Operating profit rises, but negative other income crushes profit
A 3.06-point QoQ margin recovery was outweighed by negative other income and a 79.25% tax rate.
Filed 02 Nov 2026, 20:29 IST · after market close · Carborundum Universal Ltd (CARBORUNIV)
Key takeaways
- Consolidated operating margin expanded 3.06 percentage points QoQ to 12.53% as revenue grew +2.97% while expenses fell -0.51%.
- Net profit fell -83.79% YoY to Rs 12.04 cr as other income turned negative at Rs -55.22 cr and the tax rate rose 45.25 percentage points to 79.25%.
- Operating margin was 1.00 percentage point above the 11.53% median for 88 Industrials peers that had reported the quarter.
Price around the results
Negative other income erased the operating gain
Consolidated operating profit grew +17.73% YoY and +36.30% QoQ, but profit before tax fell -48.43% YoY and -51.33% QoQ. Other income was Rs -55.22 cr, compared with Rs 22.76 cr a year earlier and Rs 55.42 cr in Q1FY27; it equalled -95.17% of pre-tax profit. The tax rate also rose 45.25 percentage points YoY and 46.64 percentage points QoQ, leaving net profit down -83.79% YoY.
Costs supported the margin rebound
Year on year, revenue grew +13.17% while expenses grew +12.55%, allowing operating margin to improve by 0.48 percentage points. Sequentially, revenue rose +2.97% while expenses declined -0.51%, driving a 3.06 percentage-point margin expansion. Interest expense still increased +48.31% YoY and +13.28% QoQ, adding pressure below the operating line.
Margin recovered after two quarters of decline
Operating margin rose to 12.53% from 9.47% in Q1FY27, after falling from 12.17% in Q3FY26 to 10.31% in Q4FY26 and 9.47% in Q1FY27. The current margin was 1.00 percentage point above the 11.53% median among 88 Industrials peers that had reported the quarter.
No immediate market reaction after the filing
The consolidated results were filed after market close, so there was no same-day market reaction to report. Across the last eight results, the stock rose after two and fell after six, with a median absolute move of 2.19%.
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 | ₹1,469 cr | ₹1,427 cr | +2.97% | +13.17% |
| Other income | ₹-55 cr | ₹55 cr | — | — |
| Expenses | ₹1,285 cr | ₹1,292 cr | -0.51% | +12.55% |
| Operating profit | ₹184 cr | ₹135 cr | +36.30% | +17.73% |
| Operating margin (%) | 12.53% | 9.47% | — | — |
| Interest | ₹7 cr | ₹6 cr | +13.28% | +48.31% |
| Depreciation | ₹64 cr | ₹66 cr | -1.80% | +3.37% |
| Profit before tax | ₹58 cr | ₹119 cr | -51.33% | -48.43% |
| Tax | ₹46 cr | ₹39 cr | +18.29% | +20.21% |
| Net profit | ₹12 cr | ₹80 cr | -85.01% | -83.79% |
| EPS (₹) | ₹0.66 | ₹4.04 | -83.66% | -83.25% |
Operating margin of 12.53% compares with a Industrials sector median of 11.53% across 88 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 12.53% after its 3.06 percentage-point QoQ rebound.
- Whether the tax rate moves down from 79.25% and improves the conversion of pre-tax profit into net profit.
- Whether other income remains negative after Rs -55.22 cr in Q2FY27.