Vikram Solar's Profit Margins Squeezed Despite Strong Revenue Growth
Revenue jumped 37.9% YoY, but profit fell sharply, compressing net profit margin to just 1.3%.
Vikram Solar posted robust revenue growth in Q1 FY27, but profitability collapsed. Net profit margin fell sharply from 11.8% a year ago to just 1.3%.
Vikram Solar delivered a quarter of sharply contrasting financial results. While revenue growth remained robust, profitability collapsed, pointing to significant margin pressure in the solar equipment maker's latest quarter.
Revenue for Q1 FY27 grew 37.9% year-on-year to ₹1,563 crore, continuing a strong sequential growth trend. However, profit after tax (PAT) plunged 85.2% from the same quarter last year to just ₹19.8 crore. This dramatic divergence crushed the net profit margin, which fell to 1.3% from 11.8% a year ago.
The recent quarterly trend shows a clear pattern of margin compression even as sales volumes have risen.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ1 FY27 | PreviousQ4 FY26 | Same quarter LYQ1 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 1,563.09YoY +38% | 1,452.82 | 1,133.58 |
| Profit (₹ Cr) | 19.78YoY -85% | 110.42 | 133.36 |
| Net Profit Margin (%) | 1.3YoY -89% | 7.6 | 11.8 |
Key Points
- The trailing twelve-month (TTM) net profit margin stands at 6.8%, well above the latest quarter's figure, suggesting the Q1 squeeze may be acute.
- The company maintains a strong balance sheet, with a low debt-to-equity ratio of 0.03 and a high return on capital employed (ROCE) of 34.1%.
- Despite the earnings pressure, the stock trades at a significant discount to its industry, with a P/E of 13.7 versus an industry average of 46.5.
Overall, the results highlight a challenging operating environment where top-line growth is not translating to the bottom line. The key question for Vikram Solar is whether this margin squeeze is a temporary issue or a sign of a more persistent shift in its business economics.
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· VIKRAMSOLR
(BSE)
ISIN: INE078V01014
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