Revenue rose 21%, but tax and other income kept profit nearly flat
The consolidated operating margin improved year on year but slipped sequentially as expenses declined more slowly than revenue.
Filed 07 May 2026, 14:09 IST · Escorts Kubota Ltd (ESCORTS)
Key takeaways
- Consolidated revenue grew 21.40% year on year as expenses rose 19.94%, lifting operating margin by 1.06 percentage points.
- Net profit increased only 0.66% as the tax rate rose 2.45 percentage points and other income contributed 28.45% of pre-tax profit.
- The stock fell 9.58% five sessions after the results, against a 3.13% median absolute move across its last eight post-results reactions.
Price around the results
Year-on-year operating improvement, sequential margin setback
Escorts Kubota’s consolidated revenue grew 21.40% year on year, while expenses rose 19.94%, allowing operating margin to expand by 1.06 percentage points. Sequentially, revenue fell 9.52% and expenses fell 9.07%, so costs declined more slowly and margin narrowed by 0.43 percentage points. The 12.82% margin was 2.84 percentage points below the 15.66% median for 71 Industrials peers that had reported the quarter.
Higher tax rate diluted the operating profit gain
Operating profit rose 32.35% year on year, but profit before tax grew 21.85% and net profit only 0.66%. The tax rate increased by 2.45 percentage points, while interest expense rose 7.39%, limiting the conversion of operating gains into net profit. Other income accounted for 28.45% of pre-tax profit, making reported earnings less dependent on operating profit alone.
Q4 broke a three-quarter margin climb
Operating margin had risen from 11.76% in Q4FY25 to 13.25% in Q3FY26 before slipping to 12.82% in Q4FY26. This makes the sequential decline a break in the improvement seen across the previous three quarters, even though the margin remained above the year-ago level.
Initial gain reversed into an unusually weak reaction
The stock rose 0.87% on the results date, but fell 5.14% after one session and 9.58% after five sessions. The five-session decline was larger than the 3.13% median absolute move across the last eight post-results reactions, of which five were down and three were up. The decline reached 13.79% after 15 sessions and 14.95% after 30 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,968 cr | ₹3,280 cr | -9.52% | +21.40% |
| Other income | ₹122 cr | ₹102 cr | +19.39% | -6.80% |
| Expenses | ₹2,588 cr | ₹2,846 cr | -9.07% | +19.94% |
| Operating profit | ₹381 cr | ₹435 cr | -12.46% | +32.35% |
| Operating margin (%) | 12.82% | 13.25% | — | — |
| Interest | ₹6 cr | ₹6 cr | -13.21% | +7.39% |
| Depreciation | ₹69 cr | ₹64 cr | +7.42% | +11.42% |
| Profit before tax | ₹428 cr | ₹466 cr | -8.23% | +21.85% |
| Tax | ₹107 cr | ₹108 cr | -0.50% | +35.02% |
| Net profit | ₹321 cr | ₹358 cr | -10.55% | +0.66% |
| EPS (₹) | ₹29.13 | ₹32.57 | -10.56% | +0.59% |
Operating margin of 12.82% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.87% | +0.89% |
| Next session | -5.14% | — |
| 5 sessions | -9.58% | -6.95% |
| 15 sessions | -13.79% | — |
| 30 sessions | -14.95% | — |
Volume on the results session was 5.26× its 20-day average.
What to watch
- Whether operating margin rebuilds from 12.82% after the 0.43-percentage-point sequential decline.
- Whether the tax rate moves below the current 25.05% after rising 2.45 percentage points year on year.
- Whether other income remains close to its 28.45% share of pre-tax profit.