Shalimar Paints: consolidated loss widens to ₹32.6 Cr as revenue falls 13.6% YoY

Shalimar Paints' consolidated loss widened to ₹32.55 Cr in Q2 FY27 from ₹14.14 Cr a year ago and ₹21.26 Cr last quarter, even as revenue fell 13.6% YoY to ₹115.67 Cr (₹133.81 Cr) and 16.0% QoQ (₹137.72 Cr). There were no exceptional items in either the current or year-ago quarter and tax was nil throughout, so the deterioration is entirely operational, not one-off driven. Standalone tracked closely — a ₹31.99 Cr loss on ₹114.52 Cr revenue — with the two consolidated subsidiaries adding just ₹1.29 Cr of revenue and ₹0.61 Cr of incremental loss. The margin trajectory confirms compression rather than a one-off hit: net margin (on total income) fell to -27.96% from -10.31% YoY and -15.34% QoQ, while operating margin (EBIT excluding other income, on revenue) slid to -19.86% from -4.68% YoY and -8.84% QoQ. Total expenses fell just 1.5% YoY to ₹148.99 Cr (₹151.26 Cr) and 6.8% QoQ against a 13.6%/16.0% revenue decline, so cost reduction hasn't kept pace with the volume drop. Cost of materials consumed actually rose to ₹81.34 Cr from ₹72.71 Cr YoY (+11.9%) despite lower revenue, a key driver of the squeeze, partly offset by lower employee costs (₹16.03 Cr vs ₹17.68 Cr) and other expenses (₹30.40 Cr vs ₹33.71 Cr). There is no management guidance on record and no usable analyst consensus — Shalimar Paints carries minimal institutional coverage, with tracked analysts submitting no revenue or earnings estimates, so both vsGuidance and vsStreet are unknown. Ahead of results the company closed its insider trading window (Sep 24) and had earlier held an EGM (Sep 11) for preferential issues and a QIP, a capital-raising move set against a balance sheet where current liabilities (₹403.85 Cr) run more than 2x total equity (₹199.73 Cr) and cash fell to ₹2.00 Cr from ₹7.14 Cr at FY26-end. Management's own highlights lean on mix and pricing, not volume: decorative paint's share of the business rose 5 percentage points (expected to add ~3% to margins going forward), average selling prices rose 18% YoY in decorative and 13% in industrial paints, and debtors fell 13% on better collections. None of this shows up in the reported numbers yet — operating margin nearly halved sequentially (-8.84% to -19.86%) and the loss widened both YoY and QoQ — so any ASP/mix benefit has yet to offset the revenue decline. The quarter also saw ₹73.43 Cr (Howrah) and ₹27.13 Cr (Gurugram, held by a subsidiary) of property reclassified as held-for-sale, with the Gurugram sale agreement executed during the quarter — a likely near-term liquidity lever given the cash and leverage position.