GRSE margin rebounds, but other income and interest cloud profit quality
Expenses fell while revenue edged up sequentially, lifting operating margin, but higher interest and lower other income limited pre-tax profit growth.
Filed 11 Nov 2026, 14:47 IST · Garden Reach Shipbuilders & Engineers Ltd (GRSE)
Key takeaways
- Standalone revenue grew +8.90% YoY while expenses rose +7.23%, lifting operating margin by 1.39 percentage points.
- Operating margin recovered 2.48 percentage points QoQ to 10.70% as revenue rose +0.67% and expenses fell -2.05%.
- Other income contributed 25.45% of pre-tax profit, while net profit fell -0.50% QoQ despite a 31.01% rise in operating profit.
Price around the results
Revenue was steady, with costs supporting the sequential recovery
GRSE reported standalone revenue growth of +0.67% QoQ and +8.90% YoY in Q2FY27. Expenses fell -2.05% QoQ and grew +7.23% YoY, slower than revenue in both comparisons. That cost pattern helped operating profit rise +31.01% QoQ and +25.19% YoY.
Operating gains were offset by weaker other income
Operating margin widened 2.48 percentage points QoQ and 1.39 percentage points YoY as expenses grew more slowly than revenue. Other income fell -40.80% QoQ and accounted for 25.45% of pre-tax profit, making reported profit less dependent on operations than the operating-profit increase alone suggests. Interest expense rose +127.13% QoQ and +135.91% YoY, while the tax rate increased 0.40 percentage points QoQ but was 0.79 percentage points lower YoY.
Margin recovered from Q1 but remains below the sector median
The 10.70% operating margin reversed the decline to 8.22% in Q1FY27, after 16.77% in Q4FY26; the recent trend is therefore a rebound rather than a sustained advance. GRSE's margin was 0.84 percentage points below the 11.54% median for 208 Industrials peers that had reported the quarter.
Early stock reaction was modest against its results history
The stock was up +0.72% at the initial reaction point, with a +0.86% opening gap and -0.12% relative performance. That move was smaller than the 1.60% median absolute move after the last eight results; the stock rose after seven of those occasions and fell after one.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,827 cr | ₹1,815 cr | +0.67% | +8.90% |
| Other income | ₹59 cr | ₹100 cr | -40.80% | -14.18% |
| Expenses | ₹1,631 cr | ₹1,665 cr | -2.05% | +7.23% |
| Operating profit | ₹196 cr | ₹149 cr | +31.01% | +25.19% |
| Operating margin (%) | 10.70% | 8.22% | — | — |
| Interest | ₹9 cr | ₹4 cr | +127.13% | +135.91% |
| Depreciation | ₹14 cr | ₹14 cr | +5.78% | +20.30% |
| Profit before tax | ₹232 cr | ₹232 cr | +0.04% | +10.63% |
| Tax | ₹60 cr | ₹59 cr | +1.64% | +7.34% |
| Net profit | ₹172 cr | ₹173 cr | -0.50% | +11.82% |
| EPS (₹) | ₹15.01 | ₹15.09 | -0.53% | +11.76% |
Operating margin of 10.70% compares with a Industrials sector median of 11.54% across 208 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.72% | -0.12% |
Volume on the results session was 1.71× its 20-day average.
What to watch
- Whether operating margin holds above 10.70% after the 2.48-percentage-point QoQ recovery.
- Whether expenses continue to grow more slowly than revenue, following +7.23% YoY expense growth against +8.90% revenue growth.
- Whether other income's contribution to pre-tax profit moves below 25.45%.