GM Breweries grows revenue 20%, but margins slip.

G M Breweries Limited (GMBREW) reported Q2 FY27 revenue of ₹860.62 crore, up 19.9% year on year. Net profit increased 12.6% to ₹39.29 crore, but EBITDA margin fell to 5.80% from 6.24% a year earlier. The margin number matters more to me than the revenue growth. Revenue grew almost 20%, but profit grew only 13%. Total expenses increased 20.5% to ₹812.25 crore. That tells us that a large part of the additional revenue is being absorbed by higher costs. There is also a useful six-month picture. H1 FY27 revenue reached ₹1,663.52 crore, up from ₹1,355.86 crore. Net profit increased to ₹77.03 crore from ₹60.75 crore. Operating cash generation also improved to ₹95.53 crore from ₹40.02 crore in H1 FY26. My view is mixed. The growth is healthy and the company has no reported financial indebtedness. But I would not call this a strong earnings beat when margins are moving in the opposite direction. GM Breweries operates mainly in country liquor, so excise duty and other government levies are important cost variables. Excise duty, VAT and TCS accounted for ₹647.10 crore of Q2 expenses. The next trigger is Q3 FY27. I want to see EBITDA margin move back above 6% while revenue continues to grow. My stance: Revenue growth is encouraging, but margin recovery is what would make me more positive on the stock.