Balkrishna Industries Q2 FY27 Results Analysis: Revenue Surges 46%, Margin Compresses 302 bps (BALKRISIND)

Quarter Snapshot

Revenue grew 46.13% YoY to Rs.3,490.53 Cr but EBITDA margin compressed 302 bps QoQ to 17.97%, exceeding the ~2% RM impact management guided, and PAT fell 32.62% QoQ. Growth is being financed rather than self-funded: H1 operating cash flow was negative Rs.1.08 Cr, free cash flow was Rs.−1,952.89 Cr, and gross debt rose Rs.1,936.61 Cr. Capex remains on track at Rs.1,951.81 Cr against the Rs.3,000 Cr FY27 guide, with margin recovery toward the 23-25% target dependent on raw-material relief and price-hike flow-through.

Q2 FY27 Expectations vs Results

Driver	Expected before results	What happened	Verdict
Revenue	"likely ahead on the domestic replacement base, with a mixed agri tail"	+46.13% YoY, +1.33% QoQ	Played out
Margin	"margins likely compress on raw materials… the guided ~2% RM impact and price-hike flow-through determining how far Q2 lands above/below Q1's 20.61%"	17.97% vs 20.99% QoQ (−302 bps); −289 bps YoY — compression exceeded the ~2% guide	Played out
Finance costs	"finance costs are the quiet line to check" (Rs.550 Cr NCDs at 7.35–7.40%)	Rs.66.78 Cr, +84.58% QoQ / +109.15% YoY	Played out
Capex run-rate	Watch H1 run-rate vs Rs.3,000 Cr guide	Rs.1,951.81 Cr H1 — on track	Played out
Net debt	Rising trajectory vs Rs.1,725 Cr at Jun-26	+Rs.1,946.35 Cr in H1 on the locked basis (company basis not comparable — flagged in §4) — direction	Played out
OHT volume vs 93,770 MT record	"volume direction rests on whether OHT offtake holds above Q1's record"	Not disclosed in filing	Not observable
Forex drag pattern	"a similar embedded drag is the pattern to test"	Realized-forex quantum not disclosed; other income −55.83% QoQ	Not observable
EUDR / US tariff de-escalation	Imminent EUDR; 10% tariff regime	Silent in filing	Not observable

Read our full results preview.

Management Guidance vs Delivery

What management said	Where	What happened	Verdict
~2% margin impact in Q2 FY27 from ~5% RM increase	Q1 FY27 earnings call	−302 bps EBITDA margin QoQ (20.99% → 17.97%) — compression exceeded the guided impact	Missed
Blended EBITDA margin 23–25% post full commercialization (open-ended)	Q4 FY26 / Q1 FY27 calls	17.97% (Q2); 19.47% H1	Too Early
FY27 capex Rs.3,000 Cr (superseding Rs.1,500–1,800 Cr)	Q1 FY27 call; capex-on-schedule confirmation in filing Note 3	H1 PP&E purchases Rs.1,951.81 Cr (~65% of guide)	On Track
Total capex Rs.6,800 Cr till FY29	Q1 FY27 call	Rs.1,951.81 Cr spent in H1 FY27	Too Early
Revenue 2.2× / Rs.23,000 Cr by 2030	Q2 FY26 / Q1 FY27 calls	H1 consol revenue Rs.6,927.01 Cr, +34.41% YoY	Too Early
OHT 8% share by FY30; CB ~10% of revenue by FY30; On-Highway Rs.5,000 Cr by 2030; PCR pilot Q3FY27 / TBR ramp H2 FY27 / Tracks H2-2026	Q2 FY26–Q1 FY27 calls	No volume, mix, or project updates in this filing	Too Early / Cannot assess
"We expect better flow-through from EBITDA to PAT as we steadily scale up"	Q1 FY27 call	Contradicted this quarter: EBITDA −13.25% QoQ but PAT −32.62% QoQ; other income −55.83% QoQ and finance costs +84.58% QoQ amplified the downside — this quarter	Contradicted
"Capital expenditures previously announced… completed as per schedule within the approved budget"	Filing Note 3	H1 capex Rs.1,951.81 Cr; CWIP +Rs.1,268.05 Cr; no contrary disclosure — as far as the filing shows	Confirmed
Price hikes to partially offset RM impact	Q4 FY26 / Q1 FY27 calls	Realization not disclosed; margin still compressed 302 bps QoQ	Too Early

Key Numbers, Quarter by Quarter

Metric	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27	Q2 FY27
OHT volume (MT)	70,252	80,620	85,820	93,770	not disclosed in filing
YoY %	−4	+6	+5	+16 (record)	—

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Did Balkrishna Industries Ltd's margins hold up this quarter?→What did Balkrishna Industries Ltd's management say about the outlook?→How did each segment do against last quarter?→