Carborundum's profit rises 33%, but operating margin slips again
Revenue grew 17.03% YoY, but costs grew faster; other income contributed 46.49% of pre-tax profit.
Filed 07 Aug 2026, 14:00 IST · Carborundum Universal Ltd (CARBORUNIV)
Key takeaways
- Consolidated net profit rose 33.04% YoY to Rs 80.34 cr, helped by other income contributing 46.49% of pre-tax profit.
- Operating margin narrowed for the second straight quarter to 9.47% as expenses grew 17.65% YoY against 17.03% revenue growth.
- Carborundum's operating margin was 5.03 percentage points below the 14.50% median of 82 Industrials peers that had reported.
Price around the results
Revenue growth lifted profit, but quality was mixed
Carborundum Universal reported consolidated revenue growth of 17.03% YoY, while operating profit increased 11.42%. Net profit grew faster at 33.04%, partly because other income more than doubled YoY to Rs 55.42 cr. Other income accounted for 46.49% of pre-tax profit, making it a material contributor to reported earnings.
Higher costs narrowed the operating margin
Expenses grew 17.65% YoY, faster than revenue, so operating margin narrowed by 0.48 percentage points. Interest expense also rose 66.19% YoY, adding pressure below the operating line. The tax rate increased by 2.97 percentage points, limiting the conversion of pre-tax profit into net profit.
Margin has fallen for two consecutive quarters
Sequentially, revenue grew 2.02% but expenses grew 2.98%, reducing operating profit 6.29% and narrowing margin by 0.84 percentage points. Operating margin has now declined from 12.17% in Q3FY26 to 10.31% in Q4FY26 and 9.47% in Q1FY27. The quarter's margin was 5.03 percentage points below the 14.50% median for 82 reported Industrials peers.
Past result reactions have usually been negative
Across the eight prior result reactions, the stock fell seven times and rose once. The median absolute move was 1.99%, providing a generally negative and modest historical reaction pattern against which this quarter's market response can be read.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,427 cr | ₹1,398 cr | +2.02% | +17.03% |
| Other income | ₹55 cr | ₹-103 cr | — | +105.56% |
| Expenses | ₹1,292 cr | ₹1,254 cr | +2.98% | +17.65% |
| Operating profit | ₹135 cr | ₹144 cr | -6.29% | +11.42% |
| Operating margin (%) | 9.47% | 10.31% | — | — |
| Interest | ₹6 cr | ₹6 cr | -7.20% | +66.19% |
| Depreciation | ₹66 cr | ₹65 cr | +1.52% | +11.24% |
| Profit before tax | ₹119 cr | ₹-30 cr | — | +38.89% |
| Tax | ₹39 cr | ₹10 cr | +281.08% | +52.79% |
| Net profit | ₹80 cr | ₹-40 cr | — | +33.04% |
| EPS (₹) | ₹4.04 | ₹-0.93 | — | +23.17% |
Operating margin of 9.47% compares with a Industrials sector median of 14.50% across 82 peers that have reported Q1FY27.
What to watch
- Whether operating margin recovers from 9.47% after two sequential declines.
- Whether expenses grow slower than revenue after rising 17.65% YoY against 17.03% revenue growth.
- Whether other income's contribution falls from 46.49% of pre-tax profit.