Graphite India margin drops 7.05 points after Q1 peak
QoQ profit fell as costs rose despite lower revenue; YoY earnings improved, but other income supplied 60.43% of pre-tax profit.
Filed 03 Nov 2026, 14:02 IST · Graphite India Ltd (GRAPHITE)
Key takeaways
- Consolidated operating margin fell 7.05 percentage points QoQ to 10.05% as expenses rose 6.45% while revenue declined 1.90%.
- Net profit rose 23.68% YoY despite a 4.75-percentage-point increase in the tax rate, helped by revenue growth of 13.31% against expense growth of 8.31%.
- Other income contributed 60.43% of pre-tax profit, making reported earnings materially less dependent on operating profit.
Price around the results
Q2 margin gave back much of Q1's expansion
Graphite India’s consolidated operating margin fell to 10.05% from 17.10% QoQ, reversing part of the sharp improvement seen in Q1FY27. Revenue declined 1.90% while expenses rose 6.45%, causing operating profit to fall 42.36% and net profit to decline 45.03%. The margin was still 4.15 percentage points above Q2FY26 as revenue grew 13.31% and expenses grew 8.31% YoY.
Tax and other income shaped reported profit
The QoQ tax-rate increase of 12.28 percentage points added pressure below operating profit, while interest expense was unchanged. Other income accounted for 60.43% of pre-tax profit, so net earnings included a substantial non-operating contribution. YoY, the tax rate was also 4.75 percentage points higher, limiting the conversion of the 93.02% operating-profit increase into a 23.68% net-profit increase.
Margin trails the Industrials peer median
Among 108 Industrials companies that had reported the same quarter, Graphite India’s 10.05% operating margin was 0.98 percentage points below the sector median of 11.03%. The quarterly trend shows margin rising from 6.47% in Q1FY26 to 6.54% in Q3FY26, falling to -17.03% in Q4FY26, then jumping to 17.10% before the latest decline. Q2FY27 therefore marks a sharp pullback from the immediate prior quarter rather than a third consecutive decline.
Initial stock reaction was smaller than its usual move
The stock was down 0.85% at the reaction anchor, with a 2.43% relative decline. That initial move was smaller than the 2.77% median absolute move after the company’s last eight results. The historical pattern was evenly split, with four rises and four declines.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹826 cr | ₹842 cr | -1.90% | +13.31% |
| Other income | ₹84 cr | ₹97 cr | -13.40% | -5.62% |
| Expenses | ₹743 cr | ₹698 cr | +6.45% | +8.31% |
| Operating profit | ₹83 cr | ₹144 cr | -42.36% | +93.02% |
| Operating margin (%) | 10.05% | 17.10% | — | — |
| Interest | ₹4 cr | ₹4 cr | +0.00% | +33.33% |
| Depreciation | ₹24 cr | ₹23 cr | +4.35% | +0.00% |
| Profit before tax | ₹139 cr | ₹214 cr | -35.05% | +32.38% |
| Tax | ₹45 cr | ₹43 cr | +4.65% | +55.17% |
| Net profit | ₹94 cr | ₹171 cr | -45.03% | +23.68% |
| EPS (₹) | ₹4.89 | ₹8.82 | -44.56% | +25.06% |
Operating margin of 10.05% compares with a Industrials sector median of 11.03% across 108 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.85% | -2.43% |
Volume on the results session was 1.55× its 20-day average.
What to watch
- Whether operating margin holds above 10.05% after the 7.05-percentage-point QoQ decline.
- Whether expenses continue to outpace revenue after rising 6.45% QoQ against a 1.90% revenue decline.
- Whether other income remains near 60.43% of pre-tax profit and the tax rate remains above 32.37%.