Krystal Q2 FY27: Revenue +46% YoY, PAT +42% to ₹18.7 Cr, but margins compress

Krystal Integrated Services' consolidated revenue for Q2 FY27 (quarter ended September 30, 2026) came in at ₹414.5 Cr, up 46.3% year-on-year from ₹283.4 Cr and up 14.9% sequentially from ₹360.7 Cr. Consolidated PAT rose 42.1% YoY to ₹18.71 Cr from ₹13.17 Cr, and 7.5% QoQ from ₹17.41 Cr. No consensus estimate specific to this quarter could be sourced (vsStreet: unknown) — search turned up no brokerage preview with a numeric Q2 FY27 PAT/revenue estimate, only coverage of the already-reported Q1 FY27 print. Against management's own May 2026 guidance of "upwards of 20% consolidated revenue growth in FY27, accompanied by margin appreciation," the revenue leg was comfortably beaten (46% YoY versus the >20% bar), but the margin leg was not delivered this quarter — both operating and net margin compressed instead of expanding. The margin compression sits on the employee cost line: employee benefits expense rose 53.4% YoY to ₹314.4 Cr, outpacing the 46.3% revenue growth, which pulled operating margin (EBITDA excluding other income, over revenue from operations) down to 6.00% from 6.32% a year ago and 6.32% last quarter, and net margin to 4.52% from 4.57% YoY and 4.76% QoQ. A meaningful part of both the revenue surge and the added cost base is the first full quarter of Citelum India, the smart-lighting subsidiary Krystal took full ownership of from EDF Group with effect from June 29, 2026 — in the base for barely a day in Q1 FY27 but a complete quarter here. Within the segment mix, core Manpower & Related Services grew a healthy 52.9% YoY to ₹375.0 Cr, catering grew 15.1% YoY to ₹38.8 Cr, while the small IT-enabled services segment fell 83.4% YoY to ₹0.75 Cr. No management press release accompanied this filing beyond the standard SEBI Regulation 30 board-outcome letter, so there is no direct management commentary to reconcile against the print this quarter. The quarter's other disclosed developments were order wins and a hiring push rather than one-off items: a ₹26 Cr railway contract (October 9, 2026), an ₹8.75 Cr manpower order (September 29, 2026), and a ₹6.58 Cr metro facility-management contract (September 12, 2026), alongside a plan announced October 10, 2026 to hire over 10,000 staff within six months — consistent with the employee-cost growth already visible in this result. Standalone and consolidated results are close (PAT ₹18.66 Cr standalone versus ₹18.71 Cr consolidated, under 1% apart), so there is no meaningful read-through gap between the two bases. There were no exceptional items in either the current or year-ago quarter, so the YoY PAT growth is on a like-for-like exceptional-items basis; the only caveat to organic comparability is the Citelum consolidation noted above. Going into Q3 FY27, two threads follow directly from this print: whether operating margin recovers toward the ~6.3% level implied by management's "margin appreciation" guidance as Citelum integration and hiring costs normalize, and whether the >20% FY27 revenue growth guidance holds once Citelum sits in the YoY base for a full prior-year quarter rather than inflating the comparison the way it did this quarter.