Eicher Motors grows profit, but operating margin slips sequentially
Annual margin improved as revenue grew faster than costs, while higher other income supported pre-tax profit and the tax rate rose.
Filed 22 May 2026, 16:51 IST · after market close · Eicher Motors Ltd (EICHERMOT)
Key takeaways
- Consolidated revenue grew 16.01% year on year, while operating margin expanded 0.90 percentage points to 24.90%.
- Quarter-on-quarter revenue fell 0.56% and costs rose 0.20%, narrowing operating margin by 0.56 percentage points.
- Other income contributed 34.85% of pre-tax profit, while a 3.14 percentage-point rise in the tax rate limited year-on-year net-profit growth to 11.58%.
Price around the results
Annual growth outpaced costs, but momentum eased
Eicher Motors reported consolidated revenue growth of 16.01% year on year in Q4FY26, with expenses increasing 14.64%. That operating leverage lifted margin by 0.90 percentage points. Sequentially, revenue declined 0.56% while expenses rose 0.20%, causing operating profit to fall 2.77% and margin to narrow by 0.56 percentage points.
Other income supported profit as tax and interest costs rose
Other income rose 7.43% year on year and accounted for 34.85% of pre-tax profit, making it a significant contributor to reported earnings. Pre-tax profit increased 16.04%, but net profit grew only 11.58% as the tax rate rose 3.14 percentage points and interest expense increased 29.99%. Sequentially, other income rose 45.22%, helping pre-tax profit increase 8.01% even as operating profit declined.
Margin has recovered from Q1, despite the Q4 pullback
Operating margin rose from 23.86% in Q1FY26 to 24.50% in Q2FY26 and 25.46% in Q3FY26 before easing to 24.90% in Q4FY26. The quarter therefore ended the recent improvement, rather than extending it. Even after the sequential decline, Eicher Motors' margin was 10.09 percentage points above the 14.81% median for the 93 Consumer Discretionary peers that had reported.
The initial share reaction was broadly in line with its history
The stock gained 6.19% on the first session after the results, with a 3.66% opening gap and 2.98 times its usual volume. Across the past eight result reactions, the stock rose five times and fell three times, with a median absolute move of 5.54%. The latest move was therefore somewhat larger than its typical result-day move, but not an unusual direction for the stock.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,080 cr | ₹6,114 cr | -0.56% | +16.01% |
| Other income | ₹675 cr | ₹465 cr | +45.22% | +7.43% |
| Expenses | ₹4,566 cr | ₹4,557 cr | +0.20% | +14.64% |
| Operating profit | ₹1,514 cr | ₹1,557 cr | -2.77% | +20.35% |
| Operating margin (%) | 24.90% | 25.46% | — | — |
| Interest | ₹20 cr | ₹17 cr | +16.97% | +29.99% |
| Depreciation | ₹232 cr | ₹211 cr | +9.73% | +15.04% |
| Profit before tax | ₹1,937 cr | ₹1,793 cr | +8.01% | +16.04% |
| Tax | ₹417 cr | ₹373 cr | +11.90% | +35.80% |
| Net profit | ₹1,520 cr | ₹1,421 cr | +6.99% | +11.58% |
| EPS (₹) | ₹55.41 | ₹51.79 | +6.99% | +11.51% |
Operating margin of 24.90% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +6.19% | +4.88% |
| Next session | +5.65% | — |
| 5 sessions | +2.29% | +3.29% |
| 15 sessions | +8.29% | — |
| 30 sessions | +6.26% | — |
Volume on the results session was 2.98× its 20-day average.
What to watch
- Whether operating margin holds above 24.90% after the Q4FY26 sequential decline.
- Whether other income remains below or above its 34.85% share of pre-tax profit.
- Whether the tax rate moves back from 21.53% after rising 3.14 percentage points year on year.