Glenmark margin improves, but other-income reversal cuts profit 41% sequentially
Standalone revenue rose 60.91% year on year, while the tax rate and higher interest expense weighed on sequential earnings.
Filed 05 Nov 2026, 17:04 IST · after market close · Glenmark Pharmaceuticals Ltd (GLENMARK)
Key takeaways
- Standalone operating margin improved 2.35 percentage points sequentially to 27.54% as revenue grew 1.68% while expenses fell 1.52%.
- Net profit fell 40.88% sequentially because other income swung from Rs 338.41 cr to negative Rs 34.73 cr and the tax rate rose 6.32 percentage points.
- Revenue rose 60.91% year on year while expenses increased 4.51%, reversing the year-ago operating loss and lifting margin by 39.11 percentage points.
Price around the results
Operating recovery extends into Q2FY27
Glenmark reported standalone revenue growth of 60.91% year on year, while expenses rose only 4.51%, taking operating margin 39.11 percentage points higher than in Q2FY26. The comparison reflects a recovery from the year-ago operating loss, when margin was negative 11.57%. Sequentially, revenue grew 1.68% and operating profit rose 11.18%.
Margin gains came despite higher finance costs
Sequential margin expanded 2.35 percentage points because expenses declined 1.52% even as revenue increased 1.68%. Interest expense rose 33.03% sequentially and depreciation increased 1.09%, limiting the conversion of operating profit into pre-tax profit. The tax rate also rose 6.32 percentage points to 21.38%.
Profit quality was weaker than operating performance
Net profit dropped 40.88% sequentially because other income moved from Rs 338.41 cr in Q1FY27 to negative Rs 34.73 cr in Q2FY27. Other income represented negative 6.28% of pre-tax profit, so it did not support reported earnings this quarter. Year on year, the company moved from a net loss of Rs 739.19 cr to net profit of Rs 434.89 cr.
Margin remains above the Healthcare peer median
Glenmark's 27.54% operating margin was 5.84 percentage points above the 21.70% median for the 83 Healthcare peers that had reported the same quarter. The margin has recovered from negative 11.57% in Q2FY26 and 1.47% in Q4FY26, rising to 25.19% in Q1FY27 and 27.54% in Q2FY27. Results were filed after market close, so there is no post-results stock reaction yet; after the last eight results, the stock rose once and fell seven times, with a median absolute move of 3.24%.
Q2FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,476 cr | ₹2,435 cr | +1.68% | +60.91% |
| Other income | ₹-35 cr | ₹338 cr | — | +94.62% |
| Expenses | ₹1,794 cr | ₹1,822 cr | -1.52% | +4.51% |
| Operating profit | ₹682 cr | ₹613 cr | +11.18% | — |
| Operating margin (%) | 27.54% | 25.19% | — | — |
| Interest | ₹31 cr | ₹23 cr | +33.03% | +32.18% |
| Depreciation | ₹63 cr | ₹62 cr | +1.09% | +6.91% |
| Profit before tax | ₹553 cr | ₹866 cr | -36.13% | — |
| Tax | ₹118 cr | ₹130 cr | -9.37% | — |
| Net profit | ₹435 cr | ₹736 cr | -40.88% | — |
| EPS (₹) | ₹15.41 | ₹26.07 | -40.89% | — |
Operating margin of 27.54% compares with a Healthcare sector median of 21.70% across 83 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 27.54% after improving for the second consecutive quarter.
- Whether other income remains below zero after contributing negative 6.28% of pre-tax profit.
- Whether the tax rate moves back from 21.38% and interest expense moderates from its 33.03% sequential increase.