ATGL Q2 FY27 Results Analysis: Revenue Jumps 34%, Margin Compresses 321 bps

ATGL's Q2 FY27 numbers came in soft, with revenue of Rs. 2,109.65 Cr (+33.83% YoY) and PAT growth of +5.98% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

ATGL delivered 33.83% YoY revenue growth to Rs.2,109.65 Cr, ahead of its ~18% revenue guidance pace, but gas cost inflation of 44.87% YoY compressed EBITDA margin 321 bps YoY to 15.53%, limiting PAT growth to 5.98%. The sequential margin recovery of 136 bps from Q1's trough is a positive signal, but the FY27 EBITDA target of ~Rs.1,500 Cr requires a demanding 51% H2 step-up from H1's Rs.597.64 Cr. Free cash flow was nearly zero at Rs.5.91 Cr for H1 as capex absorbed operating cash flow, with borrowings rising to Rs.2,342 Cr.

Key Investment Insights

Key Positives

• Revenue grew 33.83% YoY to Rs.2,109.65 Cr, the fastest pace in the available quarterly series
• EBITDA margin recovered 136 bps QoQ to 15.53% from Q1's 14.17% trough
• PAT growth recovered to +5.98% YoY from Q1's -14.23% YoY decline
• H1 revenue growth of +30.6% is ahead of management's FY27 revenue guidance of ~18% growth
• JV share of profit more than doubled YoY to Rs.8.42 Cr in Q2; subsidiary contribution rose to Rs.6.39 Cr from Rs.1.81 Cr
• D/E ratio held steady at 0.45 with ICRA and CARE AA+/A1+ ratings reaffirmed in Aug 2026
• Employee costs (+14.08%) and other expenses (+14.23%) grew well below revenue growth of +33.83%

Risk Factors

• Cost of natural gas grew 44.87% YoY, outpacing revenue growth by 1,104 bps and compressing EBITDA margin 321 bps YoY to 15.53%
• FY27 Group EBITDA target of ~Rs.1,500 Cr requires H2 EBITDA of Rs.902 Cr, a 51% sequential increase from H1's Rs.597.64 Cr
• H1 free cash flow was only Rs.5.91 Cr as capex of Rs.450.45 Cr consumed nearly all operating cash flow
• Cash and equivalents fell 56.59% to Rs.109.86 Cr from Rs.253.05 Cr at March 31, 2026
• Effective tax rate rose 301 bps YoY to 28.33%
• H1 normalized PAT of Rs.305.94 Cr is Rs.9.05 Cr below reported PAT due to a Rs.12.31 Cr net one-time FVTPL gain