Margin rebounds sharply, but Deepak Nitrite stock falls 4.27%
Operating margin rose 7.05 percentage points QoQ as expenses fell 1.12%, though higher interest and depreciation limited pre-tax profit growth to 8.12% YoY.
Filed 15 May 2026, 18:28 IST · after market close · Deepak Nitrite Ltd (DEEPAKNTR)
Key takeaways
- Consolidated operating margin rose +7.05 percentage points QoQ to 17.73% as revenue grew +7.36% while expenses fell -1.12%.
- Despite a -2.72% YoY revenue decline, faster expense reduction of -6.38% lifted operating profit +18.79%, while net profit rose +8.56%.
- The stock fell -4.27% on the reaction day, versus a 2.35% median absolute move after the last eight results.
Price around the results
Q4 margin rebound came from operating leverage
Deepak Nitrite’s consolidated revenue increased +7.36% QoQ, while expenses declined -1.12%, lifting operating margin by 7.05 percentage points to 17.73%. Year on year, revenue fell -2.72%, but expenses fell faster at -6.38%, taking operating margin up 3.21 percentage points. Other income contributed only 2.28% of pre-tax profit, so the improvement was primarily operational.
Higher finance and depreciation costs contained profit growth
Operating profit rose +18.79% YoY, but interest expense more than doubled, increasing +102.46%, while depreciation rose +22.13%. As a result, pre-tax profit grew only +8.12% and net profit increased +8.56%. The tax rate declined just 0.29 percentage points YoY, providing limited support to earnings.
Margin moved above Q3 but remained below the peer median
The 17.73% operating margin was a sharp recovery from 10.68% in Q3FY26, after margins had remained near 10%-11% in Q1FY26 through Q3FY26. It was also 1.04 percentage points below the 18.77% median for 51 reported Commodities-sector peers. The quarter therefore marks a clear sequential improvement, though not sector-leading profitability.
Market reaction was weaker than Deepak Nitrite’s usual result-day move
The stock declined -4.27% on the reaction day and was down -4.41% after five sessions. That was weaker than the 2.35% median absolute move across the last eight result reactions, during which the stock rose three times and fell five times.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,120 cr | ₹1,975 cr | +7.36% | -2.72% |
| Other income | ₹7 cr | ₹-4 cr | — | -69.90% |
| Expenses | ₹1,744 cr | ₹1,764 cr | -1.12% | -6.38% |
| Operating profit | ₹376 cr | ₹211 cr | +78.28% | +18.79% |
| Operating margin (%) | 17.73% | 10.68% | — | — |
| Interest | ₹19 cr | ₹11 cr | +71.29% | +102.46% |
| Depreciation | ₹63 cr | ₹58 cr | +8.76% | +22.13% |
| Profit before tax | ₹301 cr | ₹138 cr | +118.42% | +8.12% |
| Tax | ₹82 cr | ₹38 cr | +113.68% | +6.97% |
| Net profit | ₹220 cr | ₹100 cr | +120.23% | +8.56% |
| EPS (₹) | ₹16.11 | ₹7.32 | +120.08% | +8.56% |
Operating margin of 17.73% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.27% | -4.29% |
| Next session | -1.13% | — |
| 5 sessions | -4.41% | -6.05% |
| 15 sessions | -8.11% | — |
| 30 sessions | -15.20% | — |
Volume on the results session was 1.18× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 17.73%.
- Whether revenue reverses the -2.72% YoY decline seen in Q4FY26.
- Whether interest expense continues to rise after the +102.46% YoY increase.