GRSE margin expands as revenue growth outpaces costs
Standalone operating margin rose 3.31 percentage points year on year, while lower other income and a higher tax rate limited net-profit growth to 24.14%.
Filed 28 Apr 2026, 19:04 IST · after market close · Garden Reach Shipbuilders & Engineers Ltd (GRSE)
Key takeaways
- Standalone operating profit rose 60.78% year on year as revenue grew 29.06% and expenses grew 24.13%.
- Operating margin expanded 3.31 percentage points year on year to 16.77%, helped by costs growing slower than revenue.
- The stock gained 6.87% on the first trading day after the results, well above its 2.63% median move after the past eight results.
Price around the results
Q4 revenue growth translated into a sharp operating-profit gain
Standalone revenue rose 29.06% year on year and 11.79% sequentially to Rs 2,119.21 cr. Expenses grew 24.13% year on year and 2.33% sequentially, allowing operating profit to rise 60.78% year on year and 106.65% sequentially. This was the second consecutive quarter of sequential revenue growth after Q1FY26.
Margin recovery was driven by operating leverage, but profit quality needs context
Operating margin expanded 3.31 percentage points year on year and 7.70 percentage points sequentially because expenses grew slower than revenue in both comparisons. Net profit grew a slower 24.14% year on year as other income fell 37.55%, while the tax rate rose 1.69 percentage points; interest expense also increased 92.65% year on year. Other income still accounted for 17.32% of pre-tax profit, so it remained a material contributor to reported earnings.
Q4 margin moved above the Industrials peer median
The 16.77% operating margin was 1.11 percentage points above the 15.66% median for the 71 Industrials peers that had reported the quarter. The margin had risen from 5.92% in Q3FY25 to 13.46% in Q4FY25, then slipped to 8.54% in Q1FY26 and 9.31% in Q2FY26 before easing to 9.07% in Q3FY26. Q4FY26 therefore marked a sharp sequential recovery rather than a continuation of the Q3 decline.
The initial market reaction was unusually large for GRSE
The stock rose 6.87% on the first trading day after the standalone results and was up 7.60% after five trading days. That reaction was larger than the 2.63% median absolute move across the past eight result reactions, during which the stock rose six times and fell twice. Trading volume was 6.83 times the reference level on the first day.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,119 cr | ₹1,896 cr | +11.79% | +29.06% |
| Other income | ₹71 cr | ₹62 cr | +14.76% | -37.55% |
| Expenses | ₹1,764 cr | ₹1,724 cr | +2.33% | +24.13% |
| Operating profit | ₹355 cr | ₹172 cr | +106.65% | +60.78% |
| Operating margin (%) | 16.77% | 9.07% | — | — |
| Interest | ₹3 cr | ₹4 cr | -30.87% | +92.65% |
| Depreciation | ₹13 cr | ₹12 cr | +5.10% | +29.77% |
| Profit before tax | ₹411 cr | ₹218 cr | +88.66% | +26.98% |
| Tax | ₹108 cr | ₹47 cr | +129.09% | +35.75% |
| Net profit | ₹303 cr | ₹171 cr | +77.55% | +24.14% |
| EPS (₹) | ₹26.47 | ₹14.91 | +77.53% | +24.16% |
Operating margin of 16.77% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +6.87% | +6.11% |
| Next session | +1.93% | — |
| 5 sessions | +7.60% | +6.22% |
| 15 sessions | -6.42% | — |
| 30 sessions | -7.88% | — |
Volume on the results session was 6.83× its 20-day average.
What to watch
- Whether operating margin holds above 16.77% after the Q4FY26 recovery.
- Whether other income remains below its Q4FY25 level of Rs 113.94 cr and its 17.32% share of pre-tax profit changes.