Grindwell's margin slips as costs outpace sequential revenue growth
Consolidated revenue rose +14.06% YoY, but other income supplied 22.52% of pre-tax profit.
Filed 29 Oct 2026, 18:22 IST · after market close · Grindwell Norton Ltd (GRINDWELL)
Key takeaways
- Consolidated net profit rose +23.96% YoY to Rs 133.17 cr as revenue grew faster than expenses.
- Sequential operating margin narrowed 0.71 percentage points to 18.84% because expenses grew +10.98% against revenue growth of +10.01%.
- Other income contributed 22.52% of pre-tax profit, making earnings quality an important focus despite the unchanged YoY tax rate of 25.01%.
Price around the results
Revenue growth lifted consolidated profit
Grindwell Norton’s consolidated revenue grew +14.06% YoY, while expenses rose +13.11%, allowing operating profit to increase +18.33%. That operating leverage, along with lower interest costs of -21.76% YoY, helped net profit rise +23.96% to Rs 133.17 cr. Sequentially, net profit also increased +15.48%, supported by revenue growth of +10.01%.
Sequential margin pressure returned in Q2FY27
Operating margin narrowed 0.71 percentage points sequentially because expenses grew faster than revenue, reversing some of the improvement seen in Q1FY27. The margin nevertheless expanded 0.68 percentage points YoY, as revenue growth exceeded expense growth. Other income accounted for 22.52% of pre-tax profit; the tax rate was unchanged YoY and fell 0.17 percentage points sequentially, so tax was not the reason for the YoY profit increase.
Margin remains above the reported Industrials peer median
The 18.84% operating margin was 6.76 percentage points above the 12.08% median for the 61 Industrials peers that had reported the same quarter. The margin moved from 19.50% in Q4FY26 to 19.55% in Q1FY27 before falling to 18.84% in Q2FY27, making this a sequential setback after the recent peak rather than a third straight quarterly decline.
No immediate market reaction after the filing
The consolidated results were filed after market close, so there is no market response to assess yet. Across the past eight result reactions, the stock has risen four times and fallen four times, with a median absolute move of 2.89%, indicating a mixed historical response rather than a consistent direction.
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 | ₹884 cr | ₹803 cr | +10.01% | +14.06% |
| Other income | ₹40 cr | ₹25 cr | +59.83% | +28.71% |
| Expenses | ₹717 cr | ₹646 cr | +10.98% | +13.11% |
| Operating profit | ₹166 cr | ₹157 cr | +6.01% | +18.33% |
| Operating margin (%) | 18.84% | 19.55% | — | — |
| Interest | ₹2 cr | ₹1 cr | +22.46% | -21.76% |
| Depreciation | ₹27 cr | ₹27 cr | +2.41% | +3.19% |
| Profit before tax | ₹178 cr | ₹154 cr | +15.21% | +23.97% |
| Tax | ₹44 cr | ₹39 cr | +14.46% | +24.01% |
| Net profit | ₹133 cr | ₹115 cr | +15.48% | +23.96% |
| EPS (₹) | ₹11.99 | ₹10.43 | +14.96% | +24.25% |
Operating margin of 18.84% compares with a Industrials sector median of 12.08% across 61 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 18.84% after the sequential decline.
- Whether expense growth falls below the +10.01% sequential revenue growth rate.
- Whether other income remains close to 22.52% of pre-tax profit.