Sumitomo Chem Q2 FY27: consol PAT falls 11.5% YoY to ₹157 Cr as margins compress

Sumitomo Chemical India's consolidated Q2 FY27 print (quarter ended 30 September 2026) was soft on the primary year-on-year read: revenue of ₹907.3 Cr fell 2.4% YoY (₹929.8 Cr in Q2 FY26) and PAT attributable to owners dropped 11.5% YoY to ₹157.2 Cr (₹177.8 Cr a year ago), EPS ₹3.14 versus ₹3.56. Neither this quarter nor the year-ago quarter carried any exceptional items, so this is a clean, unadjusted comparison — profit fell faster than revenue, pointing to a margin-led softness rather than a volume shock. Standalone tracked almost identically (PAT ₹156.0 Cr on revenue ₹890.9 Cr, EPS ₹3.13), so the two bases tell the same story and consolidated is the primary figure. The squeeze sits on the operating line: OPM (EBITDA/revenue) compressed to roughly 20.5% from 23.45% in Q2 FY26 and 24.47% in the immediately preceding Q1 FY27, while NPM eased to about 17.3% from 18.35% YoY and 19.31% QoQ. Cost of materials consumed held near ₹439 Cr despite the revenue decline, i.e. input costs did not scale down with volumes. This runs counter to management's own framing from the May 2026 concall, where it said it would "pass on cost increases systematically and product-by-product" to sustain margins — this quarter's compression suggests that pass-through has not yet caught up, rather than confirming it worked. Sequentially, PAT fell 26.7% QoQ to ₹157.2 Cr from ₹214.5 Cr, but that base is flattered: Q1 FY27 included a ₹26.9 Cr one-off insurance-claim gain (Bhavnagar plant fire, FY23) that did not recur, and Q1 is also the seasonal kharif-season peak for this agro-chemicals business — the company's own filing notes flag the business as monsoon/climate-dependent, so a Q2 sequential step-down is a seasonality artifact as much as a margin story. Management gives no formally quantified FY27 revenue or margin guidance; the only prior framework on record is the May 2026 concall's cautious optimism — maintain current sales levels, defend margins via pricing, with incremental growth only from FY28 capacity additions. Revenue roughly held to that "maintain sales levels" framing (-2.4% YoY is close to flat), but the explicit margin-defense commitment was not met this quarter, so the guidance scorecard is mixed-to-missed. No Q2-FY27-specific Street consensus could be confirmed via search; the only external reference found was ICICI Direct's broader FY27 full-year estimate (from its August 2026 Q1 note) of roughly 22.5% standalone EBITDA margin for the year — this quarter's ~20.5% OPM run-rate trails that annual bar, though a single quarter doesn't confirm a full-year miss. No separate management press release was available in the context to corroborate drivers beyond the filing itself. The Glyphosate Pest Control Operator notification litigation remains pending before the Delhi High Court, unresolved as of this filing.