Midwest Q1FY27: consolidated PAT +27% YoY on 35% revenue growth, NPM slips below 16% floor

Consolidated revenue came in at ₹191.8 Cr, up 34.8% YoY — ahead of the ₹155-170 Cr Street estimate range flagged in our pre-result preview — though down 11.1% QoQ from ₹215.8 Cr, a sequential dip consistent with monsoon-linked slowdowns in granite quarrying rather than any demand issue. Consolidated PAT was ₹31.0 Cr (owners'-attributable ₹29.4 Cr, +26.7% YoY, matching the figure reported in the press), up 27.3% on a total-PAT basis YoY but down 16.2% QoQ. Standalone (parent-only) PAT grew much faster at +49.7% YoY to ₹21.1 Cr on ₹98.5 Cr revenue (+25.2% YoY) — the consolidated number trails because subsidiaries, notably the still loss-making Quartz business, dilute the group print; the two are not contradictory, just different scopes, and readers will see both numbers elsewhere. Margins were the soft spot. Consolidated NPM compressed to 15.7% from 16.7% a year ago and 16.9% last quarter, slipping below the 16% floor our pre-result preview flagged as the key metric the Street was watching. OPM (EBITDA margin) eased to 25.5% from 27.4% YoY and 27.0% QoQ. The drag traces mainly to the Quartz segment, which posted a ₹4.9 Cr PBIT loss this quarter even as its revenue scaled to ₹3.7 Cr from a near-nil base a year ago as the Phase II plant ramps, plus higher consolidated finance costs (₹3.9 Cr vs ₹3.7 Cr YoY) tied to that capex. The core Granite segment stayed healthy, with a 28.3% PBIT margin on ₹184.4 Cr of segment revenue (96% of the consolidated total). On guidance, Granite segment revenue grew 35.8% YoY — well ahead of the 10-12% YoY growth management projected for the segment on the May 27, 2026 call — so the core business is tracking ahead of its own outlook even as blended margins soften. Capital deployment remains slow: only ₹70.0 Cr of the ₹229.6 Cr net IPO proceeds (30.5%) had been utilised as of June 30, 2026, with the Quartz Phase II allocation just 2.7% spent (₹3.5 Cr of ₹130.3 Cr) — a same-day regulatory filing confirmed no deviation in fund use, but the pace shows the newer growth levers (Quartz, Sri Lanka HMS, KMML rare earths) that underpin management's stated 2.5x/₹1,000 Cr three-to-four-year target remain largely unbuilt. The company also signed an MoU for critical minerals in Indonesia on July 7, 2026, extending its overseas mineral pipeline beyond the previously flagged Sri Lanka and KMML projects, with no financial contribution disclosed yet. No standalone management press release accompanied this filing beyond the routine board-outcome letter, so there is no fresh management commentary to reconcile against the print this quarter. With Granite still delivering above-guided growth but blended margins now under the 16% floor the Street was watching, the next quarter will need either a narrowing Quartz loss or a Granite margin lift to rebuild the case behind the ₹1,500 target that brokerages have tied to margin persistence.