Interest, depreciation and tax sharply reduced Q1 earnings conversion
Operating profit of Rs 9.12 cr translated into net profit of Rs 1.84 cr after Rs 4.24 cr depreciation, Rs 1.90 cr interest and a 46.5% tax rate.
Filed 05 Aug 2026, 13:48 IST · HALEOSLABS (HALEOSLABS)
Key takeaways
- Consolidated operating profit of Rs 9.12 cr was reduced to profit before tax of Rs 3.44 cr by Rs 1.90 cr of interest and Rs 4.24 cr of depreciation.
- A 46.5% tax rate further reduced profit before tax of Rs 3.44 cr to net profit of Rs 1.84 cr.
- Operating margin stood at 12.50%, while other income contributed Rs 0.46 cr to the quarter.
Q1 profit conversion was the key issue
The consolidated result shows a wide gap between operating profit of Rs 9.12 cr and net profit of Rs 1.84 cr. Depreciation of Rs 4.24 cr and interest of Rs 1.90 cr together reduced profit before tax to Rs 3.44 cr.
Tax added another layer of pressure
Tax of Rs 1.60 cr absorbed a substantial part of the Rs 3.44 cr profit before tax. The reported tax rate was 46.5%, leaving net profit at Rs 1.84 cr despite operating profit of Rs 9.12 cr.
Operating margin provides the next reference point
The quarter's operating margin was 12.50%, with revenue of Rs 72.94 cr and expenses of Rs 63.82 cr. Other income was Rs 0.46 cr, so the reported result remains primarily tied to operating performance and the financing, depreciation and tax charges below it.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹73 cr |
| Other income | ₹0 cr |
| Expenses | ₹64 cr |
| Operating profit | ₹9 cr |
| Operating margin (%) | 12.50% |
| Interest | ₹2 cr |
| Depreciation | ₹4 cr |
| Profit before tax | ₹3 cr |
| Tax | ₹2 cr |
| Net profit | ₹2 cr |
| EPS (₹) | ₹8.75 |
What to watch
- Whether operating margin holds above 12.50%.
- Whether interest remains near Rs 1.90 cr.
- Whether the tax rate moves below 46.5%.