Q2FY27 Earnings: Revenue Growth Outpaces Margins Across Sectors

The September quarter results season has produced a recurring pattern across sectors, according to several research houses: companies reporting strong revenue growth while earnings before interest, tax, depreciation and amortisation (EBITDA) lag or miss estimates, often due to input cost inflation or execution timing.

HDFC Securities reported that Hindustan Aeronautics posted 15% year-on-year revenue growth with a 2% beat against estimates, but a 6% EBITDA miss. The house maintained an ADD rating with a raised target price of INR 5,580, citing expected acceleration of LCA Tejas MK1A deliveries. A similar pattern was noted at Bharat Dynamics, where HDFC Securities said revenue grew 45% year-on-year but EBITDA fell 46% on input cost inflation; the house maintained a REDUCE rating with a target of INR 1,152, pending sustained faster order execution.

In the power transmission and distribution space, HDFC Securities described a revenue beat alongside an EBITDA and adjusted profit after tax miss at Hitachi Energy India, even as the company posted a record order backlog and strong order growth excluding HVDC. The house maintained an ADD rating but reduced its target price to INR 30,131, having cut its valuation multiple from 65x to 55x. By contrast, Way2Wealth took a more constructive line on GE Vernova T&D India, citing a 52% year-on-year rebound in order intake to ₹24.4 billion, 32% revenue growth, and an EBITDA margin of 27.1% at the higher end of guidance, alongside a net debt-free balance sheet; it maintained a BUY rating with an unchanged target of ₹6,587.

Elsewhere, HDFC Securities noted that Alkem Laboratories delivered EBITDA in line with estimates on 14% sales growth, with management guiding to roughly 11% India growth in FY27, prompting a revised ADD target of INR 6,020. At Manappuram Finance, the house said Q2FY27 earnings beat estimates on improved operating efficiency and yields, but flagged moderating assets-under-management growth and competitive pressure, maintaining a REDUCE rating with a revised sum-of-the-parts target of INR 325. Star Cement's quarter showed muted 2% volume growth and lower unit EBITDA, yet HDFC Securities kept a BUY rating with an unchanged target of INR 250, citing an expected rebound in the second half of FY27.

Industrial names showed a comparable split. Way2Wealth said APL Apollo Tubes reported its strongest-ever quarter in Q2FY27, with record volumes, EBITDA and net profit, and described the stock as offering an opportunity to buy on dips at around 35 times FY28 price-to-earnings. Jainam Broking separately reported that Tata Power's profit after tax grew 33% year-on-year to ₹1,652 crore on 26% revenue growth, and that Garden Reach Shipbuilders & Engineers posted a 12% rise in net profit to ₹172 crore on higher revenue. Jainam also noted that Mishra Dhatu Nigam's net profit more than doubled to ₹27.8 crore as revenue surged 41% to ₹295.9 crore, while Bajaj Hindusthan Sugar's consolidated net loss widened 15.23% to ₹121.28 crore as its core sugar business remained loss-making.

Taken together, the houses' commentary points to a quarter where topline momentum has been broadly intact across defence, industrials and select financials, but where cost inflation, competitive intensity or execution timing has weighed on margins at several companies, leading to a mix of raised, reduced and unchanged price targets even where ratings were left unchanged.