Five Indian Startups Report Strong Q2 Profits as Revenue Growth Outpaces Expenses

Five Indian startups across office spaces, auto components, construction materials, and adtech reported double-digit profit growth in Q2 FY27, with revenue expansion outstripping expense increases—a rare bright spot in a funding-scarce environment. The results from DevX, SEDEMAC, ArisInfra, Awfis, and Mobavenue underscore how companies in B2B services, manufacturing, and infrastructure are prioritizing efficiency even as they scale, though rising input costs and working capital pressures remain hurdles.

DevX, the flexible workspace provider, tripled its net profit to ₹5.5 crore (213.5% YoY) on 55% revenue growth to ₹80.2 crore, but expenses surged 43% to ₹75.6 crore, Inc42 reported. The company’s board approved a ₹300 crore private placement via non-convertible debentures (NCDs), signaling confidence in its growth trajectory despite sequential profit volatility. Founders Parth Shah, Rushit Shah, and Umesh Uttamchandani also secured ₹15 crore in share allotments, boosting their stake to 37.29%. DevX competes with peers in the coworking space, though its revenue rebound suggests a broader recovery in demand for managed office solutions beyond major metros.

Auto components manufacturer SEDEMAC Mechatronics saw net profit rise 30% to ₹39.2 crore, driven by a 40% revenue jump to ₹400.6 crore, but margins tightened due to 56% higher material costs and 45% expense growth, according to Inc42. The company’s mobility segment—accounting for the majority of revenue—surged 53% YoY, while its industrial segment declined 26%, reflecting shifting market dynamics. SEDEMAC’s ISG and EFI ECUs crossed 1 million shipments in under two years, a milestone that could attract more OEM partnerships—but semiconductor shortages and commodity price volatility remain key risks. Its negative cash flow from operations (₹20.4 crore in H1 FY27) contrasts with last year’s surplus, highlighting working capital strains as receivables and inventories increased significantly.

ArisInfra, the construction materials marketplace, more than doubled its profit to ₹22.8 crore (78% YoY) as revenue grew 28% to ₹307.7 crore, with contract manufacturing and developer-as-a-service (DaaS) now accounting for two-thirds of revenue, Inc42 noted. The shift toward higher-margin services—including DaaS, which delivered strong profitability—boosted overall margins to 11.6%, up significantly from the prior year. The company’s order book expanded substantially, signaling robust demand from developers. Yet finance costs rose, and tax expenses doubled, partially offsetting gains. Chairman Ronak Morbia’s comment—*"Our growth is becoming more capital-efficient"*—reflects a focus on operational improvements, though cash flow efficiency remains a critical watch item.

Awfis, another coworking space provider, nearly doubled its profit to ₹30.8 crore on 20% revenue growth, while Mobavenue, the adtech firm, reported a 54% profit jump to ₹11.3 crore on 41% revenue growth, both according to Inc42. These results align with broader trends: Indian B2B and infrastructure startups are achieving profitability, even as consumer-facing peers face slower progress in burn-rate reduction. Earlier coverage of IdeaForge’s turnaround (November 2026) and Aye Finance’s lending growth (October 2026) similarly highlighted how niche verticals with recurring revenue models are navigating the downturn more effectively than scale-dependent businesses.

What’s next? For DevX and its peers, the ₹300 crore NCD raise could support expansion into new markets, but consistent demand growth will be essential. SEDEMAC’s export-focused production is a positive development, though supply chain risks may impact execution. ArisInfra’s DaaS growth serves as a model for other proptech firms, but rising costs could limit further financial flexibility. Meanwhile, the emerging profitability trend—from ixigo’s first profitable quarter (October 2026) to Mobavenue’s rebound—suggests a quiet recovery in Indian deep-tech and services startups, even as venture funding remains constrained.

The takeaway? Profitability in this environment depends on structural efficiency. These startups are proving that margins and operational discipline matter more than aggressive scaling in a high-rate, low-funding landscape. For founders and investors, the challenge ahead is whether this disciplined growth can translate into sustainable business valuations—or if the next economic shift will test even the most resilient operators.

Sources: inc42.com · inc42.com · inc42.com · inc42.com · inc42.com