DCW Q1 FY27: ₹34 Cr Tax Gain Lifts PAT 203% YoY, but Core Profit Nearly Wiped Out
PAT +203.32% YoY · revenue +13.97% · margins compressing
₹541.91 Cr
+13.97% YoY
₹34.55 Cr
+203.32% YoY
6.31%
+3.9pp YoY
₹1.17
DCW's standalone Q1 FY27 (quarter ended June 30, 2026) revenue rose 13.97% YoY to ₹541.91 Cr, though it fell 11.03% QoQ from Q4 FY26's ₹609.06 Cr. Reported net profit jumped 203% YoY and 91% QoQ to ₹34.55 Cr (EPS ₹1.17), but that headline is almost entirely an accounting one-off: a ₹34.28 Cr deferred-tax re-measurement gain (Note 5) booked after the company opted into the new concessional tax regime under the Income Tax Act 2025, effective April 1, 2026. Strip that out and adjusted PAT was just ₹0.27 Cr — down roughly 98% from ₹11.39 Cr a year ago — against a pre-tax operating profit of only ₹0.36 Cr, essentially breakeven.
Q1 FY-2027 vs prior quarters
The real story is margin compression, not the tax-boosted headline. Operating profit margin fell to 6.60% from 11.30% a year ago and 10.60% last quarter, as cost of materials consumed rose 28.9% YoY to ₹335.39 Cr, outpacing the 13.97% revenue growth. By segment, Basic Chemicals swung to a ₹27.68 Cr loss (from a ₹16.45 Cr profit in Q4 FY26 and a smaller ₹2.65 Cr loss a year ago), while Specialty Chemicals (CPVC) held up, with segment profit rising to ₹40.54 Cr on 37.7% YoY revenue growth — consistent with management's prior guidance that growth would come from the ramped-up C-PVC capacity. Basic Chemicals' deterioration is the swing factor behind the margin miss.
The stock went into the print at ₹46.22, down 1.4% over the past month of trading.
For context: this is the highest quarterly PAT in the last 6 quarters on our records; PAT has now risen for 2 consecutive quarters.
Management is not providing quantitative EBITDA guidance for FY27, citing pricing pressures that have derailed previous targets, but expects to become a net cash positive company by year-end through scheduled debt repayments. Growth will be driven by the full-year contribution from recently expanded C-PVC capacity. Mar
— This quarter: missed
Management's Q4 FY26 concall gave no quantitative EBITDA guidance for FY27 (citing pricing pressures) but did flag expected margin improvement from normalizing C-PVC spreads and better realizations — this quarter's OPM compression instead of improvement runs counter to that expectation, so it reads as a miss on the margin call specifically, even as the C-PVC volume/growth thesis is playing out. No formal management press release was available to cross-check tone. We found no specific analyst consensus for this print (DCW is a small, thinly-covered ₹1,497 Cr mcap name trading near 31x trailing earnings ahead of results per Univest); street focus going in was realisation stabilisation and capacity utilisation, both of which the Basic Chemicals loss suggests remain unresolved.
W1
Q2 FY27 hit from the Dhrangadhra plant flood suspension that began August 3, 2026 (post quarter-end) — magnitude and duration to verify.
W2
Whether the Basic Chemicals segment's swing to a ₹27.68 Cr loss this quarter narrows, given management's prior expectation of margin normalization.
W3
New CEO Sudarshan Ganapathy's early execution on the margin-recovery thesis management laid out last quarter, which this print did not deliver on.