Knack Packaging reported a robust 52.5% YoY revenue surge to Rs 2,947.57 million for Q2 FY2027. Despite the record top-line, consolidated net profit grew by a modest 21.2% to Rs 250.20 million, as EBITDA margins dipped to 16.35% due to rising input costs and freight disruptions. The company’s Mexico joint venture also weighed on profitability during its scale-up phase. Management is currently working on customer price revisions to protect margins in upcoming quarters.
Knack Packaging Q2 FY2027 Financial Performance
Revenue of Rs. 2,947.57 million; Net Profit of Rs. 250.20 million.
Reader Takeaway: Strong top-line growth is offset by margin pressure from input costs and a drag from its Mexico JV.
What just happened
Knack Packaging posted its highest-ever quarterly revenue of Rs. 2,947.57 million for Q2 FY2027, marking a 52.52% increase over the same period last year. While top-line growth was aggressive, net profit growth remained tempered at 21.24%, reaching Rs. 250.20 million. The company’s EBITDA margin contracted to 16.35% compared to 19.2% in the previous year, reflecting the impact of broader economic headwinds.
Why this matters
The results highlight the company's ability to drive demand for its packaging solutions, even as external cost factors compress profitability. Shareholders are closely watching how the company manages cost pass-throughs, as management confirmed that customer price revisions are in progress to combat inflation in crude oil-based polymers and increased shipping costs caused by Red Sea logistics issues.
The Mexico JV Factor
Profitability faced an additional hurdle from the Sayem Knack S.A. de C.V. joint venture in Mexico, which reported a loss of Rs. 60.60 million during the first half of FY2027. Management has categorized this as a 'peak scale-up' investment phase and expects the venture to reach profitability once it moves past this initial setup cycle.
IPO Proceeds Utilization
The company remains transparent regarding its IPO funds, reporting no deviations from the objects stated in its prospectus. As of September 30, 2026, the firm has Rs. 3,192.96 million remaining for capital expenditure at its Borisana facility, indicating significant ongoing expansion projects that investors should track in the coming quarters.
Risks to watch
Key risks include persistent volatility in global polymer prices and potential delays in the breakeven timeline for the Mexico joint venture. Investors should also monitor if Q3 price hikes effectively restore EBITDA margins to previous levels.