Gujarat Energy margin drops 5.69 points as costs outpace revenue
Revenue rose 0.80% sequentially, but a 7.51% increase in expenses and a higher tax rate cut net profit by 51.38%.
Filed 05 Nov 2026, 17:59 IST · after market close · Gujarat Energy Ltd (GUJENERGY)
Key takeaways
- Operating margin fell 5.69 percentage points sequentially to 8.77% as expenses grew 7.51% while revenue rose 0.80%.
- Net profit dropped 51.38% QoQ to Rs 489.77 cr, with the tax rate rising 6.17 percentage points to 30.83%.
- Gujarat Energy's margin was 6.43 percentage points below the 15.20% median of 24 reported Energy peers.
Price around the results
Costs erased sequential operating leverage
This consolidated quarter brought limited revenue momentum, with sales up 0.80% QoQ, while expenses increased 7.51%. The cost growth outpaced revenue and reduced operating profit by 38.86%, taking operating margin down 5.69 percentage points to 8.77%. Interest also rose 5.35% and depreciation increased 2.06%.
Higher tax and lower other income deepened the profit decline
Other income fell 38.63% sequentially and still contributed 19.07% of pre-tax profit, making reported earnings partly dependent on non-operating income. The tax rate rose 6.17 percentage points to 30.83%, adding to the pressure from weaker operating profit. As a result, profit before tax fell 47.04%, while net profit declined 51.38%.
Margin remains among the weakest in the reporting peer set
Gujarat Energy's 8.77% operating margin was 6.43 percentage points below the 15.20% median for 24 Energy peers that had reported the quarter. It ranked fourth from the bottom in that comparison. The results were filed after market close, so there is no market reaction to assess yet.
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 |
|---|---|---|---|
| Revenue | ₹9,621 cr | ₹9,545 cr | +0.80% |
| Other income | ₹135 cr | ₹220 cr | -38.63% |
| Expenses | ₹8,777 cr | ₹8,164 cr | +7.51% |
| Operating profit | ₹844 cr | ₹1,381 cr | -38.86% |
| Operating margin (%) | 8.77% | 14.46% | — |
| Interest | ₹66 cr | ₹63 cr | +5.35% |
| Depreciation | ₹205 cr | ₹201 cr | +2.06% |
| Profit before tax | ₹708 cr | ₹1,337 cr | -47.04% |
| Tax | ₹218 cr | ₹330 cr | -33.79% |
| Net profit | ₹490 cr | ₹1,007 cr | -51.38% |
| EPS (₹) | ₹5.32 | ₹10.67 | -50.14% |
Operating margin of 8.77% compares with a Energy sector median of 15.20% across 24 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.57% | -5.59% |
Volume on the results session was 1.07× its 20-day average.
What to watch
- Whether operating margin recovers from 8.77% after the 5.69-point sequential decline.
- Whether expense growth moderates from 7.51% while revenue growth remains at 0.80%.
- Whether the tax rate moves back from 30.83% and other income's 19.07% share of pre-tax profit changes.