Medico Remedies Q1FY27: revenue +81% YoY, PAT +38% as margins compress sharply

Medico Remedies posted standalone revenue from operations of ₹69.40 Cr in Q1FY27 (quarter ended 30 June 2026), up 81.4% YoY from ₹38.25 Cr and up 22.2% QoQ from ₹56.81 Cr. Net profit rose 38.5% YoY to ₹2.52 Cr (from ₹1.82 Cr) but fell 57.0% QoQ from ₹5.86 Cr — the topline surge did not flow through proportionately to the bottom line, with profit growth trailing revenue growth by more than 40 percentage points YoY. Basic EPS was ₹0.30 versus ₹0.22 a year ago and ₹0.71 in the preceding quarter. The gap is a margin story. Net profit margin (PAT/total income) compressed to 3.57% from 4.67% YoY and 9.81% QoQ; operating margin (EBITDA/revenue) fell to 4.76% from 7.39% YoY and 12.59% QoQ. The main driver sits in the cost base: the company recognised a ₹7.36 Cr charge from changes in inventories of finished/WIP goods this quarter (inventory drawdown) versus a ₹2.00 Cr credit (inventory build) in Q1FY26 — a roughly ₹9.35 Cr swing on a ~₹67 Cr expense base, and the single largest driver of the squeeze. Raw material cost rose 64.4% YoY to ₹47.20 Cr, a slower pace than the 81.4% revenue growth, which cushioned but did not offset the inventory-line drag. There are no exceptional items or minority interest in the statement, so raw and adjusted YoY PAT growth are identical at 38.5%. Medico gives no formal guidance, and our records show no prior concall commentary to benchmark against, so vsGuidance is unknown; a web search turned up no analyst previews or consensus estimates for this micro-cap (searches returned coverage for the similarly named Indoco Remedies instead), so street comparison is also unknown. The filing carries no separate management press release or MD&A commentary beyond the standard board notes. Notably, the quarter's geographic mix shifted sharply: domestic sales jumped to ₹26.34 Cr (38% of the segment total) from just ₹2.74 Cr in Q4FY26, while exports fell 20.4% QoQ to ₹42.70 Cr from ₹53.64 Cr — a reversal of the export-heavy mix seen last quarter, with no management explanation given in the notes. Concurrent board actions from the same meeting included re-appointing Rishit Mehta and Haresh Mehta as whole-time directors (effective 18 September 2026) and raising MD Harshit Mehta's remuneration; a minor ₹1.13 lakh NSE/BSE fine for a listing-rule violation was disclosed earlier in the quarter (3 June 2026) but is immaterial to the P&L. The $1.4M (~₹11.7 Cr) government supply order announced 5 August 2026 falls into Q2FY27 and, combined with the domestic-sales surge already visible this quarter, is the marker to watch for whether the mix shift toward domestic sales continues. Whether the inventory-drawdown-driven margin compression reverses — OPM returning toward the 7-12% band seen in the trailing two quarters — is the other open question heading into next quarter.