Garuda margin slips as costs fall slower than revenue
Q2FY27 consolidated net profit fell 2.22% sequentially, while the 31.49% operating margin remained 19.25 percentage points above the Industrials peer median.
Filed 04 Nov 2026, 09:48 IST · Garuda Construction and Engineering Ltd (GARUDA)
Key takeaways
- Consolidated operating margin narrowed 0.52 percentage points QoQ to 31.49% as expenses fell 1.42% against a 2.16% revenue decline.
- Net profit fell 2.22% QoQ to Rs 40.61 cr, with a 75.47% rise in interest partly offset by a 0.66 percentage-point lower tax rate.
- Garuda's 31.49% operating margin was 19.25 percentage points above the 12.24% median for 143 reported Industrials peers.
Price around the results
Revenue softened, with profit declining faster
Garuda's consolidated revenue fell 2.16% QoQ to Rs 171.59 cr, while expenses declined 1.42%. Because costs fell more slowly than revenue, operating profit dropped 3.74% and operating margin narrowed 0.52 percentage points to 31.49%. That translated into a 2.22% decline in net profit to Rs 40.61 cr.
Higher interest added to the margin pressure
Interest rose 75.47% QoQ, adding a further drag below operating profit. The tax rate fell 0.66 percentage points to 24.84%, cushioning the decline in pre-tax profit. Other income was only 1.91% of pre-tax profit, so it did not materially drive reported earnings.
Margin remains well above Industrials peers
The 31.49% operating margin was 19.25 percentage points above the 12.24% median for 143 Industrials peers that had reported the quarter. It nevertheless slipped from 32.01% in Q1FY27, marking a sequential deterioration; this quarter alone does not establish a multi-quarter direction.
Shares opened higher on active trading
The stock rose 2.22% on the result date after opening 2.07% higher, with relative performance of 1.59%. Trading volume was 8.15 times its reference level, indicating substantial participation in the move.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹172 cr | ₹175 cr | -2.16% |
| Other income | ₹1 cr | ₹0 cr | +312.00% |
| Expenses | ₹118 cr | ₹119 cr | -1.42% |
| Operating profit | ₹54 cr | ₹56 cr | -3.74% |
| Operating margin (%) | 31.49% | 32.01% | — |
| Interest | ₹1 cr | ₹1 cr | +75.47% |
| Depreciation | ₹0 cr | ₹0 cr | +0.00% |
| Profit before tax | ₹54 cr | ₹56 cr | -3.09% |
| Tax | ₹13 cr | ₹14 cr | -5.63% |
| Net profit | ₹41 cr | ₹42 cr | -2.22% |
| EPS (₹) | ₹4.37 | ₹4.47 | -2.24% |
Operating margin of 31.49% compares with a Industrials sector median of 12.24% across 143 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.22% | +1.59% |
Volume on the results session was 8.15× its 20-day average.
What to watch
- Whether operating margin holds above 31.49% after the 0.52 percentage-point QoQ decline.
- Whether interest growth moderates after rising 75.47% QoQ.
- Whether revenue returns to growth after declining 2.16% QoQ.