HBL Engineering's consolidated net profit declined 24% year-on-year to ₹110.08 crore in Q1 FY27, compared to ₹143.27 crore in the corresponding quarter of the previous year. According to reports from Business Standard, this represents a significant decline in profitability despite the company maintaining revenue growth during the quarter. The company's profit before exceptional items and tax stood at ₹149.46 crore in Q1 FY27, compared with ₹193.62 crore in Q1 FY26, while the company reported an exceptional loss of ₹0.01 crore during the quarter. The EBITDA also declined 23.5% year-on-year to ₹147 crore from ₹192 crore, with the EBITDA margin compressing to 23% compared with 31.9% in the year-ago period.
The company's sales revenue increased 6% to ₹638.03 crore in Q1 FY27, up from ₹602 crore in the same quarter of the previous financial year. As reported by Business Standard, this revenue growth indicates the company's ability to maintain business momentum despite the profit decline, suggesting potential margin pressures during the quarter. The company's revenue from operations increased 6% to ₹638.03 crore from ₹602 crore in the year-ago period, showing consistent top-line growth despite operational challenges. The electronics segment revenue jumped 26% YoY to ₹227.31 crore, while the industrial batteries segment rose 7.3% YoY to ₹361.94 crore, indicating strong performance in key business segments.
The company's total expenses increased 19% YoY to ₹509.13 crore during the quarter compared with ₹427.79 crore in the corresponding quarter last year. According to Business Standard, cost of materials consumed stood at ₹359.63 crore (up 7.6% YoY), while employee benefits expense rose 24.8% YoY to ₹67.42 crore. The finance cost declined 14.8% YoY to ₹5.41 crore, providing some relief on the cost front. This expense growth significantly outpaced revenue growth, contributing to the overall margin compression and profit decline during the quarter.
The company's defence and aviation batteries segment declined 48.5% YoY to ₹37.93 crore during the quarter, representing a significant challenge in this segment. However, the electronics segment revenue jumped 26% YoY to ₹227.31 crore, while the industrial batteries segment rose 7.3% YoY to ₹361.94 crore, indicating strong performance in core business areas. HBL Engineering (formerly known as HBL Power Systems) manufactures different types of batteries, including lead acid, NiCad, silver zinc, lithium, and railway & defence electronics and other products.
HBL Engineering shares fell 3.41% to ₹701.95 after the company reported the mixed quarterly results. According to Business Standard, the stock decline reflects investor concerns over the profitability decline despite revenue growth, with the operating profit margin (OPM) compressing to 23% from 31.9% in the previous year. The company clarified that none of its promoters has any interest in the entity awarding the order and that the transaction does not fall under the related-party transaction category.
