BDL margin drops as costs outpace 45.08% revenue growth
Standalone net profit rose 54.46% QoQ, but other income supplied 67.87% of pre-tax profit and YoY profit fell 15.01%.
Filed 12 Nov 2026, 13:54 IST · Bharat Dynamics Ltd (BDL)
Key takeaways
- Standalone revenue rose 45.08% YoY, but expenses grew 62.90%, cutting operating margin by 10.28 percentage points.
- Other income contributed 67.87% of pre-tax profit, making the Rs 183.48 cr net profit less operating-led.
- BDL shares fell 4.08% after the results, in line with the stock's usual negative direction but below its 6.05% median move.
Price around the results
Revenue momentum did not translate into operating profit
BDL's standalone revenue rose 45.08% YoY and 190.81% QoQ, but operating profit fell 46.09% YoY as costs absorbed the growth. Net profit still increased 54.46% QoQ, helped by the much larger revenue base, but declined 15.01% YoY. EPS fell 14.94% YoY to Rs 5.01.
Expense growth reversed the recent margin improvement
Expenses grew 62.90% YoY and 219.54% QoQ, faster than revenue in both comparisons, narrowing operating margin by 10.28 percentage points YoY and 8.45 percentage points QoQ. The 6.07% margin reverses the improvement from 4.59% in Q3FY26 to 14.52% in Q1FY27. The QoQ tax-rate decline of 2.82 percentage points supported profit conversion, while interest expense rose 37.50% from Q1FY27.
Other income supplied most of pre-tax profit
Other income accounted for 67.87% of pre-tax profit, so reported earnings were substantially supported outside operations. The tax rate was 25.46%, down 2.82 percentage points QoQ but up 0.52 percentage points YoY, making the lower tax rate a QoQ benefit rather than a YoY explanation for the profit decline.
Margin lagged Industrials peers as shares fell less than usual
BDL's 6.07% operating margin was 5.44 percentage points below the 11.51% median for the 230 Industrials peers that had reported, placing it 36th from the bottom. Shares fell 4.08% on the results day, with volume at 5.42 times normal. The decline was smaller than the stock's 6.05% median absolute move after its last eight results, although six of those eight reactions were negative.
Q2FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,664 cr | ₹572 cr | +190.81% | +45.08% |
| Other income | ₹167 cr | ₹103 cr | +61.51% | +38.57% |
| Expenses | ₹1,563 cr | ₹489 cr | +219.54% | +62.90% |
| Operating profit | ₹101 cr | ₹83 cr | +21.67% | -46.09% |
| Operating margin (%) | 6.07% | 14.52% | — | — |
| Interest | ₹1 cr | ₹1 cr | +37.50% | -34.81% |
| Depreciation | ₹21 cr | ₹20 cr | +4.25% | +10.41% |
| Profit before tax | ₹246 cr | ₹166 cr | +48.62% | -14.41% |
| Tax | ₹63 cr | ₹47 cr | +33.80% | -12.63% |
| Net profit | ₹183 cr | ₹119 cr | +54.46% | -15.01% |
| EPS (₹) | ₹5.01 | ₹3.24 | +54.63% | -14.94% |
Operating margin of 6.07% compares with a Industrials sector median of 11.51% across 230 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.08% | -4.26% |
Volume on the results session was 5.42× its 20-day average.
What to watch
- Whether operating margin recovers from 6.07% after the 8.45 percentage-point QoQ decline.
- Whether expenses continue to grow faster than revenue after the 219.54% QoQ increase versus 190.81% revenue growth.
- Whether other income remains below or above its 67.87% share of pre-tax profit.