Dr Agarwals lifts margin as revenue growth outpaces costs
Q4FY26 net profit rose 17.41% YoY despite a higher tax rate, while the stock's initial reaction was muted against its results history.
Filed 21 May 2026, 18:07 IST · after market close · Dr Agarwals Health Care Ltd (AGARWALEYE)
Key takeaways
- Consolidated revenue grew 22.57% YoY as expenses rose 22.30%, lifting operating margin by 0.16 percentage points to 28.62%.
- Net profit rose 17.41% YoY to Rs 49.96 cr, but a 7.51-percentage-point increase in the tax rate limited the conversion of pre-tax growth.
- The stock fell 0.36% on the first session after results, a smaller move than its 1.64% median absolute reaction after the past five results.
Price around the results
Q4FY26 revenue growth translated into higher operating profit
Consolidated revenue rose 22.57% YoY to Rs 564.11 cr, while operating profit grew 23.27% to Rs 161.47 cr. Expenses grew slightly slower than revenue at 22.30%, which lifted operating margin by 0.16 percentage points to 28.62%. Sequentially, revenue increased 6.46% and operating profit rose 12.05%, with the margin improving 1.42 percentage points.
Higher tax rate diluted the pre-tax profit improvement
Profit before tax grew 30.93% YoY, helped by interest expense falling 11.72%, but depreciation increased 26.97%. The tax rate rose 7.51 percentage points to 34.80%, so net profit growth of 17.41% was well below pre-tax profit growth. Other income contributed 18.15% of pre-tax profit, making it a meaningful part of reported earnings quality.
Margin recovered from the Q1FY26 low and beat the healthcare peer median
Operating margin moved from 28.46% in Q4FY25 to 26.23% in Q1FY26, then recovered to 27.30% in Q2FY26, 27.20% in Q3FY26 and 28.62% in Q4FY26. This is a recovery rather than a continuing quarterly decline. The margin was 5.24 percentage points above the 23.38% median for 48 healthcare peers that had reported the same quarter.
Management linked the quarter to a wider facility network
Management said the company launched one facility per week in FY26 and entered 26 new cities, reaching 288 facilities across India and Africa by March 31, 2026. The company told investors it plans to add 60 facilities in FY27, split evenly between the two halves, after closing five primary facilities in FY26. It also reported 968 doctors and 2,189 paramedical staff at the year-end.
Initial market reaction was within the stock's usual range
The stock fell 0.36% on the first session after the results and underperformed its benchmark by 0.64 percentage points, despite trading at 2.52 times its normal volume. That was modest against the 1.64% median absolute move across the past five result reactions, which included two rises and three falls. The 15-session return after the latest results was -8.69%, a larger move than the immediate response.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹564 cr | ₹530 cr | +6.46% | +22.57% |
| Other income | ₹14 cr | ₹11 cr | +31.97% | +7.58% |
| Expenses | ₹403 cr | ₹386 cr | +4.38% | +22.30% |
| Operating profit | ₹161 cr | ₹144 cr | +12.05% | +23.27% |
| Operating margin (%) | 28.62% | 27.20% | — | — |
| Interest | ₹22 cr | ₹21 cr | +4.50% | -11.72% |
| Depreciation | ₹77 cr | ₹69 cr | +11.53% | +26.97% |
| Profit before tax | ₹77 cr | ₹65 cr | +18.31% | +30.93% |
| Tax | ₹27 cr | ₹21 cr | +26.17% | +66.94% |
| Net profit | ₹50 cr | ₹44 cr | +14.51% | +17.41% |
| EPS (₹) | ₹1.25 | ₹1.07 | +16.82% | +20.19% |
Operating margin of 28.62% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.36% | -0.64% |
| Next session | -0.29% | — |
| 5 sessions | +0.05% | +1.20% |
| 15 sessions | -8.69% | — |
| 30 sessions | -1.78% | — |
Volume on the results session was 2.52× 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
- The company operated 288 facilities across India and Africa as of March 31, 2026.
- The company had 968 doctors and 2,189 paramedical staff as of March 31, 2026.
Guidance & outlook
- The company plans to add 60 facilities in FY27, with 30 planned in each half of the year.
Expansion
- The company launched one new facility per week in FY26 and expanded into 26 new cities.
- The company added 148 greenfield facilities over the last four years, representing 5.7x growth.
- The FY27 expansion plan allocates 34 facilities to South, eight to West, seven to North and seven to East.
Competition
- The company describes itself as India's largest geographically diversified eye care services chain.
Problems & risks
- The company closed five primary facilities in FY26.
What to watch
- Progress against management's reported plan to add 60 facilities in FY27.
- Whether operating margin remains above 28.62% after its Q4FY26 recovery.
- Whether the tax rate moves down from 34.80% and reduces the gap between pre-tax profit and net profit growth.