ANANTRAJ Q2 FY27 Results Analysis: Margins Expand 396 bps, FCF Turns Negative

ANANTRAJ's Q2 FY27 numbers came in mixed, with revenue of Rs. 661.53 Cr (+4.87% YoY) and PAT growth of +13.25% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q2 FY27 delivered margin-led earnings: EBITDA grew 21.04% YoY on a 396 bps YoY margin expansion to 31.72%, while revenue grew 4.87% and PAT 13.25%. The offset is cash quality — H1 CFO was just 0.10x PAT with FCF of negative Rs.251.39 Cr as a Rs.449.78 Cr inventory build and data-centre capex are funded by QIP proceeds and customer advances. No management guidance number was beaten or missed in this filing; DC targets (63 MW by Dec 2026, Rs.1,200 Cr DC revenue) remain untestable pending disclosure.

Key Investment Insights

Key Positives

• Revenue grew 4.87% YoY to Rs.661.53 Cr
• EBITDA margin expanded 396 bps YoY to 31.72% on the company's basis, a five-quarter climb
• EBITDA grew 21.04% YoY to Rs.215.37 Cr, ~4x revenue growth
• PAT grew 13.25% YoY to Rs.156.49 Cr; EPS Rs.4.36 vs Rs.4.02
• Cost of sales fell 2.60% YoY to 64.66% of revenue from 69.62%
• Finance costs fell 62.02% YoY to Rs.1.09 Cr; net cash of Rs.127.17 Cr maintained
• Subsidiaries (largely DC/cloud) contributed 48.39% of consolidated owners' PAT
• Rs.573.48 Cr of QIP proceeds remain unutilised, funding the DC build-out

Risk Factors

• H1 CFO of Rs.31.82 Cr was just 0.10x H1 PAT; H1 FCF was negative Rs.251.39 Cr
• Inventory build of Rs.449.78 Cr in six months as collections lag POCM billings
• Depreciation rose 149.06% YoY to Rs.26.50 Cr as data-centre assets capitalise, pressing between EBITDA and PAT
• Other expenses jumped 68.29% YoY with no explanation in the filing
• Other income of Rs.17.42 Cr (+72.48% YoY) is interest on parked QIP funds, not operating earnings
• Revenue growth decelerated to 4.87% YoY from 6.58% in Q1 FY27