Sirca's Q2 revenue rose 23.22%, but input costs trimmed margin
A 3.20 percentage-point fall in the tax rate helped net profit grow faster than pre-tax profit.
Filed 06 Nov 2026, 13:41 IST · Sirca Paints India Ltd (SIRCA)
Key takeaways
- Consolidated revenue grew +23.22% QoQ to Rs 160.2 cr, but expenses rose faster at +23.86%.
- Operating margin narrowed 0.42 percentage points to 18.20% as management cited higher input costs.
- Net profit rose +25.35% QoQ to Rs 20.32 cr, helped by a tax-rate decline of 3.20 percentage points.
Price around the results
Revenue momentum held, but profit growth lagged sales
Sirca's consolidated revenue increased +23.22% sequentially, while operating profit grew more slowly at +20.45%. The resulting margin compression was limited to 0.42 percentage points, despite expenses rising +23.86%. Management said Q2 industry demand held up through pricing and premiumisation.
Input costs pressured margins; tax aided net profit
Management attributed the lower margin to higher input costs and said Brent crude rose from about $70 a barrel in early July to nearly $97 by end-September. The 3.20 percentage-point decline in the tax rate helped net profit growth of +25.35% exceed pre-tax profit growth of +20.14%. Other income contributed 4.47% of pre-tax profit, so it was a modest support rather than the main driver of earnings.
Margin remained above the consumer-discretionary peer median
Sirca's 18.20% operating margin was 6.78 percentage points above the 11.42% median for the 287 Consumer Discretionary peers that had reported the quarter. Sequentially, however, margin moved down from 18.62%, marking a second consecutive quarter in the available trend with a lower margin.
Management points to pricing, Wembley and seasonal demand
Management said calibrated price increases should provide further benefit in H2 and that margins should improve gradually as those increases flow through. The company told analysts it plans to use dealer programmes, studio activations and contractor engagement to capture festive and wedding-season demand in Q3. Management also said Sirca would scale the acquired Wembley business through its branches and dealers, while increasing localised production to lower import dependence.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹160 cr | ₹130 cr | +23.22% |
| Other income | ₹1 cr | ₹2 cr | -26.09% |
| Expenses | ₹131 cr | ₹106 cr | +23.86% |
| Operating profit | ₹29 cr | ₹24 cr | +20.45% |
| Operating margin (%) | 18.20% | 18.62% | — |
| Interest | ₹1 cr | ₹1 cr | -3.03% |
| Depreciation | ₹3 cr | ₹3 cr | +3.72% |
| Profit before tax | ₹27 cr | ₹22 cr | +20.14% |
| Tax | ₹6 cr | ₹6 cr | +5.90% |
| Net profit | ₹20 cr | ₹16 cr | +25.35% |
| EPS (₹) | ₹3.58 | ₹2.85 | +25.61% |
Operating margin of 18.20% compares with a Consumer Discretionary sector median of 11.42% across 287 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
- Industry demand held up in Q2, supported by pricing and premiumisation.
- Price increases were accepted across the industry while demand was sustained.
Guidance & outlook
- The company expects further benefit from calibrated price increases as they flow through in H2.
- The company expects margins to improve gradually as price increases flow through.
- The company plans to capture festive and wedding-season demand in Q3 through dealer and contractor initiatives.
- The company aims to grow ahead of the industry in H2, with margins improving as pricing actions take full effect.
- Wembley Valentino's export contribution is expected to grow steadily.
Expansion
- Sirca acquired the entire Wembley business and brand from Wembley Paints & Chemicals and Indo Wembley Paints.
- The company plans to scale Wembley nationally through Sirca's branches and dealers across multiple channels.
- The company plans to ramp up localised production of acrylic and polyester systems and complete the UV transfer.
- The company plans to add depots, dealers and Sirca Studios at a measured pace in Tier-2 and Tier-3 markets.
New products
- The Wembley acquisition adds thinners, wall paints, enamels, NC, melamine and other coatings to Sirca's portfolio.
New initiatives
- The company is using consolidated sourcing and local formulations to maintain material supply during the West Asia disruption.
- The company plans to use dealer programmes, studio activations and contractor engagement to capture Q3 demand.
- Sirca Parivaar Pro will support contractor loyalty.
- The company is building a PU coatings business under Wembley Valentino in select export markets.
Competition
- The market leader reported 6–7% decorative volume growth and about 15% value growth.
Problems & risks
- EBITDA margin fell because of higher input costs.
- Brent crude rose from about $70 a barrel in early July to nearly $97 by end-September.
- The company faced disruption in West Asia affecting material supply.
- The company plans localised production and UV transfer to lower import dependence.
What to watch
- Whether operating margin moves back above 18.20% as price increases flow through.
- Whether expense growth falls below the +23.86% QoQ rate recorded in Q2FY27.
- Whether other income remains close to 4.47% of pre-tax profit.