INDGN Q2 FY27 Results Analysis: Revenue Surges 40%, PAT Growth Lags

INDGN's Q2 FY27 numbers came in mixed, with revenue of Rs. 1,122.30 Cr (+39.55% YoY) and PAT growth of +9.99% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Revenue grew 39.55% YoY with all segments up double-digit and a second consecutive sequential EBITDA margin improvement to 16.55%, but PAT grew only 9.99% due to acquisition-driven D&A and other-expense inflation. The margin is 2.45 pp below management's 19% guided floor with the stated Q3 FY27 inflection quarter next, and H1 operating cash flow turned negative at −Rs.13.3 crore on working-capital build and advance-tax timing. Execution is on the guided path directionally, but the H2 margin step-up is the key catalyst to watch.

Key Investment Insights

Key Positives

• Revenue grew 39.55% YoY to Rs.1,122.3 crore (+5.57% QoQ); H1 revenue Rs.2,185.4 crore, +39.64% YoY
• All three segments grew ≥22.79% YoY: ECS +45.17%, EMS +22.79%, Others +62.50%
• Others segment swung from a Rs.5.9 crore loss to a Rs.0.3 crore profit
• EBITDA margin improved 16 bps QoQ to 16.55% despite the July 2026 wage-hike layer; employee-cost ratio fell 340 bps YoY to 60.74%
• Sequential EBITDA improvement guidance met: Rs.174.2 → Rs.185.7 crore (+6.6% QoQ)
• Zero borrowings; liquidity of Rs.1,256.0 crore; receivables grew slower than revenue (+16.62% vs +39.64%)
• Capex at 1.15% of H1 revenue, on track vs ~1.0% FY27 guidance

Risk Factors

• EBITDA margin of 16.55% is 2.45 pp below the 19% floor of management's 19-20% Q4 FY27 guided band, with the stated Q3 FY27 inflection quarter next
• PAT grew only 9.99% YoY vs revenue +39.55%, with D&A +98.29% and other expenses +72.46% YoY
• H1 net operating cash flow was −Rs.13.3 crore vs +Rs.202.8 crore a year ago; FCF −Rs.38.4 crore
• Both core segments' pre-D&A margins sit below year-ago levels (ECS 16.27% vs 17.82%; EMS 22.74% vs 25.65%)
• Standalone PAT declined 2.84% YoY even as standalone revenue grew 20.15%
• Unbilled receivables built by Rs.135.2 crore over six months; TCPA claims due 9 December 2026