Garware Technical Fibres sees second straight quarter of margin decline
Revenue fell 4.09% sequentially, while slower cost reduction pushed operating margin down 1.39 percentage points to 17.29%.
Filed 29 Oct 2026, 16:03 IST · after market close · Garware Technical Fibres Ltd (GARFIBRES)
Key takeaways
- Consolidated operating margin fell 1.39 percentage points sequentially to 17.29% as expenses declined 2.46% against a 4.09% fall in revenue.
- Consolidated net profit fell 9.35% QoQ to Rs 58.56 cr, cushioned by a 2.19 percentage-point decline in the tax rate.
- The stock rose 0.66% on the reaction day after opening 4.42% higher, with trading volume at 8.35 times normal.
Price around the results
Q2 earnings slowed after Q1
Consolidated revenue fell 4.09% QoQ, but operating profit declined 11.20%, showing that earnings weakened faster than sales. Net profit fell 9.35% to Rs 58.56 cr, while EPS declined 8.54% to Rs 6.00. Profit before tax fell 11.92%, a sharper decline than net profit because the tax rate eased.
Costs drove the margin compression
Expenses declined 2.46%, slower than the 4.09% fall in revenue, so operating margin narrowed by 1.39 percentage points. Interest expense fell 10.51%, but depreciation rose 5.36%, limiting the benefit below operating profit. Other income contributed 11.78% of pre-tax profit, making reported earnings partly dependent on non-operating income.
Margin remains above peers but has fallen for two quarters
Operating margin has declined from 22.57% in Q4FY26 to 18.68% in Q1FY27 and 17.29% in Q2FY27, marking a second consecutive quarterly contraction. Even after the decline, the margin was 4.20 percentage points above the 13.09% median among 129 Consumer Discretionary peers that had reported.
The initial market response was positive but faded from the open
The stock opened 4.42% higher on 30 October and ended the reaction session up 0.66%, indicating that much of the initial gap was given back during the session. Volume was 8.35 times normal, showing unusually heavy trading around the results.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹463 cr | ₹482 cr | -4.09% |
| Other income | ₹9 cr | ₹9 cr | -0.77% |
| Expenses | ₹383 cr | ₹392 cr | -2.46% |
| Operating profit | ₹80 cr | ₹90 cr | -11.20% |
| Operating margin (%) | 17.29% | 18.68% | — |
| Interest | ₹3 cr | ₹3 cr | -10.51% |
| Depreciation | ₹10 cr | ₹9 cr | +5.36% |
| Profit before tax | ₹76 cr | ₹86 cr | -11.92% |
| Tax | ₹18 cr | ₹22 cr | -19.52% |
| Net profit | ₹59 cr | ₹65 cr | -9.35% |
| EPS (₹) | ₹6.00 | ₹6.56 | -8.54% |
Operating margin of 17.29% compares with a Consumer Discretionary sector median of 13.09% across 129 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.66% | +0.15% |
Volume on the results session was 8.35× its 20-day average.
What to watch
- Whether operating margin stabilises above 17.29% after two consecutive quarterly declines.
- Whether revenue recovers from the Rs 462.62 cr reported in Q2FY27.
- Whether other income remains near 11.78% of pre-tax profit or becomes a smaller earnings contributor.