Grindwell's Q1 margin drops 7.20 points sequentially
Year-on-year revenue grew 14.19%, but expenses rose 5.75% sequentially despite a 4.62% revenue decline.
Filed 24 Jul 2026, 18:57 IST · after market close · Grindwell Norton Ltd (GRINDWELL)
Key takeaways
- Consolidated net profit rose 22.11% YoY as revenue grew 14.19% and expenses grew 12.68%.
- Operating margin expanded 1.09 percentage points YoY to 19.55%, while edging up only 0.05 percentage points sequentially despite a 4.62% revenue decline.
- Other income accounted for 16.23% of pre-tax profit, while the stock gained 3.79% over five sessions against a 2.89% median absolute move after its last eight results.
Price around the results
YoY growth outpaced the sequential slowdown
Consolidated revenue rose 14.19% YoY, while operating profit grew 20.88% and net profit 22.11%, with EPS up 22.27% to Rs 10.43. Sequentially, revenue declined 4.62% and net profit fell 3.37%, reflecting a moderation from the Q4FY26 peak rather than a reversal in the annual growth trend.
Slower cost growth lifted the annual margin
Expenses grew 12.68% YoY, slower than revenue, which widened operating margin by 1.09 percentage points. Sequentially, expenses fell 4.68%, slightly faster than revenue, leaving margin broadly stable with a 0.05 percentage-point improvement. Lower interest costs also supported pre-tax profit, falling 36.11% YoY and 19.30% QoQ.
Margin remains above the Industrials peer median
Operating margin has recovered from 18.16% in Q2FY26 to 19.55% in Q1FY27, after reaching 19.50% in Q4FY26. It was 5.62 percentage points above the 13.93% median for the 112 Industrials peers that had reported the quarter. Profit quality was partly supported by other income, which contributed 16.23% of pre-tax profit, while the sequential tax-rate increase of 0.81 percentage points limited the conversion into net profit.
Initial market reaction was positive but not unusual
The stock rose 0.15% on the first reaction day and 3.79% over five sessions, while remaining 0.45% behind the benchmark on a five-session relative basis. That five-session move was above the 2.89% median absolute move across the last eight result reactions, although the historical pattern was mixed, with three rises and five declines.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹803 cr | ₹842 cr | -4.62% | +14.19% |
| Other income | ₹25 cr | ₹21 cr | +17.96% | +3.99% |
| Expenses | ₹646 cr | ₹678 cr | -4.68% | +12.68% |
| Operating profit | ₹157 cr | ₹164 cr | -4.38% | +20.88% |
| Operating margin (%) | 19.55% | 19.50% | — | — |
| Interest | ₹1 cr | ₹2 cr | -19.30% | -36.11% |
| Depreciation | ₹27 cr | ₹26 cr | +2.39% | +2.39% |
| Profit before tax | ₹154 cr | ₹158 cr | -2.33% | +22.45% |
| Tax | ₹39 cr | ₹38 cr | +0.91% | +23.48% |
| Net profit | ₹115 cr | ₹119 cr | -3.37% | +22.11% |
| EPS (₹) | ₹10.43 | ₹10.73 | -2.80% | +22.27% |
Operating margin of 19.55% compares with a Industrials sector median of 13.93% across 112 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.15% | -0.81% |
| Next session | +1.58% | — |
| 5 sessions | +3.79% | -0.45% |
Volume on the results session was 0.41× its 20-day average.
What to watch
- Whether operating margin holds above 19.55% after the annual expansion of 1.09 percentage points.
- Whether other income remains below or above its 16.23% share of pre-tax profit.