3M India sales rise, but cost growth cuts operating margin to 15.36%
Sequential profit also fell as expenses grew faster than revenue and other income dropped 86.82% from the previous quarter.
Filed 06 Nov 2026, 12:36 IST · 3M India Ltd (3MINDIA)
Key takeaways
- Revenue grew 14.69% year on year, but expenses rose 21.65%, cutting operating margin by 4.84 percentage points to 15.36%.
- Net profit fell 17.17% year on year as higher interest and a 1.65-percentage-point rise in the tax rate offset sales growth.
- Operating margin has declined every quarter from 20.21% in Q1FY26 to 15.36% in Q2FY27.
Price around the results
Sales growth did not translate into operating profit
3M India’s standalone revenue grew 14.69% year on year and 2.06% sequentially, but operating profit declined 12.83% year on year and 6.31% sequentially. Expenses grew faster than revenue in both comparisons, rising 21.65% year on year and 3.74% sequentially. That cost gap explains the 4.84-percentage-point year-on-year and 1.37-percentage-point sequential contraction in operating margin.
Lower other income amplified the sequential profit decline
Sequential profit before tax fell 29.73% as other income dropped 86.82% from Rs 84.77 cr to Rs 11.17 cr, while operating profit also declined. Other income contributed 5.26% of pre-tax profit in the quarter, so it was not the main earnings driver. Interest expense rose 84.05% year on year, and the tax rate increased 1.65 percentage points year on year and 2.49 percentage points sequentially, rather than flattering net profit.
Margin has fallen for six consecutive quarters
The standalone operating margin has declined every quarter from 20.21% in Q1FY26 to 15.36% in Q2FY27. The current quarter therefore extends a multi-quarter deterioration rather than marking a one-off sequential dip. Net profit fell 17.17% year on year and 32.00% sequentially, while EPS declined 17.17% year on year.
Past result-day moves have usually been negative
The stock fell after seven of its last eight results, with a median absolute move of 0.40%. The historical pattern is therefore more often negative than positive, although the typical move has been limited in size.
Q2FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,452 cr | ₹1,423 cr | +2.06% | +14.69% |
| Other income | ₹11 cr | ₹85 cr | -86.82% | -9.33% |
| Expenses | ₹1,229 cr | ₹1,185 cr | +3.74% | +21.65% |
| Operating profit | ₹223 cr | ₹238 cr | -6.31% | -12.83% |
| Operating margin (%) | 15.36% | 16.73% | — | — |
| Interest | ₹4 cr | ₹4 cr | +7.29% | +84.05% |
| Depreciation | ₹18 cr | ₹17 cr | +5.58% | +17.09% |
| Profit before tax | ₹212 cr | ₹302 cr | -29.73% | -15.35% |
| Tax | ₹54 cr | ₹69 cr | -22.07% | -9.47% |
| Net profit | ₹158 cr | ₹233 cr | -32.00% | -17.17% |
| EPS (₹) | ₹140.68 | ₹206.90 | -32.01% | -17.17% |
What to watch
- Whether operating margin holds above 15.36% after six consecutive quarterly declines.
- Whether expenses grow more slowly than revenue after rising 21.65% year on year.
- Whether interest expense moderates after increasing 84.05% year on year.