Balkrishna Industries' profit falls 18.75% as margins narrow
Revenue rose 6.56% year on year, but faster cost growth, higher depreciation and negative other income reduced reported profit.
Filed 08 May 2026, 20:12 IST · after market close · Balkrishna Industries Ltd (BALKRISIND)
Key takeaways
- Consolidated net profit fell 18.75% year on year to Rs 299.46 cr as other income turned negative and the tax rate rose 1.28 percentage points.
- Revenue grew 6.56% year on year, but expenses grew faster at 7.20%, narrowing operating margin by 0.47 percentage points.
- The stock fell 6.43% in five sessions after the results, versus a 3.30% median absolute move across its last eight result reactions.
Price around the results
Revenue grew, but profit conversion weakened
Consolidated revenue rose 6.56% year on year to Rs 2,932.82 cr, while operating profit increased only 4.31% to Rs 639.96 cr. Expenses grew faster than revenue, at 7.20%, reducing operating margin by 0.47 percentage points to 21.82%. This left net profit down 18.75% at Rs 299.46 cr.
Cost growth and other income drove the earnings gap
Sequentially, revenue increased 7.16%, but expenses rose 9.51%, so operating margin fell 1.68 percentage points from Q3FY26. Depreciation also increased 11.57% year on year, while interest expense fell 26.79%, partly offsetting the pressure. Other income was negative at Rs -3.92 cr versus Rs 99.37 cr a year earlier, and the higher 25.31% tax rate further reduced profit conversion; other income contributed -0.98% of pre-tax profit.
Margin remains above peers despite the sequential decline
The 21.82% operating margin was 7.01 percentage points above the 14.81% median for 93 Consumer Discretionary peers that had reported the same quarter. The margin had recovered from 18.34% in Q1FY26 to 23.50% in Q3FY26, but declined in Q4FY26 both sequentially and year on year. The quarter therefore marked a reversal from the recent margin recovery rather than a new low.
The market reaction was weaker than its usual range
The stock fell 3.56% on the reaction day and was down 6.43% after five sessions, with relative performance of -4.25% against the benchmark over that period. Across the last eight result reactions, moves were evenly split between four rises and four falls, with a 3.30% median absolute move. The five-session decline was therefore larger than the stock's typical post-results move.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,933 cr | ₹2,737 cr | +7.16% | +6.56% |
| Other income | ₹-4 cr | ₹77 cr | — | — |
| Expenses | ₹2,293 cr | ₹2,094 cr | +9.51% | +7.20% |
| Operating profit | ₹640 cr | ₹643 cr | -0.48% | +4.31% |
| Operating margin (%) | 21.82% | 23.50% | — | — |
| Interest | ₹36 cr | ₹34 cr | +6.43% | -26.79% |
| Depreciation | ₹199 cr | ₹195 cr | +1.80% | +11.57% |
| Profit before tax | ₹401 cr | ₹491 cr | -18.35% | -17.36% |
| Tax | ₹101 cr | ₹109 cr | -6.82% | -12.97% |
| Net profit | ₹299 cr | ₹382 cr | -21.64% | -18.75% |
| EPS (₹) | ₹15.49 | ₹19.77 | -21.65% | -18.73% |
Operating margin of 21.82% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.56% | -2.07% |
| Next session | -6.71% | — |
| 5 sessions | -6.43% | -4.25% |
| 15 sessions | -4.96% | — |
| 30 sessions | -1.69% | — |
Volume on the results session was 2.25× its 20-day average.
What to watch
- Whether operating margin recovers from 21.82% after the 1.68-percentage-point sequential decline.
- Whether expenses grow slower than revenue after rising 9.51% sequentially versus 7.16% revenue growth.
- Whether other income returns to positive territory after Rs -3.92 cr and a -0.98% share of pre-tax profit.