Procter & Gamble Hygiene and Health Care Ltd (PGHH) Q2 FY27 Results Analysis: EBITDA Margin Compresses 203 bps, PAT Falls 6.68%
Procter & Gamble Hygiene and Health Care Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 1,145.08 Cr (-0.44% YoY) and PAT growth of -6.68% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 12, 2026 |
|---|---|
| Revenue (Q2) | Rs. 1,145.08 Cr (-0.44% YoY) |
| PAT (Q2) | Rs. 195.84 Cr (-6.68% YoY) |
| EBITDA margin | 22.72% (-203 bps YoY) |
| EPS (Q2) | Rs. 60.33 (-6.68% YoY) |
Quarter Snapshot
Q2FY27 revenue was flat YoY at Rs.1,145.08 Cr while PAT fell 6.68% YoY, driven by a 28.85% YoY rise in gross material cost that compressed EBITDA margin 203 bps to 22.72%. Sequentially the quarter recovered sharply (EBITDA margin +364 bps QoQ, PAT +55.10% QoQ), and the balance sheet remains a fortress with Rs.715.80 Cr cash, zero borrowings, and H1 FCF of Rs.338.47 Cr. H1 PAT is down 19.86% YoY and the 40.38% inventory build since March is the key watch item as the company absorbs the input-cost shock.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue | "directionally soft-to-flat YoY, with price/mix doing more work than volume" | −0.44% YoY (Rs.1,145.08 Cr) | Played out |
| Margins | "Compressing is the grounded read… the Q2 cost line likely stayed elevated" | EBITDA margin 22.72%: −203 bps YoY but +364 bps QoQ; gross material cost +28.85% YoY — YoY compression as expected, but the sequential squeeze did not deepen | Partially |
| A&P step-up continues | "whether the +21.23% YoY step-up continues" | A&P −5.31% YoY (Rs.166.62 Cr) | Contradicted |
| Watch: Q2 commodity quantification / pricing actions | "what was priced through" | Not disclosed in the filing — open for the call | Not observable |
| Watch: margin bridge vs "Improve Margins" | "whether structural margins +1pt claim is maintained" | Margin −203 bps YoY visible in filing; management explanation pending | Partially addressed |
| Watch: Vicks seasonal conversion / Whisper momentum | "whether the strong monsoon cough/cold curve shows up" | No volume/KPI disclosure — open for the call | Not observable |
| Watch: A&P funded alongside dividend from H1 CFO | "how it is funded from H1 CFO alongside the dividend outflow" | CFO Rs.373.87 Cr vs Rs.194.76 Cr dividend paid; FCF Rs.338.47 Cr | Played out |
| GST | "No rate change hit the quarter" | Filing silent — nothing to score | Consistent |
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Management Guidance vs Delivery
| What management said | What happened | Verdict |
|---|---|---|
| "Improve Margins" (long-term algorithm, Q4 FY26 concall) | EBITDA margin 22.72%, −203 bps YoY; H1 21.12% vs 26.38% | Contradicted on the trailing two quarters |
| "We anticipate some challenges to continue" (near-term outlook, Q4 FY26 concall) | Delivered: flat revenue, −6.68% PAT YoY | Confirmed |
| "Invest strategically behind brands" (MD commentary, Q1 FY27 filing) | A&P Rs.166.62 Cr, −5.31% YoY; 14.55% of revenue vs 15.30% yr-ago — after Q1's +21.2% step-up | Contradicted for Q2 |
| Commodity cost volatility impacting results (management attribution for Q1) | Gross material cost +28.85% YoY on −0.44% revenue; margin −203 bps YoY | Confirmed as the visible driver |
Key Numbers, Quarter by Quarter
| Metric | Q2 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|
| A&P spend (Rs. Cr) | 175.97 | 83.32 | 166.62 |
| A&P YoY | — | +21.23% | −5.31% |
| A&P % of revenue | 15.30% | 9.35% | 14.55% |
| EBITDA margin | 24.75% | 19.08% | 22.72% |
| PAT margin | 18.25% | 14.16% | 17.10% |
Key Investment Insights
Key Positives
- EBITDA margin recovered 364 bps QoQ to 22.72% from Q1FY27's 19.08%
- PAT grew 55.10% QoQ to Rs.195.84 Cr off a weak Q1
- H1 operating cash flow of Rs.373.87 Cr covered PAT 1.16x; free cash flow was Rs.338.47 Cr
- Cash and equivalents rose 28.5% since March to Rs.715.80 Cr with zero borrowings; net worth up 17.34% in six months
- Other expenses fell 1.15% YoY and A&P spend fell 5.31% YoY to Rs.166.62 Cr
- Effective tax rate steady at 25.26% vs 25.52% a year ago
- Payables growth of 18.5% absorbed much of the inventory build, preserving the negative-working-capital posture
Risk Factors
- Gross material cost rose 28.85% YoY against a 0.44% revenue decline, compressing EBITDA margin 203 bps YoY
- PAT fell 6.68% YoY and H1 PAT fell 19.86% YoY; H1 EBITDA margin is 526 bps below H1FY26
- Inventories rose 40.38% since March to Rs.305.92 Cr, driving H1 CFO down 27.9% YoY
- Other income rose 71.82% YoY including Rs.7.61 Cr of one-time provisions written back, cushioning reported PAT
- A&P spend fell 5.31% YoY, contradicting the stated intent to invest strategically behind brands
- EBITDA margin of 22.72% is 457 bps below management's own FY26 operating margin reference of 27%
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