DCW margin improves, but tax reversal cuts profit 70.01% sequentially
Revenue growth outpaced expense growth, but other income made up 50.78% of pre-tax profit and the tax line swung sharply from the prior quarter.
Filed 29 Oct 2026, 18:53 IST · after market close · DCW Ltd (DCW)
Key takeaways
- Standalone operating margin improved 0.56 percentage points sequentially as revenue grew 22.32%, faster than expenses at 21.58%.
- Net profit fell 70.01% sequentially because Q1FY27 included a Rs 34.19 cr tax credit, while Q2FY27 tax was Rs 3.66 cr.
- DCW's 7.16% operating margin was 7.47 percentage points below the 14.63% median for 41 reported commodities peers.
Price around the results
Revenue growth brought modest operating leverage
The standalone business grew revenue 22.32% sequentially, while expenses rose 21.58%, lifting operating margin by 0.56 percentage points to 7.16%. Operating profit therefore increased 32.72%, ahead of revenue growth. The results were filed after market close.
Tax reversal obscured the operating improvement
Pre-tax profit rose from Rs 0.36 cr in Q1FY27 to Rs 14.02 cr in Q2FY27, but net profit dropped 70.01% because the prior quarter carried negative tax of Rs 34.19 cr. Q2FY27 had a tax rate of 26.12%, compared with -9,579.55% in Q1FY27. Other income was 50.78% of Q2FY27 pre-tax profit, making reported profit quality an important consideration.
Margin remains below the commodities peer median
DCW's 7.16% operating margin was 7.47 percentage points below the 14.63% median among 41 commodities companies that had reported the same quarter. Sequentially, the margin moved up from 6.60%, reversing some of the pressure seen in the previous quarter. The next comparison will show whether this improvement extends beyond one quarter.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹663 cr | ₹542 cr | +22.32% |
| Other income | ₹7 cr | ₹6 cr | +26.02% |
| Expenses | ₹615 cr | ₹506 cr | +21.58% |
| Operating profit | ₹47 cr | ₹36 cr | +32.72% |
| Operating margin (%) | 7.16% | 6.60% | — |
| Interest | ₹14 cr | ₹15 cr | -8.11% |
| Depreciation | ₹27 cr | ₹26 cr | +2.63% |
| Profit before tax | ₹14 cr | ₹0 cr | +3794.44% |
| Tax | ₹4 cr | ₹-34 cr | — |
| Net profit | ₹10 cr | ₹35 cr | -70.01% |
| EPS (₹) | ₹0.35 | ₹1.17 | -70.09% |
Operating margin of 7.16% compares with a Commodities sector median of 14.63% across 41 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 7.16% in the next quarter.
- Whether other income remains close to 50.78% of pre-tax profit.
- Whether net profit improves from Rs 10.36 cr without a tax credit like the Rs 34.19 cr recorded in Q1FY27.