Ellenbarrie's margin slips as costs outpace revenue growth
Standalone net profit declined 2.91% year on year as the tax rate rose, while other income contributed 35.71% of profit before tax.
Filed 04 Nov 2026, 19:32 IST · after market close · Ellenbarrie Industrial Gases Ltd (ELLEN)
Key takeaways
- Standalone operating margin narrowed 2.34 percentage points year on year to 35.20% as expenses grew 33.02%, faster than revenue growth of 28.20%.
- Net profit fell 2.91% year on year despite 19.92% growth in profit before tax, as the tax rate rose 17.50 percentage points to 25.62%.
- Other income contributed 35.71% of profit before tax, while the company commissioned a new on-site plant in East India during Q2FY27.
Price around the results
Revenue grew, but operating leverage weakened
Standalone revenue rose 28.20% year on year and 15.80% sequentially, but expenses grew faster at 33.02% and 21.28%, respectively. That reduced operating margin by 2.34 percentage points year on year and 2.92 percentage points sequentially to 35.20%. The margin remains well above the 13.42% median for 104 reported Commodities peers, a gap of 21.78 percentage points.
Higher tax and financing costs diluted profit conversion
Profit before tax increased 19.92% year on year, but net profit declined 2.91% as the tax rate rose to 25.62% from 8.12%, an increase of 17.50 percentage points. Interest expense also rose 136.19% year on year and 27.18% sequentially. Other income accounted for 35.71% of profit before tax, making reported earnings less reflective of operating profit alone.
Margin recovered from Q4FY26 but eased for a second quarter
Operating margin improved from 31.08% in Q4FY26 to 38.12% in Q1FY27 before easing to 35.20% in Q2FY27. This is a sequential decline, but not a third straight quarterly fall. Revenue also advanced from Rs 87.43 cr in Q4FY26 to Rs 114.32 cr in Q2FY27.
Expansion adds capacity while transport costs remain under discussion
The presentation said the company commissioned a new on-site plant in East India during Q2FY27. Management said new merchant plants in North and West/Central India are planned for FY28, while a 220 TPD bulk facility in North India is work in progress. Management also said higher transport costs are pressuring the business and that price increases to offset them are under negotiation.
No immediate market reaction after the post-close filing
The results were filed after market close, so there is no post-results move to assess yet. After the last three results, the stock rose each time, with a median absolute move of 3.64%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹114 cr | ₹99 cr | +15.80% | +28.20% |
| Other income | ₹17 cr | ₹17 cr | +0.29% | +35.69% |
| Expenses | ₹74 cr | ₹61 cr | +21.28% | +33.02% |
| Operating profit | ₹40 cr | ₹38 cr | +6.94% | +20.19% |
| Operating margin (%) | 35.20% | 38.12% | — | — |
| Interest | ₹2 cr | ₹2 cr | +27.18% | +136.19% |
| Depreciation | ₹7 cr | ₹6 cr | +10.33% | +36.61% |
| Profit before tax | ₹48 cr | ₹46 cr | +3.14% | +19.92% |
| Tax | ₹12 cr | ₹12 cr | +6.78% | +279.01% |
| Net profit | ₹36 cr | ₹35 cr | +1.97% | -2.91% |
| EPS (₹) | ₹2.53 | ₹2.48 | +2.02% | -3.07% |
Operating margin of 35.20% compares with a Commodities sector median of 13.42% across 104 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The Kurnool and Uluberia 2 plants are expected to be key growth drivers during FY27.
- The industrial gases market is expected to grow at approximately 7.5% CAGR from 2024 to 2028.
Expansion
- The company commissioned a new on-site plant in East India during Q2FY27.
- New merchant plants in North and West/Central India are planned to come up in FY28.
- A 220 TPD bulk facility in North India is work in progress.
Problems & risks
- Higher transport costs are a pressure, and price increases to offset them are under negotiation.
What to watch
- Whether operating margin holds above 35.20% after the sequential decline of 2.92 percentage points.
- Whether expenses continue to grow faster than revenue, after rising 21.28% versus revenue growth of 15.80% sequentially.
- Whether the East India on-site plant and the Kurnool and Uluberia 2 plants contribute to growth, as highlighted by management.