GlaxoSmithKline margin falls 3.77 points sequentially
Year-on-year profit rose 15.69%, but slower sequential revenue and a 13.57% contribution from other income temper the quarter.
Filed 03 Aug 2026, 16:05 IST · after market close · Glaxosmithkline Pharmaceuticals Ltd (GLAXO)
Key takeaways
- Consolidated net profit rose 15.69% year on year, but fell 14.64% sequentially as operating margin narrowed 3.77 percentage points.
- Operating margin at 31.49% remained 8.54 percentage points above the 22.95% median for 31 reported healthcare peers.
- Other income contributed 13.57% of pre-tax profit, making a meaningful contribution to reported earnings quality.
Price around the results
Sequential slowdown interrupts year-on-year growth
Consolidated revenue grew 16.55% year on year, with operating profit up 17.64% and net profit up 15.69%. Sequentially, revenue fell 5.71% while operating profit declined 15.80%, showing a clear loss of momentum from Q4FY26.
Costs held back the sequential margin
Sequential revenue fell 5.71%, but expenses declined only 0.22%, so costs grew faster than revenue on the comparison and operating margin narrowed 3.77 percentage points. Year on year, revenue grew slightly faster than expenses, allowing margin to improve by 0.29 percentage points. The tax rate was broadly stable year on year, down 0.07 percentage points, while interest expense increased 130.95%.
Margin has declined for two straight quarters
Operating margin has eased from 35.66% in Q3FY26 to 35.26% in Q4FY26 and 31.49% in Q1FY27. Despite that direction, the company remained above the 22.95% median margin of 31 healthcare peers that had reported the quarter, by 8.54 percentage points.
Management flags slower anti-infectives growth
Management said anti-infectives grew slower within acute therapies, while pain and derma grew at 11%. Other income accounted for 13.57% of pre-tax profit, so reported earnings were not driven only by operating performance. The results were filed after market close, and the stock has historically split evenly after results across eight observations, with four rises and four falls and a median absolute move of 2.00%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹938 cr | ₹995 cr | -5.71% | +16.55% |
| Other income | ₹44 cr | ₹36 cr | +21.72% | +0.09% |
| Expenses | ₹643 cr | ₹644 cr | -0.22% | +16.06% |
| Operating profit | ₹296 cr | ₹351 cr | -15.80% | +17.64% |
| Operating margin (%) | 31.49% | 35.26% | — | — |
| Interest | ₹1 cr | ₹1 cr | +59.02% | +130.95% |
| Depreciation | ₹16 cr | ₹13 cr | +20.27% | +2.06% |
| Profit before tax | ₹322 cr | ₹373 cr | -13.58% | +15.58% |
| Tax | ₹85 cr | ₹95 cr | -10.47% | +15.28% |
| Net profit | ₹237 cr | ₹278 cr | -14.64% | +15.69% |
| EPS (₹) | ₹14.00 | ₹16.40 | -14.63% | +15.70% |
Operating margin of 31.49% compares with a Healthcare sector median of 22.95% across 31 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Problems & risks
- Within acute therapies, the company said anti-infectives grew slower.
What to watch
- Whether operating margin recovers from 31.49% after two consecutive quarterly declines.
- Whether acute-therapy growth improves from management's reported slower pace in anti-infectives.
- Whether other income remains near its 13.57% share of pre-tax profit.