AVG's margin slips as expenses outpace revenue growth
Consolidated net profit still rose 39.57% year on year, but higher tax and other income remained important to the result.
Filed 13 Nov 2026, 19:16 IST · after market close · AVG (AVG)
Key takeaways
- Consolidated operating margin narrowed 3.14 percentage points year on year to 13.83% as expenses grew 10.01% against 6.01% revenue growth.
- Net profit rose 39.57% year on year despite the margin decline, helped by 18.49% lower interest and 40.80% lower depreciation.
- Other income contributed 25.81% of profit before tax, while the tax rate rose 7.51 percentage points year on year to 30.18%.
Revenue grew, but operating profit fell year on year
AVG's consolidated revenue increased 6.01% year on year in Q2FY27, while operating profit declined 13.60%. Expenses grew 10.01%, outpacing revenue and pushing operating margin down 3.14 percentage points to 13.83%. Sequentially, revenue rose 14.45% and operating profit increased 7.65%, but expenses grew faster at 15.62%, narrowing margin by 0.87 percentage points.
Lower finance and depreciation costs supported reported profit
Profit before tax rose 54.49% year on year even as operating profit declined, helped by an 18.49% fall in interest and a 40.80% fall in depreciation. Other income was 25.81% of profit before tax, so a meaningful part of pre-tax profit came from outside operations. The tax rate increased 7.51 percentage points year on year and 4.28 percentage points sequentially, limiting the conversion of pre-tax gains into net profit.
Margin remains below the recent peak
Operating margin has moved from 19.46% in Q3FY26 to 8.62% in Q4FY26, recovered to 14.70% in Q1FY27, and eased to 13.83% in Q2FY27. The latest quarter therefore marks a sequential decline after the Q1 recovery, rather than a continuation of the sharp Q4 compression. Net profit nevertheless increased 9.75% sequentially, as lower interest partly offset the higher tax rate and depreciation.
Results were filed after market close
The consolidated Q2FY27 results were filed after market close on 13 November 2026. No post-results share-price reaction is covered here because the filing was made after the market close.
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 | YoY |
|---|---|---|---|---|
| Revenue | ₹152 cr | ₹132 cr | +14.45% | +6.01% |
| Other income | ₹3 cr | ₹2 cr | +58.79% | +31.66% |
| Expenses | ₹131 cr | ₹113 cr | +15.62% | +10.01% |
| Operating profit | ₹21 cr | ₹19 cr | +7.65% | -13.60% |
| Operating margin (%) | 13.83% | 14.70% | — | — |
| Interest | ₹6 cr | ₹7 cr | -2.70% | -18.49% |
| Depreciation | ₹7 cr | ₹6 cr | +20.66% | -40.80% |
| Profit before tax | ₹10 cr | ₹9 cr | +16.53% | +54.49% |
| Tax | ₹3 cr | ₹2 cr | +35.40% | +105.37% |
| Net profit | ₹7 cr | ₹6 cr | +9.75% | +39.57% |
| EPS (₹) | ₹3.80 | ₹4.06 | -6.40% | +12.76% |
What to watch
- Whether operating margin recovers from 13.83% after the 0.87-percentage-point sequential decline.
- Whether expenses grow slower than revenue after rising 10.01% year on year against 6.01% revenue growth.
- Whether other income's contribution to profit before tax falls from 25.81%.