Q1FY27 Earnings: Mixed Fortunes for Indian Corporates

Kajaria Ceramics revenue up 20.4%; PSP Projects revenue up 64.7%. Shree Cement PAT down 17.5%; ITC PAT down 15.6%.

Reader Takeaway: Strong demand aids tile and construction firms, while cement and diversified conglomerates navigate cost pressures.

What just happened

The first quarter of FY27 (1QFY27) has presented a mixed earnings picture for major Indian companies. Kajaria Ceramics reported a 20.4% year-on-year (YoY) revenue growth to ₹1,328 crore and a significant 55.0% rise in profit after tax (PAT) to ₹171 crore. PSP Projects also demonstrated robust performance with revenue surging 64.7% YoY to ₹853 crore and PAT growing a remarkable 48.6 times to ₹18 crore, though impacted by labor deficits.

In contrast, Shree Cement saw its PAT decline by 17.5% YoY to ₹531 crore, with EBITDA down 4.5%, attributed to higher fuel and raw material costs. ITC's financial results were also under pressure, with revenue falling 11.1% YoY to ₹19,114 crore and PAT dropping 15.6% YoY to ₹4,509 crore, largely due to steep tax hikes impacting cigarette volumes.

Why this matters

These earnings provide a snapshot of the prevailing economic conditions. The strong performance of Kajaria Ceramics and PSP Projects highlights resilience in the housing and infrastructure sectors. However, the challenges faced by Shree Cement and ITC indicate ongoing inflationary pressures and regulatory impacts affecting profitability in the cement and consumer goods sectors, respectively.

The backstory

Kajaria Ceramics has been focusing on brand building, narrowing the price gap with unorganized players and planning capital expenditure for FY27. PSP Projects maintains a strong order book, underscoring its growth trajectory in the infrastructure space. Shree Cement's profitability has been affected by cost escalations, with management expecting improvement from the second quarter. ITC's performance is directly linked to excise duty impacts on its key cigarette business, though its FMCG-Others segment showed 12% growth.

What changes now

Investors will be closely watching how Shree Cement manages its fuel cost stabilization and whether ITC can mitigate the impact of taxation policies. The performance of companies like Kajaria Ceramics and PSP Projects suggests continued demand in their respective segments, providing a positive outlook for these sectors.

Risks to watch

For Shree Cement, the primary risk remains the volatility of fuel and raw material costs. ITC faces ongoing risks from tax policies and competitive pressures in its various business segments. PSP Projects' margin was affected by labor shortages, indicating potential operational risks.

Peer comparison

Kajaria Ceramics' revenue growth outpaced that of diversified players like ITC, while its EBITDA margin improved significantly. PSP Projects' revenue growth was exceptional, but its PAT base was smaller. Shree Cement's profitability decline contrasts with the growth seen in the building materials sector.

Context metrics (time-bound)

• Kajaria Ceramics: Revenue ₹1,328 crore (1QFY27), EBITDA ₹260 crore, PAT ₹171 crore. EBITDA margin 19.6% vs 16.9% in 1QFY26.
• PSP Projects: Revenue ₹853 crore (1QFY27), EBITDA ₹55 crore, PAT ₹18 crore. Order book ₹13,245 crore (up 103% YoY).
• Shree Cement: Revenue ₹6,233 crore (1QFY27), EBITDA ₹1,272 crore, PAT ₹531 crore.
• ITC: Revenue ₹19,114 crore (1QFY27), EBITDA ₹5,181 crore, PAT ₹4,509 crore.

What to track next

Investors should monitor management guidance on profitability, cost management strategies, and execution of new projects and order books in the upcoming quarters. The impact of policy changes on revenue streams will also be crucial.

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