GRSE margin drops 8.55 points QoQ as revenue falls 14.37%
Year-on-year profit growth was supported by lower tax and other income, while operating margin remained below the Industrials peer median.
Filed 29 Jul 2026, 14:04 IST · Garden Reach Shipbuilders & Engineers Ltd (GRSE)
Key takeaways
- Standalone Q1FY27 revenue grew 38.53% YoY, but expenses grew 39.02%, narrowing operating margin by 0.32 percentage points.
- Operating margin fell 8.55 percentage points QoQ to 8.22% after the 16.77% recorded in Q4FY26.
- Net profit rose 43.82% YoY to Rs 172.84 cr, helped by a 2.57-percentage-point lower tax rate and other income equal to 43.01% of pre-tax profit.
Price around the results
Year-on-year growth came with slight margin dilution
Standalone revenue increased 38.53% YoY to Rs 1,814.62 cr, but expenses grew faster at 39.02%, so operating margin narrowed by 0.32 percentage points. Operating profit therefore grew 33.35%, slower than revenue. Lower interest costs, down 38.26% YoY, and a 2.57-percentage-point reduction in the tax rate helped net profit grow 43.82% to Rs 172.84 cr.
Q1 reversed the Q4 margin spike
Revenue declined 14.37% QoQ while expenses fell only 5.59%, driving an 8.55-percentage-point margin contraction. Operating profit fell 58.00% from Q4FY26, and net profit declined 42.99% to Rs 172.84 cr. The quarterly trend shows margin moving from 9.31% in Q2FY26 to 9.07% in Q3FY26, then rising to 16.77% in Q4FY26 before falling to 8.22% in Q1FY27.
Other income made up 43.01% of pre-tax profit
Other income contributed 43.01% of pre-tax profit, making the reported earnings less reflective of operating profit alone. The tax rate fell to 25.35% from 27.92% a year earlier, which also supported the increase in net profit. At 8.22%, GRSE's operating margin was 6.42 percentage points below the 14.64% median for 27 Industrials peers and ranked fourth from the bottom.
Past result reactions have usually been positive
Across the last eight result reactions, the stock rose six times and fell twice. The median absolute move was 2.63%, indicating that a move around that size has been typical after recent results. The current filing was made at 14:04 IST, so the latest market response is not covered here.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,815 cr | ₹2,119 cr | -14.37% | +38.53% |
| Other income | ₹100 cr | ₹71 cr | +39.94% | +37.24% |
| Expenses | ₹1,665 cr | ₹1,764 cr | -5.59% | +39.02% |
| Operating profit | ₹149 cr | ₹355 cr | -58.00% | +33.35% |
| Operating margin (%) | 8.22% | 16.77% | — | — |
| Interest | ₹4 cr | ₹3 cr | +43.51% | -38.26% |
| Depreciation | ₹14 cr | ₹13 cr | +3.93% | +15.88% |
| Profit before tax | ₹232 cr | ₹411 cr | -43.65% | +38.87% |
| Tax | ₹59 cr | ₹108 cr | -45.48% | +26.11% |
| Net profit | ₹173 cr | ₹303 cr | -42.99% | +43.82% |
| EPS (₹) | ₹15.09 | ₹26.47 | -42.99% | +43.85% |
Operating margin of 8.22% compares with a Industrials sector median of 14.64% across 27 peers that have reported Q1FY27.
What to watch
- Whether operating margin moves back above 8.22% after the Q1FY27 decline.
- Whether expenses continue to grow faster than revenue, following the YoY gap of 39.02% versus 38.53%.
- Whether other income remains a material contributor relative to the 43.01% share of pre-tax profit.