HeidelbergCement India PAT falls 33% YoY on margin squeeze despite 11% revenue growth

HeidelbergCement India's standalone net profit for Q2 FY27 (quarter ended September 30, 2026) fell 32.7% year-on-year to ₹16.77 Cr (₹24.93 Cr in Q2 FY26), even as revenue from operations grew 10.97% YoY to ₹567.78 Cr. EPS came in at ₹0.74 versus ₹1.10 a year ago. Sequentially, PAT was down a sharper 45.1% from ₹30.55 Cr in Q1 FY27, though part of that drop reflects the seasonal monsoon-quarter slowdown typical for cement volumes rather than fresh deterioration — the YoY comparison, on a clean base with no exceptional items in either period, is the more telling signal, and underlying earnings quality weakened despite topline growth. The gap between revenue growth and profit decline sits squarely in costs. Sales volumes grew 7.3% YoY to 1,154 KT and realisations improved roughly 3.4%, per management, but per-tonne operating cost including freight rose about 6.6% YoY on higher raw material, power and fuel costs that the company's own press release attributes to the "West Asia situation." EBITDA margin compressed to 8.5% from 11.2% a year earlier (-276 bps), and EBITDA per tonne fell 22% YoY to ₹417; net profit margin similarly slipped to about 2.95% from 4.79% YoY and 4.82% in Q1 FY27. Finance costs nearly halved YoY to ₹3.14 Cr from ₹6.06 Cr, a modest offset that could not compensate for the operating-cost squeeze. Street consensus for the quarter could not be confirmed — a web search turned up only generic results-preview pages with no specific PAT or revenue estimate for this print, so vsStreet is recorded as unknown. Against management's own June 2026 concall commentary, the volume outcome tracks the guided 7-7.5% industry demand growth for Central India, but the stated confidence in "passing on cost increases" of INR100-160 per tonne was not fully borne out — cost growth outpaced price gains and EBITDA/tonne fell sharply — so guidance is assessed as missed on the margin dimension even as volumes held up. The quarter's other disclosed events were non-financial: the board approved Anu Mehta as Senior Management Personnel (HR) effective December 1, 2026, in place of the retiring Poonam Sharma, and CRISIL assigned the company an ESG score of 60. The company paid ₹157.82 Cr in dividends (₹7/share for FY25-26) during H1, leaving cash and bank balances at ₹266.2 Cr as of September 30, 2026 — a comfortable liquidity position even after the payout.