Gandhar reports 15.58% margin after capacity work and disruption recovery
The consolidated quarter included negative other income, while management cited stronger PIO volumes and restored Silvassa operations.
Filed 27 Oct 2026, 18:20 IST · after market close · Gandhar Oil Refinery (India) Ltd (GANDHAR)
Key takeaways
- Consolidated operating margin rose to 15.58% in Q2FY27 from 5.81% in Q4FY26, alongside the quarter's debottlenecking programme.
- Net profit of Rs 186.28 cr was not lifted by other income, which was negative Rs 18.31 cr, while the tax rate was 24.91%.
- Management said PIO half-year volumes grew 23% year on year, while lubricants volumes improved sequentially.
Price around the results
Capacity actions coincided with a sharp margin recovery
Gandhar's consolidated operating margin improved to 15.58% in Q2FY27 from 5.81% in Q4FY26, with operating profit rising from Rs 63.55 cr to Rs 287.68 cr. The company said it completed a debottlenecking programme during the quarter, while operations at Silvassa Unit No. 2 were restored in early August after the July flooding disruption. Management also said PIO half-year volumes grew 23% year on year, supported by transformer, power and rubber industry demand.
Profit quality was not dependent on other income
Other income was negative Rs 18.31 cr, so reported profit before tax did not receive a non-operating income lift. Interest was Rs 13.25 cr and depreciation was Rs 8.03 cr, while the tax rate was 24.91%. The quarter's net profit of Rs 186.28 cr therefore came alongside a cost and operating recovery rather than a boost from other income.
Margin matched the reported Energy peer median
At 15.58%, Gandhar's operating margin matched the median for the 8 Energy peers that had reported the same quarter. The company was sixth from the bottom on the supplied peer ranking. Against Q4FY26, the margin direction was sharply higher, although the available trend contains only one prior quarter.
Management outlined expansion across customers and geographies
Management said it plans to deepen wallet share with existing marquee customers, add consumer and healthcare accounts, and expand in Indonesia, Europe and the US. The company also said it plans to broaden contract manufacturing, co-develop bespoke formulations and use US FDA approval to scale regulated pharmaceutical grades. It said future growth would be funded internally on a debt-free base, while also flagging West Asia-related disruption to base oil availability, pricing and shipping logistics.
The filing came after the market close
Gandhar filed the consolidated results at 18:20 IST on 27 October 2026, after market close. The market's post-result response is therefore not covered in this note.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 |
|---|---|
| Revenue | ₹1,847 cr |
| Other income | ₹-18 cr |
| Expenses | ₹1,559 cr |
| Operating profit | ₹288 cr |
| Operating margin (%) | 15.58% |
| Interest | ₹13 cr |
| Depreciation | ₹8 cr |
| Profit before tax | ₹248 cr |
| Tax | ₹62 cr |
| Net profit | ₹186 cr |
| EPS (₹) | ₹17.87 |
Operating margin of 15.58% compares with a Energy sector median of 15.58% across 8 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- PIO half-year volumes grew 23% year on year, supported by transformer, power and rubber industry demand.
- Lubricants volumes improved sequentially during the quarter.
- Operations at Silvassa Unit No. 2 were restored in early August after the July disruption.
Guidance & outlook
- The company will focus on improving operational efficiency, deepening customer engagement, expanding geographically and progressing capacity-expansion plans.
- The company plans to expand wallet share with existing marquee customers and win new consumer and healthcare accounts.
- The company plans to increase penetration in existing markets and scale up in Indonesia, Europe and the US.
- The company plans to expand contract manufacturing, broaden its portfolio and co-develop bespoke formulations.
- The company says future growth will be funded internally on a debt-free base.
Expansion
- The company completed a debottlenecking programme during the quarter to strengthen operating capacity.
- Taloja is operating near full utilisation, with land available at all plants for the next phase of capacity expansion.
- The company plans to enter South Africa.
New initiatives
- The company plans to leverage US FDA approval to scale regulated pharmaceutical grades.
- The company plans to expand contract manufacturing of finished products.
- The company plans to co-develop bespoke formulations for key customers.
Problems & risks
- Geopolitical developments in West Asia affected base oil availability, pricing and shipping logistics.
- Heavy rainfall and flooding disrupted operations at the Silvassa Unit No. 2 in July.
- The company remains focused on addressing changing customer requirements and competitive dynamics in PHPO.
- The US market is being developed against a tariff backdrop.
What to watch
- Whether consolidated operating margin sustains 15.58% after rising from 5.81% in Q4FY26.
- Whether PIO half-year volume growth remains at 23% year on year.
- Whether other income moves back from negative Rs 18.31 cr and changes reported profit quality.