Aequs swings to profit on other income as operating margin turns negative
Revenue rose 18.84% QoQ, but faster cost growth drove a 7.72-point margin decline; the stock fell 10.00% on the results day.
Filed 27 May 2026, 00:19 IST · Aequs Ltd (AEQUS)
Key takeaways
- Standalone net profit was largely non-operating, with other income equal to 111.79% of profit before tax.
- Expenses grew 28.29% QoQ against 18.84% revenue growth, cutting operating margin by 7.72 percentage points to -4.39%.
- The stock fell 10.00% on the results day and was down 14.95% after five sessions.
Price around the results
Revenue growth did not cover the cost increase
Standalone revenue rose 18.84% QoQ, but expenses increased 28.29%, pushing operating profit into a loss and reducing operating margin by 7.72 percentage points. Interest expense also rose 70.91%, adding to the pressure below operating profit. The resulting profit before tax swing from a loss of Rs 7.36 cr to a profit of Rs 57.59 cr was driven by other income rather than operating performance.
Profit quality was weak despite the reported profit
Other income contributed 111.79% of profit before tax, while the tax rate fell 3.89 percentage points QoQ to 9.42%, both making the reported net profit less reflective of operations. Aequs's -4.39% operating margin was 20.05 percentage points below the 15.66% median for 71 Industrials peers and placed it first from the bottom. Management said low utilisation in Consumer Electronics meant full operating costs were charged to the P&L, while growth investments continued to weigh on losses.
Management points to Aerospace, Consumer and new programmes
Management said Q4 revenue growth came from continued expansion in the Aerospace and Consumer segments, describing the quarter as its highest quarterly revenue with 47% YoY growth. The company said it expects to become a key non-stick-pan supplier to Tramontina and plans to increase volumes in product programmes with Hasbro. Management also said it expects growth in global and Indian precision-engineered components markets.
The market reaction was sharply negative
The stock fell 10.00% on the results day, with a 6.39% opening gap lower and traded volume at 2.09 times the reference level. The decline extended to 14.95% after five sessions, before the stock showed a 17.55% return after 30 sessions. The immediate reaction reflects the gap between reported net profit and the negative operating margin.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹37 cr | ₹31 cr | +18.84% |
| Other income | ₹64 cr | ₹-4 cr | — |
| Expenses | ₹38 cr | ₹30 cr | +28.29% |
| Operating profit | ₹-2 cr | ₹1 cr | — |
| Operating margin (%) | -4.39% | 3.33% | — |
| Interest | ₹3 cr | ₹2 cr | +70.91% |
| Depreciation | ₹2 cr | ₹2 cr | +0.43% |
| Profit before tax | ₹58 cr | ₹-7 cr | — |
| Tax | ₹5 cr | ₹-1 cr | — |
| Net profit | ₹52 cr | ₹-6 cr | — |
| EPS (₹) | ₹0.86 | ₹-0.10 | — |
Operating margin of -4.39% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -10.00% | -9.97% |
| Next session | -9.49% | — |
| 5 sessions | -14.95% | -12.87% |
| 15 sessions | -4.04% | — |
| 30 sessions | +17.55% | — |
Volume on the results session was 2.09× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q4 revenue growth was driven by continued growth in the Aerospace and Consumer segments.
Guidance & outlook
- Aequs expects to become a key supplier of non-stick pans to Tramontina going forward.
- Aequs expects strong growth in both global and Indian precision engineered components markets.
- Aequs plans to increase volumes in product programmes with Hasbro.
Problems & risks
- Consumer Electronics had low utilisation after commercial operations began, while full operating costs were charged to the P&L.
- Aequs reported that higher depreciation and increased taxation affected PAT.
- Aequs said losses continued to be affected by low consumer utilisation and growth investments.
What to watch
- Whether operating margin recovers from -4.39% as Consumer Electronics utilisation improves.
- Whether other income falls from its 111.79% share of profit before tax.
- Whether interest expense moderates after its 70.91% QoQ increase.