The Big Picture
Q2 FY27 has been a tale of two quarters. Some companies, like Tata Steel and Finolex Cables, turned volume growth into solid profit gains. Others, such as Coromandel International and Cohance Lifesciences, saw costs and lumpy deliveries squeeze margins despite decent top-line numbers. Meanwhile, corporate India isn't just counting pennies—it's placing strategic bets. From Mahindra & Mahindra backing its commercial vehicle subsidiary to Marico buying into a digital-first FMCG play, the capital allocation story is just as important as the earnings one.
Tata Steel proved that when volumes move, profits often follow. Consolidated net profit rose 16.2% year-on-year to ₹3,699.59 crore, even as revenue climbed 11.5% to ₹65,436 crore. The EBITDA margin came in around 16%, slightly below some estimates, but here's the thing: absolute EBITDA grew 17% to ₹10,665 crore. That growth outpaced revenue, which is why profit rose faster than sales. The driver? India. The domestic business delivered an EBITDA margin of 25%, with crude steel production up 7% and deliveries up 16% sequentially. Europe remained a mixed bag, but the strength in India more than compensated.
Finolex Cables took a similar path—volume and leverage. Revenue surged 65% to ₹2,269 crore, but the real story is in the profitability. EBITDA more than doubled, jumping 113% to ₹311 crore. The margin expanded to 13.7% from 10.6%, a gain of over 300 basis points. This wasn't magic; it was operating leverage. Higher volumes across electrical and communication cables, especially optic fibre, spread fixed costs over a larger revenue base. When a company grows revenue that fast while keeping costs in check, margins expand, and profit growth outstrips sales growth.
Not everyone had it easy. Coromandel International saw revenue rise 6.7% to ₹10,294 crore, but net profit crashed 33.7% to ₹523.37 crore. The culprit? Raw material costs. The Middle East crisis sent input prices soaring, and government subsidies didn't fully cover the gap. Expenses jumped 11%, eating into the top-line growth. It's a classic margin squeeze: selling more but earning less because costs are rising faster than prices.
Cohance Lifesciences faced a different kind of pressure. Revenue fell 14.8% to ₹477 crore, and net profit plummeted about 80%. The company cited an unfavourable product mix and lower AgChem volumes, but the deeper issue is cost structure. When revenue drops but fixed costs—like R&D, manufacturing setups, and employee salaries—stay largely the same, profits take a disproportionate hit. This is high operating leverage in reverse.
Insecticides (India) also felt the pinch. Revenue grew 7.6% to ₹686 crore, yet net profit slipped 5% to ₹56.17 crore. Finance costs surged 58%, and employee expenses rose over 14%. A weak monsoon hurt volumes, and while the company shifted towards premium products, costs rose faster than sales. It's a reminder that in agribusiness, you can fight the market with pricing, but you can't always beat the weather. Investor Presentation +1
Aster DM Quality Care reported a staggering 136% jump in revenue to ₹2,829 crore, but here's the catch: that's mostly because it merged with Quality Care India. On a like-for-like basis, revenue grew 19%. EBITDA rose to ₹664 crore, with the margin improving to 23.5%. The real drivers were higher patient volumes, better occupancy, and a shift towards complex procedures like robotic surgeries and transplants. The merger brought scale, but the underlying business is also firing on all cylinders. Investor Presentation
Blue Dart Express delivered a solid quarter, with revenue up 14.5% to ₹1,774 crore and net profit rising 28.4% to ₹104 crore. The company cited better yield realisation and an improved product mix, but the EBITDA margin stayed flat at around 16.2%. This suggests that while the company is growing volumes and getting slightly better prices, it's also facing cost pressures that prevent margin expansion. It's a good, not great, result—growth without the pricing power to lift margins significantly.
Corporate India isn't just managing quarters; it's building for the long term. Mahindra & Mahindra approved investing up to ₹1,450 crore in SML Mahindra's rights issue, subscribing to its full entitlement and backstopping any unsubscribed portion. This comes after SML acquired Mahindra's truck and bus division, a move aimed at creating a stronger commercial vehicle platform. The capital injection will likely fund that integration and expansion, signalling M&M's commitment to the CV space despite near-term market softness. Other
Marico is making a smaller but telling bet. It's acquiring a 51% stake in Bonorizon Consumer Ventures for up to ₹35 crore. Bonorizon is a new FMCG player, and Marico sees it as a way to accelerate its digital growth engine in international markets. It's a classic venture-style investment: small ticket, high potential, and aligned with Marico's strategy to reduce reliance on commodity-linked businesses and build a premium, digital portfolio.
Kirloskar Oil Engines is unlocking value in its financial services arm. Its subsidiary, Arka Fincap, secured an ₹800 crore investment from TPG's The Rise Funds. The capital will fuel Arka's secured retail lending ambitions, targeting MSMEs and vehicle operators. For Kirloskar, it's a win—it brings in a marquee investor, strengthens Arka's balance sheet, and reduces the parent's future funding burden without ceding control.
It's not all smooth sailing. Aarti Drugs subsidiary Pinnacle Life Science received three US FDA Form 483 observations at its Baddi plant. None relate to data integrity, which is good, but the company now has 15 days to respond with a corrective plan. While operations remain unaffected, the incident highlights the compliance risks for pharma companies exporting to regulated markets. Any escalation could delay approvals or disrupt exports, though management has downplayed immediate financial impact.
Zydus Lifesciences had better news on the clinical front. Its drug saroglitazar met the primary endpoint in a Phase 2b MASH trial, showing resolution of liver inflammation without worsening fibrosis. However, management isn't rushing into a Phase 3 MASH trial, citing the difficulty of biopsy-led studies. Instead, the focus remains on Primary Biliary Cholangitis (PBC), where the drug is under US FDA priority review with a decision expected by November 27, 2026. The MASH data supports the overall profile, but the commercial timeline for that indication remains uncertain. Transcript
As we move into H2 FY27, the themes are clear. Companies with strong volume growth and operating leverage—like Tata Steel and Finolex—are reaping the rewards. Those facing input cost inflation or structural challenges—like Coromandel and Cohance—are feeling the squeeze. Meanwhile, strategic investments in subsidiaries, new ventures, and R&D are laying the groundwork for the next phase of growth. For investors, the trick is to separate the noise from the signal: which margin pressures are temporary, and which strategic bets will pay off in the long run?
