Balkrishna Industries margin falls for third straight quarter
Q2FY27 revenue was nearly flat sequentially, while faster cost growth and an 83.52% rise in interest expense cut operating margin by 3.29 percentage points.
Filed 04 Nov 2026, 18:59 IST · after market close · Balkrishna Industries Ltd (BALKRISIND)
Key takeaways
- Consolidated operating margin fell 3.29 percentage points sequentially to 18.25% as expenses grew 4.70% while revenue grew 0.48%.
- Revenue rose 45.05% year on year, but expenses grew faster at 50.79%, leaving operating profit growth at 23.92%.
- Net profit increased only 7.11% year on year as interest expense more than doubled and other income fell 38.88%.
Price around the results
Revenue growth stalled sequentially
Balkrishna Industries reported consolidated revenue growth of 45.05% year on year in Q2FY27, but sequential growth was only 0.48%. The sharper annual increase did not flow through to operating profit because expenses rose 50.79%, compared with revenue growth of 45.05%. As a result, operating profit grew 23.92% year on year and fell 14.90% sequentially.
Higher costs and interest diluted earnings
Expenses grew 4.70% sequentially against 0.48% revenue growth, narrowing operating margin by 3.29 percentage points. Interest expense increased 83.52% sequentially and 107.38% year on year, while depreciation rose 6.76% sequentially. Other income contributed 11.18% of pre-tax profit, but it fell 56.34% sequentially and 38.88% year on year, limiting support to reported earnings.
Margin is down for three straight quarters
Operating margin has declined from 23.50% in Q3FY26 to 21.82% in Q4FY26, 21.54% in Q1FY27 and 18.25% in Q2FY27. The current margin was still 6.34 percentage points above the 11.91% median for the 223 Consumer Discretionary peers that had reported the quarter. The year-on-year tax rate increase of 1.31 percentage points also provided no earnings lift, while the sequential tax rate change was a modest decline of 0.15 percentage points.
Results were filed after market close
The results were filed after market close, so there was no immediate market reaction to assess. In the eight recent result reactions, the stock rose four times and fell four times, with a median absolute move of 3.30%, indicating a mixed historical response rather than a consistent direction.
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 | ₹3,472 cr | ₹3,455 cr | +0.48% | +45.05% |
| Other income | ₹44 cr | ₹100 cr | -56.34% | -38.88% |
| Expenses | ₹2,838 cr | ₹2,711 cr | +4.70% | +50.79% |
| Operating profit | ₹634 cr | ₹744 cr | -14.90% | +23.92% |
| Operating margin (%) | 18.25% | 21.54% | — | — |
| Interest | ₹67 cr | ₹37 cr | +83.52% | +107.38% |
| Depreciation | ₹220 cr | ₹206 cr | +6.76% | +14.34% |
| Profit before tax | ₹389 cr | ₹601 cr | -35.22% | +8.97% |
| Tax | ₹97 cr | ₹150 cr | -35.63% | +15.02% |
| Net profit | ₹293 cr | ₹451 cr | -35.08% | +7.11% |
| EPS (₹) | ₹15.13 | ₹23.32 | -35.12% | +7.08% |
Operating margin of 18.25% compares with a Consumer Discretionary sector median of 11.91% across 223 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 18.25% after three consecutive quarterly declines.
- Whether expenses grow more slowly than revenue after rising 4.70% sequentially against revenue growth of 0.48%.
- Whether interest expense moderates after increasing 83.52% sequentially.