Avantel expands margin as revenue growth outpaces costs
Consolidated operating margin rose 7.59 percentage points year on year, while higher interest and depreciation limited the conversion into net profit.
Filed 26 Oct 2026, 14:46 IST · Avantel Ltd (AVANTEL)
Key takeaways
- Consolidated operating margin widened 7.59 percentage points year on year as revenue grew +34.28% while expenses rose +21.47%.
- Consolidated net profit increased +59.48% year on year to Rs 6.81 cr despite interest expense rising +118.25%.
- Avantel's 28.01% operating margin was 17.02 percentage points above the 10.99% median for 30 Industrials peers.
Price around the results
Revenue growth created operating leverage
Avantel's consolidated revenue grew +34.28% year on year, outpacing the +21.47% increase in expenses. That spread lifted operating profit by +84.19% and widened operating margin by 7.59 percentage points to 28.01%. The result points to better operating leverage rather than growth being absorbed by costs.
Higher interest and depreciation limited profit conversion
Interest expense rose +118.25% and depreciation increased +84.24% year on year, which kept pre-tax profit growth at +54.82%, below operating profit growth. The tax rate fell 2.07 percentage points to 29.29%, providing some support to net profit growth of +59.48%. Other income fell -67.03% and represented only 3.12% of pre-tax profit, so reported earnings were largely operational.
Operating margin remained well above Industrials peers
Avantel's 28.01% consolidated operating margin exceeded the 10.99% median among the 30 Industrials companies that had reported the quarter by 17.02 percentage points. Compared with Q2FY26, the margin moved up from 20.42%, while net profit rose from Rs 4.27 cr to Rs 6.81 cr. The year-on-year comparison shows a marked improvement in both operating efficiency and earnings.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | YoY |
|---|---|---|
| Revenue | ₹74 cr | +34.28% |
| Other income | ₹0 cr | -67.03% |
| Expenses | ₹54 cr | +21.47% |
| Operating profit | ₹21 cr | +84.19% |
| Operating margin (%) | 28.01% | — |
| Interest | ₹3 cr | +118.25% |
| Depreciation | ₹9 cr | +84.24% |
| Profit before tax | ₹10 cr | +54.82% |
| Tax | ₹3 cr | +44.62% |
| Net profit | ₹7 cr | +59.48% |
| EPS (₹) | ₹0.26 | +73.33% |
Operating margin of 28.01% compares with a Industrials sector median of 10.99% across 30 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 28.01% after its 7.59-percentage-point year-on-year expansion.
- Whether expense growth remains below the +34.28% year-on-year revenue growth rate.
- Whether interest expense growth moderates from +118.25% year on year while the tax rate stays near 29.29%.