Pitti Engineering Q2 standalone: PAT -15.5% YoY on margin squeeze, revenue +21%

Pitti Engineering's standalone Q2 FY27 revenue rose 21.1% YoY (and 9.3% QoQ) to ₹578.4 Cr, extending the growth seen in Q1 FY27. But profitability moved the opposite way: PAT fell 15.5% YoY to ₹33.9 Cr (PBT down 15.9% YoY to ₹45.3 Cr), even as it rose 14.9% QoQ off a softer June quarter. Neither period carries exceptional or extraordinary items, so the YoY PAT decline is a clean, unadjusted comparison rather than a base-effect artifact. The gap between accelerating revenue and shrinking profit sits on the operating line: standalone OPM (EBITDA/revenue) came in at roughly 15.4% this quarter versus ~16.3% in both the year-ago and preceding quarters. Cost of materials consumed grew 29.7% YoY (₹390.4 Cr vs ₹300.9 Cr) against 21.1% revenue growth, and employee costs rose 24.9% YoY (₹49.7 Cr vs ₹39.8 Cr) — both outpacing the topline — while finance costs eased to ₹16.3 Cr from ₹19.4 Cr YoY. Net margin held closer to flat (~5.9% now vs ~8.0-8.4% YoY on restated figures) since tax expense (₹11.4 Cr) moved broadly in proportion to the lower PBT, so the squeeze is a materials/employee-cost story, not a financing or tax-line one. Against our pre-result preview (revenue ₹520-540 Cr, PAT ₹28-32 Cr, EBITDA margin 16.5-17.5%), the company beat on both revenue and absolute PAT but missed the margin band — ~15.4% OPM undershoots even the low end, confirming margin trajectory (one of the three watch items we flagged) as the weak spot rather than the merged-entity revenue contribution. Against management's own FY27 outlook from the August 2026 call (lamination 82,000 tons, casting 17,000 tons, EBITDA ~₹370 Cr, long-term 18-18.5% EBITDA margins), this quarter's run-rate implies the full-year target needs a materially stronger H2 — no fresh guidance update accompanies this filing, so vsGuidance stays unconfirmed pending the earnings call. No management press release was filed beyond the board-outcome letter, so there is no company commentary to cross-check against the print. This quarter's corporate developments were mostly structural: the NCLT-approved amalgamation became effective 23-September-2026, folding Pitti Industries and Dakshin Foundry into standalone results with full retrospective restatement — which is why this filing's comparatives, and ours, now match on a restated basis. A GST inspection flagged in early October was reported concluded by 14-October with no liability disclosed here. Separately, the Board declared a ₹2/share (40%) interim dividend, sanctioned ₹450 Cr capex to consolidate fragmented Karnataka lamination capacity into one integrated facility (phased to FY2030-31), and approved a second ESOP grant of 5,77,500 options at ₹736.72.