Shilchar margin rebounds 4.42 points as Q2 revenue jumps 43.09% QoQ
The standalone recovery followed a slow Q1, with expenses growing slower than revenue, though other income remained 14.88% of pre-tax profit.
Filed 28 Oct 2026, 18:05 IST · after market close · Shilchar Technologies Ltd (SHILCTECH)
Key takeaways
- Standalone revenue grew 43.09% quarter on quarter as expenses grew 35.54%, lifting operating margin by 4.42 percentage points to 20.8%.
- Net profit rose 58.10% sequentially despite a 2.14-percentage-point increase in the tax rate, while other income contributed 14.88% of pre-tax profit.
- Shilchar's 20.8% operating margin was 9.77 percentage points above the 11.03% median for 47 Industrials peers that had reported.
Price around the results
Revenue recovery after the slow Q1
Shilchar Technologies' standalone business recovered sharply in Q2FY27, with revenue up 43.09% sequentially and operating profit up 81.60%. Revenue growth outpaced the 35.54% increase in expenses, which helped operating margin recover to 20.8% from 16.38% in Q1FY27. Management said business picked up notably after the slow first quarter, with North American exports gaining momentum.
Better operating leverage, but profit quality needs tracking
The 4.42-percentage-point margin expansion came from expenses growing slower than revenue, rather than from lower interest costs, which were unchanged sequentially. Net profit grew 58.10%, below the 62.77% increase in pre-tax profit because the tax rate rose 2.14 percentage points to 27.82%. Other income accounted for 14.88% of pre-tax profit, so reported earnings were not entirely operating-driven.
Margin remains well above the Industrials peer median
Shilchar's 20.8% operating margin was 9.77 percentage points above the 11.03% median among 47 Industrials companies that had reported the quarter. The available quarterly trend shows a sequential margin recovery from 16.38% in Q1FY27, rather than a longer run of quarterly data. Management said Middle East conditions improved during Q2 but had not fully normalised, while shipping and logistics cost pressures had eased only partially.
Management points to exports and April 2027 capacity
Management said further improvement in Middle East conditions should raise the export share and improve margins over coming quarters. The company said additional capacity is expected to come online from April 2027, and that the Gavasad expansion remains on track for commissioning then, with civil foundations completed and major production equipment ordered. The results were filed after market close on 28 October 2026, so there is no market reaction to assess yet.
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 |
|---|---|---|---|
| Revenue | ₹193 cr | ₹135 cr | +43.09% |
| Other income | ₹7 cr | ₹7 cr | -5.29% |
| Expenses | ₹153 cr | ₹113 cr | +35.54% |
| Operating profit | ₹40 cr | ₹22 cr | +81.60% |
| Operating margin (%) | 20.80% | 16.38% | — |
| Interest | ₹0 cr | ₹0 cr | +0.00% |
| Depreciation | ₹1 cr | ₹1 cr | +1.89% |
| Profit before tax | ₹46 cr | ₹28 cr | +62.77% |
| Tax | ₹13 cr | ₹7 cr | +76.28% |
| Net profit | ₹33 cr | ₹21 cr | +58.10% |
| EPS (₹) | ₹28.83 | ₹18.24 | +58.06% |
Operating margin of 20.80% compares with a Industrials sector median of 11.03% across 47 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.
This quarter
- Business picked up notably in Q2FY27 after a slow Q1, while North American exports gained momentum.
- Margins recovered sequentially in Q2FY27 compared with Q1FY27.
Guidance & outlook
- The company expects Middle East conditions to improve further, increasing export share and improving margins over coming quarters.
Expansion
- Additional capacity is expected to come online from April 2027.
- The Gavasad expansion is on track for commissioning in April 2027, with civil foundations completed and equipment ordered.
Problems & risks
- The continuing West Asia crisis affected the export business, particularly exports to the Middle East, during Q1FY27.
- Middle East conditions had improved but had not fully normalised during the quarter.
- Shipping and logistics cost pressures had eased only partially.
What to watch
- Whether operating margin holds above 20.8% as Middle East export conditions evolve.
- Whether expenses continue to grow below the 43.09% sequential revenue growth rate.
- Whether other income's 14.88% share of pre-tax profit declines as operating earnings contribute more.