Craftsman’s revenue surged, but faster cost growth cut margins again
Net profit growth was aided by a lower year-on-year tax rate, while other income contributed 9.88% of pre-tax profit.
Filed 28 Oct 2026, 13:13 IST · Craftsman Automation Ltd (CRAFTSMAN)
Key takeaways
- Consolidated revenue grew 47.14% year on year, but expenses grew faster at 50.23%, cutting operating margin by 1.78 percentage points.
- Net profit rose 68.59% year on year, helped by a tax rate that fell 2.05 percentage points to 25.45%.
- Operating margin fell 2.49 percentage points sequentially to 13.30%, its second straight quarterly decline from 16.10% in Q4FY26.
Price around the results
Revenue growth widened, but cost absorption weakened
Consolidated revenue grew 47.14% year on year and 21.12% sequentially, showing faster momentum than in the previous quarter. Expenses rose 50.23% year on year and 24.69% sequentially, so costs grew faster than revenue in both comparisons. That mismatch reduced operating margin by 1.78 percentage points year on year and 2.49 percentage points sequentially.
Lower tax rate supported profit conversion
Net profit increased 68.59% year on year, ahead of operating profit growth of 29.79%, because the tax rate fell 2.05 percentage points to 25.45%. Sequentially, net profit rose only 1.75% even as operating profit increased 2.08%, with the tax rate moving up 0.34 percentage points. Other income represented 9.88% of pre-tax profit, so reported profit also had a meaningful non-operating contribution.
Margin has now declined for two quarters
Operating margin rose through Q4FY26 to 16.10%, then fell to 15.79% in Q1FY27 and 13.30% in Q2FY27. The latest margin remains 0.88 percentage points above the 12.42% median for 74 Consumer Discretionary peers that have reported the same quarter. The sequential decline therefore marks a clear reversal in Craftsman’s recent margin direction, even though it remains above the sector median.
Prior result reactions have usually been modestly positive
After its previous eight results, the stock rose five times and fell three times, with a median absolute move of 3.40%. The recorded moves ranged from -1.44% to +11.09%, so the usual reaction has been positive but uneven. The current results were filed on 28 October 2026, and the market response is not yet part of this readout.
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 | ₹2,945 cr | ₹2,432 cr | +21.12% | +47.14% |
| Other income | ₹20 cr | ₹24 cr | -14.35% | +114.81% |
| Expenses | ₹2,553 cr | ₹2,048 cr | +24.69% | +50.23% |
| Operating profit | ₹392 cr | ₹384 cr | +2.08% | +29.79% |
| Operating margin (%) | 13.30% | 15.79% | — | — |
| Interest | ₹80 cr | ₹86 cr | -6.80% | +4.27% |
| Depreciation | ₹126 cr | ₹120 cr | +4.98% | +15.93% |
| Profit before tax | ₹205 cr | ₹201 cr | +2.21% | +63.94% |
| Tax | ₹52 cr | ₹50 cr | +3.59% | +51.67% |
| Net profit | ₹153 cr | ₹151 cr | +1.75% | +68.59% |
| EPS (₹) | ₹58.57 | ₹62.25 | -5.91% | +53.77% |
Operating margin of 13.30% compares with a Consumer Discretionary sector median of 12.42% across 74 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 13.30% after two consecutive quarterly declines.
- Whether expenses growth moves below the 21.12% sequential revenue growth rate.
- Whether other income remains near 9.88% of pre-tax profit and the tax rate stays close to 25.45%.