HBL Engineering Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 871.56 Cr (-28.70% YoY) and PAT growth of -50.20% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 07, 2026 |
|---|---|
| Revenue (Q2) | Rs. 871.56 Cr (-28.70% YoY) |
| PAT (Q2) | Rs. 192.75 Cr (-50.20% YoY) |
| EBITDA margin | 28.90% (-1690 bps YoY) |
| EPS (Q2) | Rs. 6.95 (-50.20% YoY) |
Consolidated revenue fell 28.7% YoY and PAT fell 50.2% YoY as the Kavach-driven Electronics segment declined 54.2% YoY, with EBITDA margin compressing to 28.9% from 45.8%. Sequential recovery (+36.6% revenue, +50.7% EBITDA QoQ), Defence & Aviation growth of 176.7% YoY, and a CARE AA- upgrade are offsets, but H1 operating cash flow turned negative on a Rs.338.74 Cr inventory build. Meeting management's ~50%-of-sales Kavach guide for FY27 requires H2 Electronics revenue of Rs.1,035.71 Cr, +58.8% YoY.
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue | "likely in-line, with upside skew on execution conversion" | consol sales −28.73% YoY (+36.60% QoQ) | Contradicted YoY; partial QoQ recovery |
| Margins | "compressing pressure vs FY26 levels, with an FX offset" | EBITDA margin 28.9% vs 45.8% year-ago (up from 26.2% in Q1) — YoY compression | Played out |
| Expense growth | "watch is whether Q2 expense growth normalises… or extends the compression" | total expenses −4.8% YoY vs revenue −28.7%; other expenses +15.7% YoY — compression extended ex the inventory-build credit | Played out |
| Electronics share vs ~50% guide | "check Q2 FY27 Kavach/Electronics revenue share and growth" | 41.7% share; −54.2% YoY revenue | Contradicted for the quarter |
| Warranty-provision run-rate | "watch for further additions as Kavach installations scale" | no warranty disclosure in the Q2 filing | Not observable |
| Receivables trajectory | "receivables trajectory after Rs.664.46 Cr at March 31, 2026" | 660.28 vs 646.11 — broadly flat | Played out |
| CLW locomotive availability / order-book conversion | "status of replacement locomotive availability" | not addressed in the filing — remains open for the call | Not addressed |
| FX tailwind; lead input-cost headwind | both directional from the pre-call note (web-sourced, dated) | filing does not quantify FX or lead costs in Q2 | Not observable |
Read our full results preview.
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Group total sales > Rs.5,000 Cr by FY 2030 | management projection in the FY26 annual report / AGM notice | H1 FY27 consolidated sales Rs.1,509.59 Cr | Too Early |
| Kavach ~50% of FY27 sales, "some growth in Kavach sales over FY26" | management commentary in the FY26 annual report / AGM communication | Electronics share 41.7% of Q2 sales (64.9% year-ago); H1 share 39.1%; Electronics revenue −54.2% YoY — proxy per prior notes (FY26 Electronics = 49.2% of consol revenue) — H1 to date | Missed |
| Kavach sales "good" in FY27–FY28; decline risk from FY 29 | management commentary in the FY26 annual report | FY29 window not applicable; Q2 Electronics result −68.4% YoY within FY27 | Too Early |
| Fuze approvals (Army; 155MM) during 2027; sonar sales from FY 28 | management commentary in the FY26 annual report | not addressed in this filing | Too Early |
| "Sales and PBT… will vary significantly from quarter to quarter" (Kavach contracts) | management commentary in the FY26 annual report | Electronics revenue −54.2% YoY / consol PBT −52.8% YoY after Q1's −24.5% PAT; margin 28.9% vs 45.8% | Confirmed |
| "About the same ~50% of sales" from Kavach in FY27 | management commentary in the FY26 annual report | Q2 Electronics share 41.7%; H1 39.1% — annual guide still open | Contradicted for H1 to date |
| Q1 cost pressure "normalises in Q2" (analyst watch, not guidance) | prior-quarter analyst notes | employee costs +0.6% YoY normalised; other expenses +15.7% YoY and inventory build mask continued pressure | Partially |
| Metric | Q2 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|
| Industrial Batteries | 28.4 | 22.9 | 21.3 |
| Electronics | 58.2 | 31.1 | 40.1 |
| Defence & Aviation | 4.9 | 24.0 | 26.8 |
Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.