TANFAC Q2 FY27: 37% revenue growth outpaces 11% PAT growth as margins compress

TANFAC Industries posted standalone Q2 FY27 revenue from operations of ₹230.48 Cr, up 36.6% YoY and 23.1% QoQ, its strongest topline print in recent quarters. But profit after tax of ₹19.03 Cr grew only 10.8% YoY (+12.9% QoQ) — a sharp divergence from the revenue trend, with no exceptional items on either side to explain the gap. We have no analyst/street estimates on record for this quarter and could not locate brokerage previews for TANFAC's Q2 FY27 print, so vsStreet is unknown.

The gap is a margin story. Operating margin (OPM) fell to 11.84% from 15.93% a year ago and 15.27% last quarter, as raw material costs rose 49.4% YoY (faster than the 36.6% revenue growth) and power & fuel costs jumped 62.9% YoY — both outrunning the topline. Net profit margin slipped to 8.12% from 10.15% YoY. Finance costs more than doubled, up 115.6% YoY to ₹1.68 Cr, as the company drew fresh long-term borrowings (₹66.11 Cr non-current debt on the books versus nil a year ago) to fund its capex programme; depreciation rose 24.8% YoY on the same build-out. This measures well short of management's own FY27 guidance of 21-22% blended EBITDA margin (given at the August 2026 concall) — Q2 OPM of 11.84% and H1 OPM of ~13.4% are roughly 800-1000 bps below that target, with H1 revenue growth of ~21% YoY also trailing the guided 30% full-year pace. Management tied the margin ramp to the HFC-32 plant, which is only guided to commission end-November 2026, so the shortfall through H1 is consistent with — not necessarily a reversal of — that plan, but it is a clear gap against the number management put out.

The stock went into the print at ₹3,429.1, up 6% over the past month of trading.

For context: this is the second-highest quarterly PAT of the last 6 quarters.

The quarter's corporate activity was capital-raising, not operating: TANFAC completed a ~₹247 Cr QIP (12,58,918 shares at ₹1,965.83, allotted June 2026) and a ~₹99.4 Cr preferential allotment (4,24,847 shares at ₹2,341, allotted September 2026, listed October 8-9, 2026), together funding part of the ₹1,500-1,700 Cr multi-year capex plan behind the new 20,000 MTPA fluorinated product plant. Capital work-in-progress jumped to ₹153.0 Cr from ₹28.5 Cr at FY26-end, and ₹68.08 Cr plus ₹75.55 Lakh of raise proceeds were still sitting in escrow/fixed deposits as of September 30, 2026, pending utilisation per the filing's notes. EPS of ₹8.93 rose only 3.7% YoY despite 10.8% PAT growth, diluted by the roughly 8.4% increase in share count from the two raises. No management press release accompanying this result was available in our records, so the company's own framing of the quarter could not be cross-checked here.