Profit grows 6.31% as costs outpace revenue growth
Margin improved sequentially as expenses fell faster than revenue, but higher interest and tax rates limited profit conversion.
Filed 27 Oct 2026, 17:53 IST · after market close · Gravita India Ltd (GRAVITA)
Key takeaways
- Consolidated net profit rose +6.31% YoY to Rs 102.03 cr as expenses grew +38.55%, faster than revenue at +37.84%.
- QoQ operating margin recovered 1.95 percentage points to 9.39% even as revenue fell -3.23%, because expenses fell -5.27%.
- Operating margin remained 5.24 percentage points below the 14.63% median of 25 reporting Commodities peers.
Price around the results
Cost and finance charges limited YoY profit growth
Gravita's consolidated Q2FY27 net profit rose +6.31% YoY to Rs 102.03 cr, far slower than revenue growth of +37.84%. Expenses grew +38.55%, while interest rose +77.49% and depreciation increased +50.49%. Other income fell -31.61% and the tax rate rose 4.1 percentage points, leaving PBT growth at +11.62%.
Sequential margin rebound came with weaker other income
Revenue fell -3.23% QoQ, but expenses declined faster at -5.27%, lifting operating margin by 1.95 percentage points to 9.39%. Net profit still fell -4.08% because other income dropped -62.14% and interest increased +20.91%; the lower tax rate helped, declining 1.11 percentage points. Other income contributed 14.49% of PBT, making it a material part of reported profit.
Margin recovered from Q1FY27 but trails peers
Operating margin rose from 7.44% in Q1FY27 to 9.39%, after reaching 11.78% in Q3FY26 and falling to 9.59% in Q4FY26. It remains below the 14.63% median for the 25 Commodities peers that have reported, with Gravita ranking sixth from the bottom.
Management outlined expansion and mix targets
Management said it is targeting 20–25% volume CAGR, 30–35% profitability growth and sustained ROIC of approximately 25%. The company said its Gujarat capacity expansion will be funded entirely through internal accruals and that capacity is planned to exceed 800,000 MTPA by FY 2029. The presentation also targets value-added products at about 60% or more and non-lead businesses at about 50% or more.
Results filed after market close; past reactions skew negative
The consolidated results were filed after market close, so no post-results market reaction is included yet. Across eight recent result reactions, the stock fell six times and rose twice, with a median absolute move of 5.06%.
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 | ₹1,427 cr | ₹1,475 cr | -3.23% | +37.84% |
| Other income | ₹18 cr | ₹48 cr | -62.14% | -31.61% |
| Expenses | ₹1,293 cr | ₹1,365 cr | -5.27% | +38.55% |
| Operating profit | ₹134 cr | ₹110 cr | +22.12% | +31.34% |
| Operating margin (%) | 9.39% | 7.44% | — | — |
| Interest | ₹14 cr | ₹11 cr | +20.91% | +77.49% |
| Depreciation | ₹14 cr | ₹14 cr | -4.14% | +50.49% |
| Profit before tax | ₹124 cr | ₹131 cr | -5.39% | +11.62% |
| Tax | ₹22 cr | ₹25 cr | -10.96% | +44.87% |
| Net profit | ₹102 cr | ₹106 cr | -4.08% | +6.31% |
| EPS (₹) | ₹14.01 | ₹14.60 | -4.04% | +6.30% |
Operating margin of 9.39% compares with a Commodities sector median of 14.63% across 25 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.02% | +0.20% |
Volume on the results session was 0.90× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company targets 20–25% volume CAGR and 30–35% profitability growth.
- The company targets sustained ROIC of approximately 25%.
- The company targets value-added products contributing about 60% or more and non-lead businesses about 50% or more.
- The company targets improved energy efficiency through an 8–10% reduction.
Expansion
- Gravita announced a significant Gujarat capacity expansion funded entirely through internal accruals.
- The company plans capacity of more than 800,000 MTPA by FY 2029.
What to watch
- Whether operating margin stays above 9.39% after its 1.95-percentage-point QoQ recovery.
- Whether interest growth moderates from +77.49% YoY and other income's 14.49% share of PBT changes.
- Whether management reports progress toward its targets of 20–25% volume CAGR and 30–35% profitability growth.