HP Adhesives returns to profit, but margin remains below sector peers
Revenue growth outpaced expenses sequentially, while higher interest and a 61.62% tax rate kept consolidated net profit at Rs 0.28 cr.
Filed 05 Nov 2026, 19:36 IST · after market close · HP Adhesives Ltd (HPAL)
Key takeaways
- Consolidated net profit returned to Rs 0.28 cr in Q2FY27 from a Rs 0.91 cr loss in Q1FY27 as revenue grew 19.73% and expenses grew 14.49%.
- Operating margin improved 4.38 percentage points to 3.85%, but a 54.32% rise in interest and a 61.62% tax rate limited the profit conversion.
- HP Adhesives’ 3.85% operating margin was 9 percentage points below the 12.85% median for 126 reported Commodities-sector peers.
Price around the results
Revenue growth moved the quarter back into profit
On a consolidated basis, revenue rose 19.73% sequentially to Rs 75.93 cr, while expenses increased 14.49% to Rs 73.00 cr. That operating leverage lifted operating profit from a Rs 0.34 cr loss in Q1FY27 to Rs 2.93 cr, and net profit moved from a Rs 0.91 cr loss to Rs 0.28 cr. EPS consequently improved from negative Rs 0.10 to Rs 0.03.
Interest and tax absorbed much of the operating recovery
Operating margin expanded 4.38 percentage points to 3.85% because revenue grew faster than expenses. Interest expense increased 54.32% sequentially, while the tax rate rose 28.5 percentage points to 61.62%. Other income contributed 48.65% of profit before tax, making the reported net profit less reflective of operating profit alone.
Margin remains well below the reported sector median
HP Adhesives’ 3.85% operating margin was 9 percentage points below the 12.85% median among 126 Commodities-sector peers that had reported the same quarter. The company ranked 14th from the bottom on this measure. The available quarterly trend shows a sharp rebound from the -0.53% margin recorded in Q1FY27, rather than a longer multi-quarter direction.
The filing came after market close
The consolidated results were filed after market close on 5 November 2026. A post-results stock move is therefore not part of this update.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹76 cr | ₹63 cr | +19.73% |
| Other income | ₹0 cr | ₹1 cr | -66.04% |
| Expenses | ₹73 cr | ₹64 cr | +14.49% |
| Operating profit | ₹3 cr | ₹-0 cr | — |
| Operating margin (%) | 3.85% | -0.53% | — |
| Interest | ₹1 cr | ₹1 cr | +54.32% |
| Depreciation | ₹1 cr | ₹1 cr | +1.57% |
| Profit before tax | ₹1 cr | ₹-1 cr | — |
| Tax | ₹0 cr | ₹-0 cr | — |
| Net profit | ₹0 cr | ₹-1 cr | — |
| EPS (₹) | ₹0.03 | ₹-0.10 | — |
Operating margin of 3.85% compares with a Commodities sector median of 12.85% across 126 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 3.85% after the Q2FY27 rebound.
- Whether interest expense growth moderates from the 54.32% sequential increase.
- Whether net profit remains above Rs 0.28 cr without other income contributing 48.65% of profit before tax.