SM Auto Stamping (SMAUTO) Q2 FY27 Profit Plunges 60% Despite Strong Revenue Growth
SM Auto Stamping's Q2 FY27 revenue grew 27% year-on-year, but profit fell sharply from the previous quarter as costs rose faster than sales.
SM Auto Stamping reported a 26.8% YoY revenue rise to ₹43.28 crore in Q2 FY27. However, net profit fell 59.8% sequentially to ₹1.03 crore, squeezed by a sharp increase in material costs and depreciation.
For auto component makers, a strong top line is only half the story when input costs run ahead. SM Auto Stamping's September quarter shows that tension clearly, with revenue surging but profitability taking a sharp sequential hit.
The company's quarterly revenue reached ₹43.28 crore, a 26.8% jump from a year ago and a 16.4% rise from the June quarter. Yet net profit fell to ₹1.03 crore, down nearly 60% from the ₹2.56 crore posted in Q4 FY26. The net profit margin compressed by 450 basis points to just 2.4%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 (Sep 2026) | PreviousQ4 FY26 (Mar 2026) |
|---|---|---|
| Revenue (₹ Cr) | 43.28 | 37.19 |
| Profit (₹ Cr) | 1.03 | 2.56 |
| Net Profit Margin (%) | 2.4 | 6.9 |
Why the profit fell despite higher sales
The profit squeeze came from costs rising faster than revenue. According to a report from scanx.trade, the cost of materials consumed surged 38.2% year-on-year, outpacing the 26.8% revenue growth. Total expenses climbed 21.1% from the previous quarter, with depreciation rising 19% and interest costs falling 11%.
This suggests the company is running its plants harder to meet demand, but raw material inflation is eroding the gains. The sequential margin collapse from 6.9% to 2.4% shows how quickly that pressure can hit.
The outlook for the rest of the year
Management has not provided explicit forward guidance, notes an analysis from StockFin.ai. The broader sector outlook offers a mixed read. A report by Motilal Oswal Financial Services, cited by Awaz The Voice, expects auto sector margins to recover gradually from Q3 FY27 as price hikes offset higher costs.
However, risks like El Niño and geopolitical tensions remain. For SM Auto, the path to better profitability hinges on whether it can pass on cost increases or see a moderation in input prices.
Key Points
- Revenue grew robustly by 26.8% year-on-year and 16.4% quarter-on-quarter, indicating strong demand for its components.
- Net profit fell 59.8% sequentially as material costs rose 38.2% year-on-year, squeezing the net margin to 2.4%.
- The company is deleveraging, with reduced borrowings and positive operating cash flow for the half-year, as per a scanx.trade report.
- Management has not issued specific guidance, leaving the near-term margin trajectory dependent on cost trends and pricing power.
Hexa Perspective
The quarter underscores the volatile nature of profitability in the auto ancillary space. While the top-line momentum is undeniable and the balance sheet is strengthening, the margin performance is a stark reminder of the sector's sensitivity to input costs.
Investors are left weighing solid volume growth against thin and fluctuating margins. The stock's valuation, at a significant discount to the industry PE, may already reflect these cyclical pressures. The next few quarters will test whether the revenue growth can translate into more stable earnings.
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