Tanfac Q1: revenue up 6% YoY but PAT slips 13% as power costs, higher tax bite margins

Tanfac Industries posted standalone Q1 FY27 (quarter ended June 2026) revenue of ₹187.18 Cr, up 6.3% YoY from ₹176.00 Cr but down 3.1% sequentially from ₹193.08 Cr — a mild topline expansion that failed to reach the bottom line. Net profit fell to ₹16.85 Cr, down 12.9% YoY (₹19.35 Cr) and 6.6% QoQ (₹18.04 Cr), with EPS at ₹8.43 (restated post the 1:2 split) against ₹9.70 a year ago. The headline profit decline overstates the operating slippage: at the PBT level the fall was only 3.6% YoY (₹23.75 Cr vs ₹24.65 Cr). The gap is a tax effect — the year-ago quarter carried a ₹0.90 Cr prior-year tax write-back that lifted its PAT, and this quarter's effective tax rate normalised to 29.1% (vs ~21.5%). Adjusting the year-ago base for that one-off, underlying PAT is down ~8.7%, so the print is a genuine but moderate profit decline, not a sharp collapse.

Margins did the damage on the cost side. Net profit margin compressed to ~9.0% from 10.9% YoY, and operating margin eased to ~15.3% (from 16.5% YoY / 15.7% QoQ). The squeeze sits mainly on power and fuel, which jumped ~30% YoY to ₹16.65 Cr (from ₹12.81 Cr), alongside raw-material cost up 13% on revenue up only 6% and depreciation up 21% to ₹4.70 Cr as recent capacity came on stream. Lower finance cost (₹0.97 Cr vs ₹1.39 Cr) provided a partial offset. The ~15.3% operating margin lands at the bottom of management's prior 15-18% EBITDA guidance from the Q4 concall — technically within range, but the low end, and the confident, cautiously-optimistic tone struck on that call is only partially borne out by a quarter where volume/price gains were eaten by input inflation.

The stock went into the print at ₹2,720, up 11.5% over the past month of trading.

The result lands amid heavy corporate action rather than operating catalysts: the quarter saw a completed ₹250 Cr QIP (12,58,918 shares at ₹1,985.83) plus a preferential issue, expanding paid-up equity to ₹10.60 Cr and diluting the per-share base — the QIP proceeds sat in escrow/FDs at quarter-end, pending deployment. This funds the ₹495 Cr HFC-32 and downstream fluorochemicals capex (a separate 20,000 MTPA fluorinated-products line at ₹49,500 Lakh is also under implementation), with commissioning guided for Q3 FY27 and underpinning management's five-year ₹3,000-3,500 Cr revenue ambition. No brokerage consensus exists for this small-cap, so there is no street benchmark to beat or miss; the earnings call is set for July 27. Net: a soft quarter where the growth engine is still capex-in-progress and current margins are being tested by power costs.