ARCIL's operating margin jumps 25.58 points as expenses halve sequentially
Lower expenses, reduced interest costs and a sharply lower tax rate drove the consolidated profit surge in Q2FY27.
Filed 29 Oct 2026, 18:48 IST · after market close · Asset Reconstruction Company (India) Ltd (ARCIL)
Key takeaways
- Consolidated operating profit rose 70.79% sequentially as revenue grew 17.79% while expenses fell 52.01%.
- Operating margin widened 25.58 percentage points to 82.42%, 22.89 points above the 59.53% median for 58 reported financial-services peers.
- Net profit increased 187.47% to Rs 157.82 cr, helped by a 22.85-percentage-point fall in the tax rate to 24.47%.
Price around the results
Operating profit rebounded sharply in Q2FY27
ARCIL's consolidated revenue grew 17.79% sequentially to Rs 276.5 cr, while operating profit rose 70.79% to Rs 227.88 cr. The margin recovery was substantial: operating margin increased from 56.84% in Q1FY27 to 82.42% in Q2FY27.
Lower costs led the margin recovery
Expenses fell 52.01% sequentially even as revenue increased 17.79%, producing a 25.58-percentage-point expansion in operating margin. Interest costs also declined 29.05% to Rs 17.73 cr. Other income was negative at Rs 0.37 cr and represented -0.18% of pre-tax profit, so it did not materially support earnings.
Profit growth was amplified by the tax-rate drop
Pre-tax profit increased 100.5% sequentially, but net profit rose 187.47% to Rs 157.82 cr because the tax rate fell 22.85 percentage points to 24.47%. The lower tax rate therefore amplified the conversion of pre-tax profit into net profit.
Margin stands above the reported peer median
ARCIL's 82.42% operating margin was 22.89 percentage points above the 59.53% median among 58 Financial Services peers that had reported the quarter. The results were filed after market close, so there was no immediate market reaction to assess.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹277 cr | ₹235 cr | +17.79% |
| Other income | ₹-0 cr | ₹-3 cr | +89.18% |
| Expenses | ₹49 cr | ₹101 cr | -52.01% |
| Operating profit | ₹228 cr | ₹133 cr | +70.79% |
| Operating margin (%) | 82.42% | 56.84% | — |
| Interest | ₹18 cr | ₹25 cr | -29.05% |
| Depreciation | ₹1 cr | ₹1 cr | +3.70% |
| Profit before tax | ₹209 cr | ₹104 cr | +100.50% |
| Tax | ₹51 cr | ₹49 cr | +3.67% |
| Net profit | ₹158 cr | ₹55 cr | +187.47% |
| EPS (₹) | ₹4.74 | ₹2.74 | +72.99% |
Operating margin of 82.42% compares with a Financial Services sector median of 59.53% across 58 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 82.42% after the Q2FY27 rebound.
- Whether expenses remain below Rs 48.62 cr after the sequential decline.
- Whether the tax rate stays below 24.47% in the next reported quarter.