Diffusion Engineers Q2 FY27: consol revenue up 51% YoY, PAT up 26% as margins compress
PAT +25.5% YoY · revenue +50.7% · margins compressing
₹125.93 Cr
+50.7% YoY
₹12.75 Cr
+25.5% YoY
9.98%
-1.8pp YoY
₹3.39
Diffusion Engineers' consolidated revenue rose 50.7% YoY to ₹125.93 Cr (₹125.93 Cr vs ₹83.57 Cr in Q2 FY26) and 14.4% QoQ, its highest-ever quarterly print, but consolidated PAT grew only 25.5% YoY to ₹12.75 Cr (EPS ₹3.39 vs ₹2.69) — profit growth trailing revenue growth by a wide margin. OPM compressed to 13.21% from 14.80% a year ago, and NPM fell to 9.98% from 11.74%, so the growth came with margin give-up rather than operating leverage. Sequentially, PAT fell 23.5% QoQ even as revenue grew — the swing is almost entirely the share of profit/(loss) from associates and joint ventures, which flipped from +₹4.46 Cr in Q1 FY27 to -₹0.60 Cr this quarter; core consolidated PBT before that associates line was ₹15.82 Cr, up just 0.9% QoQ from ₹15.68 Cr, so the underlying operating trend is flattish sequentially despite the revenue jump. Standalone PAT of ₹15.24 Cr grew a faster 53.7% YoY than the consolidated 25.5%, a >3% divergence driven by the associates/JV drag and minority interests sitting below the standalone line — readers comparing the two should not read the standalone number as the headline.
Q2 FY-2027 vs prior quarters
No brokerage or analyst consensus estimates were found for this quarter (the stock currently carries no visible analyst coverage), so vs-street is unknown rather than a miss or beat. Against management's own Q1 FY27 guidance of ~20% annual revenue growth and 100-200 bps EBITDA margin expansion off the stated 12.85% base, the quarter's 50.7% YoY revenue growth runs well ahead of the growth target, while margin progress is only nascent — OPM is up 36 bps QoQ from that 12.85% base but still down YoY, so the expansion guidance is on track but not yet demonstrated on a year-on-year basis. No management press release accompanied this filing. Among the quarter's disclosed developments, the company won a GST appeal with a ₹72.14 lakh demand set aside (Nov 3, 2026), a minor but concrete balance-sheet positive; capital work-in-progress rose to ₹39.54 Cr (consolidated) from ₹22.97 Cr at FY26-end, consistent with the ₹100 Cr capex program underway to take HE capacity from 9,000 to 18,000 MT.
The stock went into the print at ₹418, down 7.4% over the past month of trading.
FY27–28 revenue growth of ~20% annually, EBITDA margin expansion of 100–200 bps (vs current 12.85%), and three-year revenue doubling. ₹100 Cr capex underway (9000→18000 MT HE capacity), 2–3 year ramp timeline. International, railway, defense segments nascent.
— This quarter: met
W1
Whether OPM sustains above the 12.85% Q1 FY27 base and closes toward the guided 100-200 bps expansion band (13.85%-14.85%) in H2 FY27
W2
Associates/JV profit contribution stabilizing — it swung from +₹4.46 Cr (Q1 FY27) to -₹0.60 Cr (Q2 FY27)
W3
Execution pace of the ₹100 Cr HE capacity expansion (9,000→18,000 MT, 2-3 year ramp) as CWIP continues to build
Clean typed statements, both standalone and consolidated legible; limited-review (unaudited) only. Consolidated PBT includes -₹0.60 Cr share of loss from associates/JV (Mecdiff, LSN Diffusion) — operating PBT before that share was ₹15.82 Cr, up only ~0.9% QoQ. No exceptional item in either Q2 FY27 or the year-ago Q2 FY26 column (the ₹0.70 Cr exceptional item sits only in the FY26 full-year column), so no adjustment needed to YoY PAT growth.