Expenses outpace revenue growth, cutting AARNAV's margin by 2.12 points
Standalone net profit slipped despite lower taxes, as faster expense growth and higher depreciation offset the revenue increase.
Filed 03 Nov 2026, 21:00 IST · after market close · AARNAV (AARNAV)
Key takeaways
- Standalone revenue rose +48.35% QoQ to Rs 128.37 cr, but expenses grew faster at +51.76%, reducing operating margin by 2.12 percentage points.
- Net profit fell -1.79% QoQ to Rs 1.65 cr despite a 1.38-percentage-point decline in the tax rate, as pre-tax profit decreased -3.54%.
- Depreciation increased +32.82% QoQ while interest fell -1.95%, and other income contributed only 3.67% of pre-tax profit.
Revenue growth did not translate into operating profit
AARNAV's standalone revenue rose +48.35% QoQ, but expenses grew faster at +51.76%. Operating profit increased only +7.77%, showing weaker conversion of the higher revenue into operating earnings. The resulting operating-margin decline was 2.12 percentage points.
Higher depreciation offset lower interest and taxes
Depreciation rose +32.82% QoQ, while interest expense declined -1.95%. Other income was only 3.67% of pre-tax profit, so it was not a major support to earnings quality. The tax rate fell 1.38 percentage points, cushioning the -3.54% decline in pre-tax profit and limiting the net-profit fall to -1.79%.
Quarterly momentum was mixed; results came after market close
Compared with Q1FY27, revenue momentum was strong but the 5.62% operating margin was below 7.74%, and net profit was lower at Rs 1.65 cr versus Rs 1.68 cr. The results were filed after market close, so there is no market reaction to assess yet.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹128 cr | ₹87 cr | +48.35% |
| Other income | ₹0 cr | ₹0 cr | +0.00% |
| Expenses | ₹121 cr | ₹80 cr | +51.76% |
| Operating profit | ₹7 cr | ₹7 cr | +7.77% |
| Operating margin (%) | 5.62% | 7.74% | — |
| Interest | ₹3 cr | ₹3 cr | -1.95% |
| Depreciation | ₹3 cr | ₹2 cr | +32.82% |
| Profit before tax | ₹2 cr | ₹2 cr | -3.54% |
| Tax | ₹1 cr | ₹1 cr | -7.02% |
| Net profit | ₹2 cr | ₹2 cr | -1.79% |
| EPS (₹) | ₹0.39 | ₹0.40 | -2.50% |
What to watch
- Whether operating margin recovers from 5.62% after the 2.12-percentage-point QoQ decline.
- Whether expense growth falls below the current +51.76%, compared with revenue growth of +48.35%.
- Whether depreciation growth moderates from +32.82% and net profit improves from Rs 1.65 cr.