Synopsis:
Despite a sharp rise in quarterly profit, shares of the industrial equipment manufacturer fell after Q2FY26 results. Here are the possible reasons.
Shares of a leading glass-lined equipment maker slipped even after the company reported strong Q2FY26 numbers. Investor sentiment could have been affected by the management’s cautious tone on the global chemical market and the possibility that recent gains had already priced in strong results.
GMM Pfaudler Ltd opened at Rs. 1,287.85 against the previous close of Rs. 1,281 and hit an intraday low of Rs. 1,166.75, marking a decline of 8.91 percent. The company currently has a market capitalisation of Rs. 5,518.50 crore.
Financial Snapshot – Q2FY26
Revenue grew 13.5 percent QoQ to Rs. 902 crore from Rs. 795 crore in Q1FY26. Operating profit rose 20.8 percent to Rs. 122 crore from Rs. 101 crore, with stable operating margins at 13 percent. Profit before tax surged 100 percent to Rs. 64 crore from Rs. 32 crore, while net profit jumped nearly 290 percent to Rs. 39 crore from Rs. 10 crore in the previous quarter. Earnings per share increased from Rs. 2.48 to Rs. 9.22.
On a year-on-year basis, revenue increased 12 percent to Rs. 902 crore from Rs. 805 crore in Q2FY25. Operating profit grew 31.1 percent to Rs. 122 crore from Rs. 93 crore, with margins improving from 12 percent to 13 percent. Profit before tax rose 113.3 percent to Rs. 64 crore from Rs. 30 crore, while net profit climbed 160 percent to Rs. 39 crore from Rs. 15 crore last year. Earnings per share improved to Rs. 9.22 from Rs. 3.39.
As of September 30, 2025, the company’s PAT margin stood at 4.4 percent and EBITDA margin at 13.5 percent. Net debt-to-equity ratio was 0.3 times, and net debt-to-EBITDA was 0.8 times. Trade receivables increased to Rs. 475 crore from Rs. 387 crore in March 2025, while trade payables stood at Rs. 442 crore versus Rs. 376 crore in the same period.
Operational Highlights
Order intake for the quarter stood at Rs. 878 crore compared to Rs. 1,004 crore in Q1FY26, while the order backlog stood at Rs. 2,146 crore, up 21 percent year-on-year. The acquisition of SEMCO Tecnologia em Processos Ltda. in Brazil was completed and consolidated from Q2FY26, expanding the company’s footprint in South America.
In India, demand remained strong across product lines, driven by investments in the pharmaceutical, chemical, and oil & gas sectors. Europe continued to face weakness in traditional markets, although the defense segment contributed positively through acid recovery business opportunities. The US market also showed early signs of improvement due to ‘Make in US’ initiatives. With the SEMCO acquisition complete, GMM Pfaudler plans to focus on growth from non-traditional segments such as mining, metals & minerals, and water treatment.
Comments from the Management
Commenting on the Company’s Q2 FY26 results, Mr. Tarak Patel, Managing Director said, “Our financial performance has improved this quarter, with both revenue and profitability increasing, largely due to strong results from our non-glasslined business which further reinforces our diversification strategy. Order intake has remained robust, particularly in India, where we have seen significant improvements. Our current order backlog stands at Rs. 2,146 crores, reflecting a 21% increase from the same quarter previous year. Although we are seeing positive developments in certain regions and industry segments, the global chemical market is expected to remain sluggish due to overcapacity, geopolitical issues, and uncertainties surrounding trade.”
He further added, “The acquisition of SEMCO Tecnologia em Processos Ltda. has been successfully completed, allowing us to tap into the rapidly growing Mining, Metals & Minerals, and Water Treatment markets in South America. Additionally, our facility in Poland is now fully operational, further enhancing our manufacturing capabilities in Europe.”
Possible Reasons for the Decline
Despite reporting robust profit growth, investor sentiment may have been tempered by the cautious outlook shared by the management regarding global chemical demand. The company highlighted concerns about overcapacity, geopolitical uncertainties, and trade-related risks in key international markets, signaling that growth could remain subdued in certain regions. Investors possibly booked profits after the stock had surged 21 percent in the past month, as the results were largely in line with expectations.
About the Company
GMM Pfaudler Limited provides corrosion-resistant technologies, systems, and services to global clients in the chemical, pharmaceutical, and process industries. With 19 manufacturing facilities across four continents, it employs over 2,000 people and maintains an extensive global sales and service network.
Written by Manan Gangwar
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