Glaxo's Q2 margin rebounds as revenue outpaces cost growth sequentially
The recovery follows a two-quarter margin decline, but year-on-year profitability was still marginally weaker as costs grew faster than revenue.
Filed 03 Nov 2026, 18:49 IST · after market close · Glaxosmithkline Pharmaceuticals Ltd (GLAXO)
Key takeaways
- Consolidated operating margin recovered 2.48 percentage points sequentially as revenue growth of +26.12% outpaced expense growth of +21.55%.
- Year-on-year margin still slipped 0.29 percentage points because expenses grew +21.31%, faster than revenue at +20.78%.
- Net profit rose +30.44% year-on-year, with other income contributing 15.84% of profit before tax and the tax rate falling 0.38 percentage points.
Price around the results
Sequential margin recovery breaks the recent decline
Consolidated revenue growth accelerated sequentially to +26.12%, while expenses grew +21.55%, lifting operating margin by 2.48 percentage points. This reverses the decline from 35.66% in Q3FY26 to 31.49% in Q1FY27. Year-on-year, however, expenses grew +21.31% against revenue growth of +20.78%, leaving margin 0.29 percentage points lower.
Other income supported profit growth
Net profit increased +30.44% year-on-year, ahead of operating profit growth of +19.76%, helped by other income growth of +100.99%. Other income accounted for 15.84% of profit before tax, so reported earnings included a meaningful non-operating contribution. The year-on-year tax-rate decline of 0.38 percentage points also supported net profit, while the sequential tax rate rose 0.44 percentage points.
Margin remains above the healthcare peer median
Glaxo's 33.97% operating margin was 12.73 percentage points above the 21.24% median for the 56 healthcare peers that had reported the same quarter. The stock reaction is not yet available because the consolidated results were filed after market close. Across the last eight result reactions, the stock rose four times and fell four times, with a median absolute move of 1.7%.
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 | YoY |
|---|---|---|---|---|
| Revenue | ₹1,184 cr | ₹938 cr | +26.12% | +20.78% |
| Other income | ₹73 cr | ₹44 cr | +66.32% | +100.99% |
| Expenses | ₹782 cr | ₹643 cr | +21.55% | +21.31% |
| Operating profit | ₹402 cr | ₹296 cr | +36.06% | +19.76% |
| Operating margin (%) | 33.97% | 31.49% | — | — |
| Interest | ₹0 cr | ₹1 cr | -49.48% | -3.92% |
| Depreciation | ₹15 cr | ₹16 cr | -5.18% | -13.83% |
| Profit before tax | ₹459 cr | ₹322 cr | +42.45% | +29.76% |
| Tax | ₹123 cr | ₹85 cr | +44.79% | +27.92% |
| Net profit | ₹336 cr | ₹237 cr | +41.61% | +30.44% |
| EPS (₹) | ₹19.83 | ₹14.00 | +41.64% | +31.59% |
Operating margin of 33.97% compares with a Healthcare sector median of 21.24% across 56 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 33.97% after the 2.48-percentage-point sequential recovery.
- Whether expenses continue to grow more slowly than revenue after the sequential gap of 21.55% versus 26.12%.
- Whether other income remains a meaningful contributor after accounting for 15.84% of profit before tax.