Cemindia’s Q1 margin slips after Q4 peak as tax rise limits profit growth
Operating profit grew faster than revenue YoY, but a higher tax rate restricted net-profit growth to 2.64%; sequentially, weaker revenue and other income reduced profit.
Filed 28 Jul 2026, 14:44 IST · Cemindia Projects Ltd (CEMPRO)
Key takeaways
- Consolidated operating profit rose 17.96% YoY as revenue grew 7.02% and expenses grew 5.92%.
- Net profit increased only 2.64% YoY as the tax rate rose 10.7 percentage points to 26.79%.
- Operating margin fell 1.94 percentage points QoQ to 10.09%, versus a 14.36% median for 19 Industrials peers.
Price around the results
Operating profit improved, but tax absorbed the gain
Cemindia Projects reported consolidated revenue growth of 7.02% YoY, while operating profit grew 17.96% as expenses increased 5.92%. Profit before tax rose 17.64%, but net profit grew only 2.64% because the tax rate increased 10.7 percentage points to 26.79%. Other income contributed 5.42% of pre-tax profit, so it was not the main driver of earnings.
Sequential margin reversal followed Q4’s peak
Revenue fell 8.49% QoQ, while expenses declined 6.48%, meaning costs fell more slowly than revenue and operating margin narrowed 1.94 percentage points. Other income also dropped 88.7% QoQ, while interest expense declined 18.17%; the combination left profit before tax down 45.08%. The current 10.09% operating margin is above Q1FY26’s 9.16%, but below Q4FY26’s 12.03%.
Margin remains below the reported Industrials peer median
Operating margin rose 0.93 percentage points YoY, but the quarter interrupted the improvement seen from 9.35% in Q2FY26 to 9.58% in Q3FY26 and 12.03% in Q4FY26. Among 19 Industrials companies that had reported, Cemindia’s 10.09% margin was 4.27 percentage points below the 14.36% median and ranked sixth from the bottom. This makes the sequential margin loss more significant than the year-on-year improvement.
Management points to order-book visibility and capability expansion
Management said its diversified order book provides medium-term revenue visibility. The company told analysts that its metro, airport and highway expertise should create opportunities as urbanisation rises to 50% by 2047. Management said it is expanding data-centre capabilities in response to AI- and digital-growth-driven demand, while its presentation highlighted indigenous equipment, digital project-control tools and shared resources as ways to improve execution and margins.
Past results have produced a mixed share-price response
After its last eight results, the stock rose three times and fell five times, with a median absolute move of 4.39%. That history points to a generally negative but variable reaction pattern, rather than a consistent direction after results.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,721 cr | ₹2,973 cr | -8.49% | +7.02% |
| Other income | ₹10 cr | ₹92 cr | -88.70% | -51.67% |
| Expenses | ₹2,446 cr | ₹2,616 cr | -6.48% | +5.92% |
| Operating profit | ₹275 cr | ₹358 cr | -23.22% | +17.96% |
| Operating margin (%) | 10.09% | 12.03% | — | — |
| Interest | ₹50 cr | ₹61 cr | -18.17% | +0.26% |
| Depreciation | ₹43 cr | ₹39 cr | +10.50% | +4.09% |
| Profit before tax | ₹192 cr | ₹350 cr | -45.08% | +17.64% |
| Tax | ₹52 cr | ₹108 cr | -52.31% | +95.90% |
| Net profit | ₹141 cr | ₹242 cr | -41.85% | +2.64% |
| EPS (₹) | ₹8.20 | ₹14.10 | -41.84% | +2.63% |
Operating margin of 10.09% compares with a Industrials sector median of 14.36% across 19 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company says its strong diversified order book provides medium-term revenue visibility.
- The company says urbanization rising to 50% by 2047 will create opportunities through its metro, airport and highway expertise.
Expansion
- The company is expanding its capabilities in data centers in response to AI- and digital-growth-driven demand.
New initiatives
- The company says its indigenous equipment fleet supports large-scale complex projects.
- The company uses various tools and software to enhance efficiency, transparency and project control.
- The company plans to use shared resources, financial strength and vendor networks to achieve better costs and margins.
What to watch
- Whether operating margin recovers from 10.09% after the 1.94-percentage-point QoQ decline.
- Whether revenue reverses the 8.49% QoQ fall without expenses again growing faster than revenue.
- Whether the tax rate moves down from 26.79% after rising 10.7 percentage points YoY.