IDBI Capital has issued mixed rating changes following its review of Q1 FY27 earnings for four companies. The brokerage retained Hold on Surya Roshni with a target price of ₹225, downgraded Ddev Plastiks to Hold from Buy with a target price of ₹320, maintained Buy on Harsha Engineers with a target price of ₹527, and retained Buy on BLS International with a target price of ₹330. According to reports from NDTV Profit, these rating decisions reflect the brokerage's assessment of each company's Q1 FY27 performance across different sectors.
Harsha Engineers delivered strong Q1 FY27 performance with consolidated revenue of ₹421 crore, up 25% year-on-year and 10.2% sequentially. As reported by Investing.com, the company's India engineering business grew 21% year-over-year and 6% sequentially, while exports from India reached ₹139 crore, up 22% year-over-year. CEO Vishal Rangwala noted that raw-material costs increased by around 68% in the quarter, with the company following a pass-through mechanism that typically has a lag of one to two quarters. EBITDA margin stood at 16.6%, compared with 18.7% a year earlier and 20.1% in the previous quarter, primarily due to higher raw-material costs and foreign-exchange losses. The company also reported bushing sales of ₹34 crore, up 35% year-over-year, stamping sales of ₹19 crore, up 31% year-over-year, and large size bearings sales of ₹10 crore, with management calling Q1 an aberration as the new facility ramps up.
Surya Roshni delivered a mixed Q1 FY27 performance with revenue rising 28% year-on-year to ₹2,050 crore. As reported by IDBI Capital, this growth was driven by 32% growth in the steel pipes and strips business and 15% growth in the lighting and consumer durables segment. The company's consolidated Ebitda margin improved by 113 basis points to 5.5%, while steel pipes Ebitda per tonne climbed 37% to ₹4,006, supported by better realisations, product mix and operating leverage.
CEO Vishal Rangwala stated that Q1 FY27 performance remained highly satisfactory in line with management plan and expectation, except for some minor aberrations. He emphasized that demand remained healthy across markets with good traction and offtake both in India and outside India. The company expects stronger bottom-line growth than revenue growth because of improving subsidiary performance and operating leverage. Management projects consolidated sales growth in the low- to medium-teens for FY27, with India growing in the mid- to high-teens, while noting that 20% growth would be a very tough stretch. For the India engineering business, management expects normal, sustainable EBITDA margins of 20% to 22%, below the quarter's unusually high 24% level, with margin pressure expected to ease as raw-material pass-through catches up over the next one to two quarters.
The rating changes reflect IDBI Capital's assessment of each company's operational performance during the first quarter of FY27. According to the brokerage's analysis, the mixed results across these four companies indicate varying performance levels across different sectors and business segments. Harsha Engineers shares fell 4.94% to $411.55 following the earnings announcement, despite the strong revenue growth, as investors focused more on margin pressure than top-line expansion. The company's working capital cycle improved to 115 days from 130 days in Q4 FY26, and despite margin pressure, InvestingPro data shows Harsha Engineers maintains impressive gross profit margins and has been profitable over the last twelve months, with liquid assets exceeding short-term obligations.
