Operating margin slips to 1.81% as expenses outpace revenue
Higher other income and a zero tax charge lifted net profit even as interest and depreciation rose.
Filed 29 Oct 2026, 19:35 IST · after market close · 3IINFOLTD (3IINFOLTD)
Key takeaways
- Consolidated operating margin fell 1.04 percentage points QoQ to 1.81% as expenses grew 3.38% against 2.29% revenue growth.
- Other income made up 155.36% of pre-tax profit, while the tax rate was 0.00%, limiting the quality of the Rs 6.72 cr net profit.
- Revenue increased 2.29% QoQ to Rs 182.01 cr, but operating profit declined 35.11% to Rs 3.29 cr.
Revenue growth did not cover the cost increase
Consolidated revenue rose 2.29% QoQ, but expenses grew faster at 3.38%, reducing operating profit by 35.11% to Rs 3.29 cr. Operating margin narrowed by 1.04 percentage points to 1.81%. This was the first sequential comparison available in the reported period, with no year-on-year comparison provided.
Other income supported reported profit
Other income increased 63.38% QoQ to Rs 10.44 cr and equalled 155.36% of pre-tax profit, making reported earnings heavily dependent on non-operating income. Net profit still rose 3.07% to Rs 6.72 cr despite the operating profit decline, helped by a 0.00% tax rate. Interest expense rose 48.11% and depreciation increased 19.82% QoQ, adding to the pressure below operating profit.
Margin fell from the previous quarter; filing came after close
Operating margin declined from 2.85% in Q1FY27 to 1.81% in Q2FY27, while revenue increased from Rs 177.94 cr to Rs 182.01 cr. The results were filed after market close on 29 Oct 2026, so there is no market reaction to assess in this update.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹182 cr | ₹178 cr | +2.29% |
| Other income | ₹10 cr | ₹6 cr | +63.38% |
| Expenses | ₹179 cr | ₹173 cr | +3.38% |
| Operating profit | ₹3 cr | ₹5 cr | -35.11% |
| Operating margin (%) | 1.81% | 2.85% | — |
| Interest | ₹2 cr | ₹1 cr | +48.11% |
| Depreciation | ₹5 cr | ₹5 cr | +19.82% |
| Profit before tax | ₹7 cr | ₹6 cr | +14.68% |
| Tax | ₹0 cr | ₹-1 cr | — |
| Net profit | ₹7 cr | ₹7 cr | +3.07% |
| EPS (₹) | ₹0.32 | ₹0.31 | +3.23% |
What to watch
- Whether operating margin recovers from 1.81% in the next quarter.
- Whether expenses continue to grow faster than revenue after the 3.38% versus 2.29% QoQ gap.
- Whether net profit continues to receive support from a 0.00% tax rate and other income equal to 155.36% of pre-tax profit.