Everest Kanto Q1FY27 net profit falls 42% to ₹30 crore amid constraints
Everest Kanto Cylinder's Q1FY27 results show a 42% YoY decline in net profit to ₹30 crore, driven by a 10% revenue contraction and the absence of a prior-year exceptional gain. EBITDA fell 23% to ₹47 crore as margins compressed to 14%. Despite operational constraints in India and subdued US performance, the company highlights healthy demand in CNG and industrial gases, ongoing Mundra capacity ramp-up, and strategic expansion in Egypt and MENA markets.
*this image is generated using AI for illustrative purposes only.
Everest Kanto Cylinder reported a significant decline in profitability for the first quarter of FY27, with consolidated net profit falling to ₹30 crore from ₹52 crore in the same period last year. The company’s revenue also contracted by 10% to ₹346 crore compared to ₹387 crore year-on-year. Profit before tax (PBT) declined 27% to ₹39 crore from ₹53 crore.
The decline in top-line growth translated directly into lower operating profits. EBITDA dropped 23% to ₹47 crore from ₹61 crore, reflecting pressure on the company’s core operations during the period. Management attributed the subdued performance to temporary supply-side and operating constraints, particularly in India operations, alongside relatively subdued international performance.
Financial Performance
The following table outlines the key financial metrics for the quarter:
| Metric: | Q1FY27 | Q1FY26 | Change |
|---|---|---|---|
| Revenue: | ₹346 crore | ₹387 crore | -10% |
| EBITDA: | ₹47 crore | ₹61 crore | -23% |
| PBT: | ₹39 crore | ₹53 crore | -27% |
| Net Profit: | ₹30 crore | ₹52 crore | -42% |
Margin Contraction
The compression in earnings was accompanied by a notable contraction in operating margins. The consolidated EBITDA margin stood at 14%, down 217 bps from 16% in the prior year period. PBT margin also contracted to 11% from 14%. This indicates that cost structures or pricing dynamics impacted the company’s ability to retain operating income relative to sales volume. Employee benefits expense rose 20% to ₹47 crore from ₹39 crore, while COGS fell 18% to ₹163 crore from ₹200 crore.
Standalone Results
On a standalone basis, revenue fell to ₹203 crore from ₹237 crore. Standalone EBITDA decreased to ₹36 crore from ₹41 crore, although the EBITDA margin improved slightly to 18% from 17%. Standalone net profit declined to ₹22 crore from ₹26 crore, with the PAT margin remaining stable at 11%.
What the Numbers Show
The divergence between the decline in revenue and the sharper drop in net profit is partly explained by non-recurring items in the prior year. Q1FY26 included an exceptional gain of ₹12.6 crore representing Employee Retention Credit (ERC) received by CP Industries, the US subsidiary. Excluding this one-time gain, the underlying operational decline was still significant, driven by temporary supply-side constraints and subdued international demand. With EBITDA falling by approximately 23% while net profit declined by over 40%, the data points to the amplification of bottom-line impact by the absence of prior year exceptional gains. Additionally, other income rose to ₹10 crore from ₹6 crore, providing some offset to the operational pressure.
Operational Highlights
Despite near-term headwinds, management highlighted healthy underlying demand across CNG and industrial gas applications in India. Key operational developments include:
- Mundra Ramp-up: New capacity is progressively ramping up to support domestic demand.
- US Order Visibility: A healthy order book provides medium-term business visibility.
- Global Portfolio Optimisation: The divestment of Hungary operations has been completed, sharpening focus on core markets.
- Higher-Value Applications: Growing focus on semiconductors, defence, and specialised industrial applications.
- Clean Energy Opportunity: Expansion into CBG, hydrogen, and gas-based mobility.
- International Expansion: Improving activity in the UAE despite regional logistics challenges, and a new manufacturing platform in Egypt to strengthen regional market access.
- EGYPES 2026 Participation: The company showcased high-pressure gas cylinder solutions at EGYPES 2026 in Cairo, strengthening engagement with customers and industry stakeholders across MENA markets.
Historical Stock Returns for Everest Kanto Cylinder
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.80% | -2.80% | -4.37% | -9.02% | -28.40% | +4.22% |
How long are the temporary supply-side constraints in India expected to persist, and what specific measures is management taking to accelerate the Mundra capacity ramp-up?
What percentage of the current order book visibility in the US is attributable to high-margin sectors like semiconductors and defence versus traditional industrial applications?
Given the 217 bps contraction in consolidated EBITDA margins, does management expect margin recovery in Q2FY27 driven by volume normalization or pricing adjustments?
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