Operating margin rebounds, but other income drove 84.92% of PBT
Revenue rose 7.64% QoQ while expenses fell 94.26%, but net profit dropped 91.12% after the prior quarter's unusually high other income.
Filed 04 Nov 2026, 19:44 IST · after market close · Aeroflex Enterprises Ltd (AEROENTER)
Key takeaways
- Standalone operating margin rebounded 880.93 percentage points QoQ to 50.31% as expenses fell faster than revenue.
- Other income contributed 84.92% of standalone profit before tax, making reported profit quality weak.
- Standalone net profit fell 91.12% QoQ as the prior quarter benefited from much higher other income.
Price around the results
A sharp sequential rebound in operating margin
Standalone revenue grew 7.64% QoQ, while expenses declined 94.26%, causing operating margin to swing from -830.62% to 50.31%. The 880.93 percentage-point improvement reflects the much lower expense base rather than a comparable acceleration in revenue.
Non-operating income remains central to profit
Other income accounted for 84.92% of standalone profit before tax, so reported earnings were heavily dependent on non-operating income. Profit before tax fell 92.92% QoQ as other income declined 94.89% from the prior quarter. The tax rate also fell 17.79 percentage points to 12.05%, which supported net profit but did not offset the fall in pre-tax profit.
Margin stood well above the Industrials peer median
Among 130 Industrials peers that had reported, the company's 50.31% operating margin was 38.48 percentage points above the sector median of 11.83%. The available quarterly sequence shows a sharp reversal from Q1FY27, rather than an established multi-quarter margin trend.
Management flags integration and finance initiatives
Management said the proposed merger of Hyd-Air Engineering is intended to integrate operations and create a more streamlined business structure. The presentation also said Aeroflex Finance is working with Vartis Platforms and FinAGG on technology for loan origination and lifecycle management.
Results were filed after market close
The standalone results were filed after market close on 04 Nov 2026 at 19:44 IST. The filing therefore did not have a reported market reaction at the time of this note.
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 | ₹3 cr | ₹3 cr | +7.64% |
| Other income | ₹8 cr | ₹153 cr | -94.89% |
| Expenses | ₹1 cr | ₹26 cr | -94.26% |
| Operating profit | ₹1 cr | ₹-23 cr | — |
| Operating margin (%) | 50.31% | -830.62% | — |
| Interest | ₹0 cr | ₹0 cr | +0.00% |
| Depreciation | ₹0 cr | ₹0 cr | +12.50% |
| Profit before tax | ₹9 cr | ₹130 cr | -92.92% |
| Tax | ₹1 cr | ₹39 cr | -97.14% |
| Net profit | ₹8 cr | ₹91 cr | -91.12% |
| EPS (₹) | ₹0.72 | ₹8.07 | -91.08% |
Operating margin of 50.31% compares with a Industrials sector median of 11.83% across 130 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- Aeroflex Industries announced the proposed merger of Hyd-Air Engineering to integrate operations.
New initiatives
- Aeroflex Finance collaborates with Vartis Platforms and FinAGG to improve loan origination and lifecycle management.
What to watch
- Whether operating margin holds above 50.31% after the sharp sequential rebound.
- Whether other income remains below the 84.92% share of profit before tax.
- Whether revenue growth builds on the +7.64% QoQ increase.