Systematic Industries (SYSTEMATIC) Q2 FY27 Profit Jumps 44% as Interest Costs Ease
The steel wire maker's Q2 FY27 net profit surged 44.4% year-on-year to ₹13 crore, driven by lower interest costs and a steady rise in revenue.
Systematic Industries posted a 44.4% jump in Q2 FY27 net profit to ₹13 crore. Revenue grew 22.4% to ₹311 crore, while a sharp drop in yearly interest expense helped expand the net profit margin.
For a wire manufacturer whose main input is steel, growth often means just keeping pace with raw material costs. Systematic Industries’ September quarter shows it moving past that, with profit rising faster than sales for the first time in recent periods.
The numbers tell a clear story of expansion. Revenue reached ₹311 crore, up 22.4% from a year ago and 4% from the June quarter. Net profit grew even faster, climbing 44.4% year-on-year to ₹13 crore. The net profit margin improved to 4.2%, 70 basis points higher than Q2 FY26.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 311.0YoY +22% | 299.0 | 254.0 |
| Profit (₹ Cr) | 13.0YoY +44% | 12.0 | 9.0 |
| Net Profit Margin | 4.2%YoY +20% | 4.0% | 3.5% |
Why profit outpaced sales
The primary driver was a steep 60% year-on-year drop in interest expense, as noted by research from Sector Alpha. The company became net debt-free after its 2025 IPO, removing a major drag on earnings. This benefit more than offset a 50% decline in other income and kept overall costs in check.
Revenue growth itself was supported by a robust steel demand environment. A PIB report shows India's finished steel consumption grew 8% year-on-year in September 2026, driven by infrastructure and power sectors.
The path to better margins
Management has set a target to expand margins to 10% over the next two years, according to an investor presentation. The strategy hinges on new, higher-margin products like optical ground wire (OPGW) and optical fibre cable (OFC).
The company’s first EPC order from Power Grid and a new-product pipeline of ₹25 crore mark the start of this shift. Furthermore, capacity is set to rise 72% to 172,000 tonnes from November 2026 through two acquisitions.
A valuation discount persists
Despite the strong profit growth, Systematic Industries trades at a P/E of 26.1, a 35% discount to its industry P/E of 40.4. This gap reflects the market's wait for proof that the margin expansion from new segments is sustainable and can lift earnings meaningfully.
Key Points
- Net profit surged 44.4% year-on-year, significantly outpacing a 22.4% rise in revenue.
- A sharp reduction in interest expense, following the company's net debt-free status, was the key profit driver.
- Management is targeting a 10% margin in two years, banking on new fibre-optic products and expanded capacity.
- The stock trades at a notable discount to the industry, awaiting execution on the promised margin improvement.
Hexa Perspective
The quarter confirms the earnings benefit of a cleaner balance sheet. The real test is whether the coming capacity ramp and product mix change can deliver the double-digit margins management has promised. If steel prices remain supportive and new orders convert, the current valuation discount could narrow. However, the business remains capital-intensive, with cash often trailing reported profit, making consistent execution the critical variable for the next few quarters.
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