Knack Packaging reported a robust 52.5% YoY revenue jump to Rs 294.76 crore for Q2 FY27. Despite a 21.2% growth in net profit, EBITDA margins contracted to 16.35% due to rising raw material costs. Management expects margin recovery by Q3 through pricing adjustments and has secured a major Rs 150 crore annual international contract.
Knack Packaging Q2 Profit Up 21% Amid Revenue Surge
Q2 FY27 Revenue: Rs 294.76 crore (+52.5% YoY). Q2 FY27 Net Profit: Rs 25.02 crore (+21.2% YoY).
Reader Takeaway: Revenue momentum remains strong, though margin pressure from input costs requires monitoring in coming quarters.
What just happened
Knack Packaging posted significant growth in its top line for the second quarter of FY27, reaching Rs 294.76 crore. Production volume grew by 13-14% year-on-year, reaching 11,252 metric tons with plant utilization hovering at 90-91%. The company also announced a new three-year international contract renewal valued at Rs 150 crore annually.
Why this matters
While revenue scaled, EBITDA margins dipped to 16.35% from 19.25% a year ago. Management cited a sharp spike in raw material prices, specifically polypropylene, which rose over 50% in weeks. Because price pass-through mechanisms in contracts have a 1-2 quarter lag, the company sold products at older prices while absorbing higher input costs.
The Mexico JV update
The company’s joint venture in Mexico, Sayem Knack, is currently in a scale-up phase. It reported a net loss of Rs 2.62 crore for the quarter, contributing to a total H1 loss of Rs 6.06 crore. Achieving breakeven for this facility remains a key priority for management.
Risks to watch
Investors should monitor the efficacy of the planned margin recovery in Q3 and Q4. Since performance is tied to the successful implementation of revised pricing, any sustained volatility in crude oil and polymer prices could pose a risk. Additionally, the ongoing losses from the Mexico JV continue to weigh on the consolidated bottom line.
What to track next
Shareholders should track the shift in EBITDA margins beginning in Q3 FY27. Furthermore, progress toward the 72,000 MT annual production capacity target set for October 2027 will be a critical indicator of long-term scaling success.