stock’s one-year return of -32% and a P/E of 8.2, trading at a 76% discount to its industry, reflect the market’s discount for this volatility. Investors are weighing the promise of a project pipeline against the reality of quarterly execution and financial management.
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