Sarthak Metals Q1 FY27: PAT +25% YoY to ₹1.33 Cr, but core EBITDA margin slips to 2.8%

Sarthak Metals reported standalone revenue of ₹55.21 Cr for Q1 FY27 (quarter ended June 2026), up 19.4% YoY from ₹46.22 Cr, with PAT up 25.3% YoY to ₹1.33 Cr (EPS ₹0.97 vs ₹0.77) — a straightforward YoY growth print with no exceptional items on either side to adjust for. Sequentially the numbers fell back from the seasonally stronger March-2026 quarter (revenue -10.9% QoQ, PAT -11.0% QoQ), which is a normal step-down after year-end and not a red flag on its own. The headline masks a margin story: EBITDA-level margin (PBT before exceptional items, adjusted for finance cost, depreciation and other income) compressed to about 2.8% of revenue from 3.8% YoY and 4.0% QoQ — core operating profitability actually weakened. Net profit margin still edged up (2.41% vs 2.26% YoY, 2.38% QoQ) only because Other Income more than doubled to ₹1.39 Cr from ₹0.62 Cr YoY and ₹0.65 Cr QoQ, cushioning the bottom line; ₹6.34 Lakh of that is disclosed unrealised forex gains, leaving the rest unexplained in the filing. Combined material and trading-purchase costs came in at 84.5% of revenue versus 83.5% YoY, consistent with the OPM compression, alongside the unexplained shift from materials-consumed to stock-in-trade purchases noted above. Management gave no fresh guidance or press release with this filing, so the quarter is checked against the outlook from the November-2025 concall: a target of ₹25 Cr in welding-division sales within two years, eventual EBITDA margins of 9-10% as that brand scales, and a forthcoming high-margin biotech revenue stream — none of which is verifiable this quarter because the company still reports a single segment, 'Cored Wires' (note 7), with no welding or biotech disclosure. Against that long-term 9-10% EBITDA aim, the current ~2.8% print shows the core business still far from it. No formal analyst coverage or consensus estimates for Sarthak Metals turned up in a web search, so the print cannot be benchmarked against Street numbers this quarter. The quarter's other corporate developments — the AGM notice and FY26 annual report filed July 18, a new independent director appointed July 10, and the trading-window closure ahead of results — are governance/procedural items unconnected to the P&L. The company remains close to debt-free, with only ₹5.23 Cr of current borrowings and no non-current debt.