Granules India lifts operating margin for a third straight quarter
Revenue growth outpaced expenses, while a 2.55-point sequential tax-rate decline also supported profit; the stock was down 0.77% the next day.
Filed 29 Apr 2026, 12:37 IST · Granules India Ltd (GRANULES)
Key takeaways
- Consolidated operating margin rose 2.87 percentage points year on year to 23.94% as revenue growth outpaced expense growth.
- Consolidated net profit increased 32.59% year on year to Rs 201.57 cr, despite interest costs rising 36.32%.
- The stock's initial 0.77% decline was smaller than its 2.55% median absolute move after the last eight results.
Price around the results
Revenue growth translated into wider margins
Consolidated revenue rose 22.81% year on year and 5.96% sequentially, while expenses grew more slowly at 18.35% and 3.58%, respectively. That cost discipline lifted operating margin by 2.87 percentage points year on year and 1.74 percentage points sequentially. Operating margin has now increased for three consecutive quarters, from 20.39% in Q1FY26 to 23.94% in Q4FY26.
Profit growth outpaced operating profit, but quality needs watching
Net profit grew 32.59% year on year and 34.19% sequentially, ahead of operating profit growth of 39.52% and 14.28%, respectively. Sequentially, the tax rate fell 2.55 percentage points to support the profit increase, whereas the year-on-year tax rate was broadly unchanged, rising 0.13 percentage points. Other income contributed 9.41% of pre-tax profit, so part of reported earnings came from non-operating income; interest expense also rose 36.32% year on year and 13.94% sequentially.
Margin was just above the reported healthcare-peer median
Granules India's 23.94% operating margin was 0.56 percentage points above the 23.38% median among 48 healthcare peers that had reported the same quarter. The sequential margin expansion followed increases in Q2FY26 and Q3FY26, extending the recovery from 20.39% in Q1FY26. This places the company above the peer median, but only by a modest margin.
The market reaction was muted at first
The stock fell 0.09% on the result date and 0.77% on the next trading day, despite trading volume reaching 4.55 times its usual level. That next-day move was smaller than the 2.55% median absolute reaction across the last eight results, when the stock rose after five and fell after three. By the fifth trading day, the stock was up 5.44%, a larger move than its initial response.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,471 cr | ₹1,388 cr | +5.96% | +22.81% |
| Other income | ₹25 cr | ₹-4 cr | — | -24.43% |
| Expenses | ₹1,119 cr | ₹1,080 cr | +3.58% | +18.35% |
| Operating profit | ₹352 cr | ₹308 cr | +14.28% | +39.52% |
| Operating margin (%) | 23.94% | 22.20% | — | — |
| Interest | ₹33 cr | ₹29 cr | +13.94% | +36.32% |
| Depreciation | ₹82 cr | ₹74 cr | +11.18% | +28.74% |
| Profit before tax | ₹262 cr | ₹202 cr | +29.73% | +32.81% |
| Tax | ₹61 cr | ₹52 cr | +16.86% | +33.55% |
| Net profit | ₹202 cr | ₹150 cr | +34.19% | +32.59% |
| EPS (₹) | ₹8.23 | ₹6.19 | +32.96% | +31.26% |
Operating margin of 23.94% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.09% | -0.84% |
| Next session | -0.77% | — |
| 5 sessions | +5.44% | +4.06% |
| 15 sessions | +8.37% | — |
| 30 sessions | +8.69% | — |
Volume on the results session was 4.55× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 23.94% after three consecutive quarterly increases.
- Whether sequential interest-cost growth moderates from 13.94%.
- Whether other income remains near 9.41% of pre-tax profit or becomes a smaller earnings contributor.