Expense surge cuts GATECH operating margin by 17.19 points
Revenue rose +39.56% QoQ, but expenses grew +113.79%; other income supplied 24.59% of pre-tax profit.
Filed 13 Nov 2026, 20:33 IST · after market close · GATECH (GATECH)
Key takeaways
- Consolidated operating margin fell 17.19 percentage points QoQ to 50.60% as expenses rose +113.79%, faster than revenue at +39.56%.
- Net profit increased +20.39% QoQ to Rs 1.83 cr, but other income accounted for 24.59% of pre-tax profit.
- The 0.30% tax rate was only 0.02 percentage points higher QoQ, so the profit increase was not driven by a lower tax rate.
Revenue growth did not translate into operating profit
GATECH reported consolidated revenue growth of +39.56% QoQ to Rs 6.28 cr, while operating profit increased only +4.26% to Rs 3.18 cr. The gap reflects a sharp increase in the cost base, leaving operating margin at 50.60%, down 17.19 percentage points from Q1FY27.
Costs, not tax, drove the quarter
Expenses grew +113.79% QoQ, nearly three times the pace of revenue growth, which explains the margin compression. Depreciation also rose +1.13% QoQ, while the tax rate moved up marginally by 0.02 percentage points to 0.30%. Other income contributed 24.59% of pre-tax profit, making reported profit quality an important consideration.
Margin fell below both earlier trend points
Operating margin had risen from 57.61% in Q1FY26 to 67.79% in Q1FY27 before falling to 50.60% in Q2FY27. The latest quarter therefore marks a clear reversal in the recent margin direction, even as net profit rose +20.39% QoQ to Rs 1.83 cr.
Results were filed after market close
The consolidated results were filed at 20:33 IST on 13 Nov 2026, after market close. There is no post-results stock reaction to assess yet.
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 | ₹6 cr | ₹5 cr | +39.56% |
| Other income | ₹0 cr | ₹0 cr | +80.00% |
| Expenses | ₹3 cr | ₹1 cr | +113.79% |
| Operating profit | ₹3 cr | ₹3 cr | +4.26% |
| Operating margin (%) | 50.60% | 67.79% | — |
| Interest | ₹0 cr | ₹0 cr | — |
| Depreciation | ₹2 cr | ₹2 cr | +1.13% |
| Profit before tax | ₹2 cr | ₹2 cr | +19.61% |
| Tax | ₹0 cr | ₹0 cr | — |
| Net profit | ₹2 cr | ₹2 cr | +20.39% |
| EPS (₹) | ₹0.01 | ₹0.01 | +0.00% |
What to watch
- Whether operating margin holds above 50.60% after the 17.19-percentage-point QoQ decline.
- Whether expense growth moderates from +113.79% QoQ.
- Whether other income remains close to 24.59% of pre-tax profit.