RM Drip Q2 FY27: Consolidated PAT Falls 67% YoY as Margins Compress Sharply

R M Drip and Sprinklers reported consolidated revenue of ₹28.95 Cr and PAT of ₹1.87 Cr for Q2 FY27, down 7.2% and 67.4% YoY respectively, and down a sharper 28.3% and 64.8% sequentially from Q1 FY27's ₹40.39 Cr revenue and ₹5.31 Cr PAT. Standalone tells the same story — PAT of ₹2.00 Cr on revenue of ₹32.22 Cr — confirming the weakness isn't a subsidiary-only effect, with the group number running slightly below standalone due to drag from the consolidated entities. There is no sell-side coverage to benchmark against (0 analysts carry estimates per Sharpely/TipRanks) and the company has issued no formal guidance in our records or found via search, so vsStreet and vsGuidance both read unknown; no management press release accompanies this filing either, leaving the print to speak for itself. The compression is a margins story, not a demand collapse: operating margin fell to 15.8% from 22.2% in Q1 FY27 and 26.9% a year ago, while net margin dropped to 6.4% from 13.1% and 17.4% respectively — the third straight quarter of margin erosion. The driver is squarely on the cost-of-materials line: combined material and trading costs (net of inventory movement) rose to roughly 69% of revenue this quarter versus ~63% in Q1 FY27 and ~53% a year ago, pointing to raw-material cost inflation and/or a less profitable product mix rather than a one-off charge — there is no exceptional item in either the standalone or consolidated statement this quarter. Notably, commercial output from the newly consolidated Brahmanand Pipes subsidiary had been expected to lift Q2 FY27 volumes, but revenue instead fell 28.3% sequentially, suggesting that ramp-up has yet to show up in the numbers. The quarter also carries a governance overhang: the Enforcement Directorate searched the company's registered office and the promoter's residence on 16-17 October 2026 as part of a six-city PMLA probe into an alleged WhatsApp-driven pump-and-dump in RM Drip and R&B Denims shares, with roughly ₹200 Cr in trading accounts frozen industry-wide; the company has stated it has not been informed of any specific violation or order. Separately, the board revised its recommended final dividend down to ₹0.03 from ₹0.05 via a corrigendum issued in September, ahead of the 22nd AGM — a modest but visible pullback in capital return timed just before this weak print and the ED search. Into Q3 FY27, the read-through is a margin trajectory that still needs to find a floor, alongside two unresolved external risks (the PMLA probe and the diluted share base) layered on top of a genuine, cost-driven earnings slowdown.