Granules India margin rebounds, but shares fall 2.55% next day
Operating margin recovered 9.51 percentage points from Q4FY26 as expenses declined, while the higher tax rate kept net profit growth below pre-tax profit growth.
Filed 21 Jul 2026, 12:12 IST · Granules India Ltd (GRANULES)
Key takeaways
- Granules India’s consolidated operating margin rose 9.51 percentage points sequentially to 18.37% as expenses fell 10.06% while revenue grew 0.42%.
- Year-on-year revenue grew 22.04% and operating profit rose 55.50%, but a 3.08 percentage-point increase in the tax rate limited net profit growth to 59.77%.
- The stock was almost flat on the filing day before falling 2.55% in the next session, matching its median absolute move after the past eight results.
Price around the results
Margin rebounds from Q4FY26 trough
Consolidated revenue was broadly steady sequentially, rising 0.42%, but expenses declined 10.06%, lifting operating margin by 9.51 percentage points to 18.37%. This reversed the fall to 8.86% in Q4FY26 and produced the highest margin in the five-quarter trend shown. Year on year, revenue grew 22.04% against expense growth of 16.40%, expanding margin by 3.96 percentage points.
Tax rate restrained the profit conversion
Net profit grew 59.77% year on year, below the 66.33% increase in profit before tax, as the tax rate rose 3.08 percentage points to 25.14%. Interest expense fell 11.19% year on year and 35.39% sequentially, supporting pre-tax profit. Other income was only 0.94% of pre-tax profit, so reported earnings were not materially dependent on non-operating income.
Below the Healthcare peer margin median
Granules India’s 18.37% operating margin was 6.27 percentage points below the 24.64% median for the eight Healthcare peers that had reported the same quarter. The company ranked third from the bottom on this measure. The quarter still marks a clear recovery from the 11.82% margin in Q2FY26 and 14.91% in Q3FY26.
Next-session decline was normal for this stock
The shares opened 0.45% higher and ended the filing day down 0.05%, then fell 2.55% in the next session. That next-session move matched the median absolute reaction across the past eight result announcements, which were split evenly between four rises and four falls. Volume was 2.47 times the reference level, although the reaction overlapped with a corporate action.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,477 cr | ₹1,471 cr | +0.42% | +22.04% |
| Other income | ₹2 cr | ₹9 cr | -74.12% | -86.11% |
| Expenses | ₹1,206 cr | ₹1,340 cr | -10.06% | +16.40% |
| Operating profit | ₹271 cr | ₹130 cr | +108.25% | +55.50% |
| Operating margin (%) | 18.37% | 8.86% | — | — |
| Interest | ₹21 cr | ₹33 cr | -35.39% | -11.19% |
| Depreciation | ₹80 cr | ₹82 cr | -2.57% | +15.69% |
| Profit before tax | ₹240 cr | ₹262 cr | -8.37% | +66.33% |
| Tax | ₹60 cr | ₹61 cr | -0.58% | +89.53% |
| Net profit | ₹180 cr | ₹202 cr | -10.72% | +59.77% |
| EPS (₹) | ₹7.26 | ₹8.23 | -11.79% | +56.47% |
Operating margin of 18.37% compares with a Healthcare sector median of 24.64% across 8 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.05% | +0.16% |
| Next session | -2.55% | — |
Volume on the results session was 2.47× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 18.37% after the Q1FY27 rebound.
- Whether expenses remain below the prior-quarter base of Rs 1,340.37 cr.
- Whether the tax rate moves back from 25.14% toward the Q4FY26 level of 23.17%.