Decoding DJML Q1 FY26: The Hidden Truth Behind the Plummeting EPS

As an expert financial analyst, I constantly pore over company earnings reports, seeking not just the headline numbers, but the underlying narrative that shapes future performance. Today, we’re diving into the latest investor presentation from DJ Mediaprint & Logistics Limited (DJML) for Q1 FY26.

DJML operates in the dynamic intersection of printing, logistics, and allied services, a sector that stands to benefit significantly from India’s robust domestic growth trends. While the headlines might tout impressive revenue growth, a deeper look reveals both promising developments and areas that warrant closer observation.

Decoding the Sales Performance: A Top-Line Surge

Let’s start with the top line, which offers a compelling story of expansion.

DJML reported a 43.57% year-on-year (YoY) increase in Revenue from Operations for Q1 FY26, soaring from ₹1,499.12 Lakhs in Q1 FY25 to ₹2,152.24 Lakhs. This is a substantial jump and speaks volumes about the company’s ability to capture market share and secure new business. The investor presentation attributes this robust growth to “sustained momentum across all its business verticals, backed by securing new contracts and maintaining high client retention.”

Looking at the historical context, DJML has demonstrated consistent revenue growth, more than tripling its top line from ₹2,466.12 Lakhs in FY21 to ₹7,806.69 Lakhs in FY25. This long-term trend suggests a “fast grower” profile, indicating management’s capability to deliver on expansion plans. The acquisition of a 51% stake in Sai Links is also a strategic move expected to bolster future service delivery and contribute to continued revenue expansion.

The granular view into segmental performance highlights where the growth engines are truly firing:

Table: Standalone Segment Revenue (₹ in Crore)

Both segments have contributed positively, with the Services segment leading the charge with nearly 50% revenue growth. This diversification is a strength, allowing DJML to leverage opportunities across different business lines.

Unpacking Earnings and Profitability: Growth with Nuances

While revenue growth is crucial, the true measure of a company’s health lies in its profitability. This is where DJML’s Q1 FY26 numbers present an interesting, albeit nuanced, picture.

Table: Consolidated Profit & Loss Highlights (₹ in Lakhs)

At first glance, the EBITDA growth of 7.42% looks significantly muted compared to the robust revenue growth. This signals some operational pressures or changes in cost structure. A major factor contributing to this is the “Cost of materials consumed,” which surged by 155.94% YoY. However, this was partially offset by a negative “Changes in Inventories” figure of (₹792.12) Lakhs. In accounting terms, a negative value here, treated as a reduction in expense, means DJML sold or consumed more inventory than it purchased or produced this quarter, which positively impacted profitability.

Despite the EBITDA moderation, Profit After Tax (PAT) grew by a healthy 37.45%. This suggests effective cost management further down the P&L, potentially from lower depreciation (down 22.31%) and significant reductions in “Other Administrative Expenses” (down 33.97%).

Now, for the head-scratcher: the Earnings Per Share (EPS) plummeted by 54.46%. This dramatic drop, despite a healthy PAT growth, needs careful explanation. The investor presentation clarifies that this is primarily due to a 2:1 bonus share issue completed by March 31, 2025. This means that for every 1 share an investor held, they received 2 additional shares, effectively tripling the total number of outstanding shares.

To get a true comparative picture, we must adjust the previous year’s EPS. If we divide the Q1 FY25 EPS of ₹1.12 by 3 (due to the bonus issue), the adjusted Q1 FY25 EPS would be approximately ₹0.37. Comparing this adjusted figure to the Q1 FY26 EPS of ₹0.51 reveals a healthy adjusted EPS growth of approximately 37.8%, which is perfectly in line with the PAT growth. This is a critical insight for investors – the underlying profitability per share did grow, contrary to the unadjusted headline figure.

Further breaking down the EBITDA by segment reveals the operational dynamics:

Table: Standalone Segment EBITDA (₹ in Crore)

This table provides the key explanation for the overall EBITDA pressure. While the Printing segment’s revenue grew, its EBITDA actually declined by over 20%. This indicates significant margin compression or increased operational costs within printing. Conversely, the Services segment delivered exceptional EBITDA growth of over 240%, more than tripling its profitability. This strong performance in Services largely cushioned the impact from the Printing segment, showcasing the benefits of DJML’s diversified portfolio. Investors should monitor if the printing segment’s margin pressure is temporary or a structural shift.

Given the consistent historical revenue and PAT growth, along with adjusted EPS growth in Q1 FY26, DJML continues to exhibit characteristics of a “fast grower,” albeit with some segment-specific challenges to watch.

Working Capital Management: A Mixed Bag

Analyzing working capital provides insight into a company’s operational efficiency and liquidity.

Table: Select Balance Sheet Items (₹ in Lakhs)

From March 2024 to March 2025, Inventories witnessed a staggering 211% increase. While this might indicate overstocking, the Q1 FY26 P&L shows a reduction in inventories, suggesting the company might be utilizing this built-up stock, which can aid cash flow in the short term. However, continued high inventory levels relative to sales need close monitoring to avoid obsolescence or carrying costs.

Trade Receivables grew by 42.75%, which is largely in line with the 43.57% revenue growth. This indicates that the company is managing its collections effectively in proportion to its sales expansion, which is a positive sign.

On the liabilities side, Trade Payables surged by over 164%. While higher payables can boost cash flow by extending credit from suppliers, such a sharp increase warrants attention. It could signify better negotiation power with suppliers, or it might hint at increased pressure on liquidity, making the company rely more on supplier credit. The context of their business and payment cycles would be crucial here.

Overall, working capital management appears to be dynamic, with the significant increase in payables potentially improving the cash conversion cycle, provided inventory and receivables remain well-managed.

Capital Expenditure and Financing: Fueling Future Growth

DJML’s strategic initiatives clearly involve significant investments. The company highlights “upgraded logistics fleet with new trailers and digital printers” in 2024 and further “expanded operational centers in Bhiwandi & Mysuru” in FY26.

While the “Property, Plant and Equipment (PPE)” on the balance sheet showed a slight decline from Mar-24 to Mar-25 (₹1,962.97 Lakhs to ₹1,764.95 Lakhs), this might be due to higher depreciation or a reclassification of assets. The stated operational expansions, including the acquisition of Sai Links, confirm the company’s commitment to growth-oriented CapEx. The “Loans & Advances” in current assets also jumped significantly from Mar-24 to Mar-25 (from ₹101.24 Lakhs to ₹433.38 Lakhs), potentially reflecting advances for such expansion projects.

On the financing front, the most striking change is the tripling of “Equity Share Capital” from ₹1,082.78 Lakhs in Mar-24 to ₹3,248.35 Lakhs in Mar-25, directly confirming the 2:1 bonus share issue. This move enhances liquidity for shareholders and reflects management’s confidence. Additionally, “Share application money pending allotment” of ₹2,371.51 Lakhs in Mar-25 indicates a significant pipeline of fresh equity infusion, further strengthening the company’s capital base.

Total borrowings increased slightly from Mar-24 to Mar-25 (from ₹1,546.17 Lakhs to ₹1,639.30 Lakhs), with a notable shift towards higher current borrowings. The overall financing strategy appears to be a mix of internal accruals, strategic debt, and significant equity infusion, aligning with a company in a growth phase.

Key Takeaways and Outlook

DJ Mediaprint & Logistics Limited delivered a strong Q1 FY26 in terms of top-line growth, with revenue surging by over 43%. While overall EBITDA growth was moderate due to pressures in the printing segment, the exceptional performance and profitability of the services segment cushioned the impact, highlighting the benefits of their diversified model.

The apparent decline in EPS is a classic case of needing to look beyond the raw numbers. Once adjusted for the 2:1 bonus share issue, DJML’s Q1 FY26 EPS demonstrated healthy growth in line with its PAT, confirming its underlying profitability trajectory.

From an investment perspective, DJML aligns well with the “domestic-growth themes” prevalent in the Indian economy. Its focus on digital acceleration, strategic acquisitions, and operational expansion positions it to capitalize on infrastructure development and strong domestic demand. The significant increase in equity base and strategic CapEx plans underpin confidence in future growth prospects.

However, investors should keep a close eye on:

• The sustainability of the Services segment’s high profitability.
• Whether the margin pressures in the Printing segment are temporary or indicative of a deeper issue.
• The ongoing management of inventory levels and the higher reliance on trade payables.

Overall, DJML appears to be a fast-growing company executing its expansion strategy, with some specific operational nuances to monitor in the coming quarters.

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