Hatsun profit barely grew as operating margin fell for a fourth quarter
Revenue increased 16.62% year on year, but faster expense growth cut margin by 1.19 percentage points; a lower tax rate limited the profit decline.
Filed 19 May 2026, 17:49 IST · after market close · Hatsun Agro Product Ltd (HATSUN)
Key takeaways
- Standalone net profit rose only 2.52% year on year to Rs 50.89 cr as expenses grew 18.16%, faster than revenue at 16.62%.
- Operating margin fell 1.19 percentage points year on year to 9.13%, marking a fourth consecutive quarterly decline from 14.61% in Q1FY26.
- The stock fell 2.73% five sessions after the results, less than its 4.99% median absolute move after the previous eight results.
Price around the results
Revenue growth did not translate into profit growth
Standalone revenue grew 16.62% year on year, while net profit increased only 2.52%. Profit before tax fell 11.32%, despite interest declining 32.31%, because depreciation rose 20.16% and operating profit grew just 3.20%. Other income contributed only 4.32% of pre-tax profit, so it was not a material support to earnings quality.
Costs compressed margin for the fourth straight quarter
Expenses grew 18.16% year on year against 16.62% revenue growth, narrowing operating margin by 1.19 percentage points. Sequentially, expenses rose 13.84% while revenue increased 11.36%, cutting margin by 1.98 percentage points to 9.13%. Operating margin has declined each quarter from 14.61% in Q1FY26 to 13.89%, 11.11% and 9.13%.
Lower tax rate softened the earnings impact
The tax rate fell to 14.86% from 26.35% a year earlier and from 23.47% in the preceding quarter. This helped net profit rise year on year even as pre-tax profit declined, making the reported profit growth less reflective of operating performance. Sequentially, net profit fell 24.20% as the margin contraction outweighed the lower tax rate.
Margin remains below the reported peer median
Hatsun's 9.13% operating margin was 7.62 percentage points below the 16.75% median for 26 Fast Moving Consumer Goods peers that had reported the same quarter. The company ranked fifth from the bottom on this measure. This places the quarter's margin pressure in a wider sector comparison rather than only against Hatsun's own recent history.
The initial stock reaction was modest but negative
The stock fell 0.53% on the first session after the results and 2.73% over five sessions; it was down 4.61% after 15 sessions. The five-session decline was below the 4.99% median absolute move across the previous eight results, while the reaction coincided with a corporate action and therefore is not attributable to the results alone. The filing was made after market close on 19 May 2026.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,578 cr | ₹2,315 cr | +11.36% | +16.62% |
| Other income | ₹3 cr | ₹2 cr | +4.45% | -69.40% |
| Expenses | ₹2,342 cr | ₹2,058 cr | +13.84% | +18.16% |
| Operating profit | ₹235 cr | ₹257 cr | -8.49% | +3.20% |
| Operating margin (%) | 9.13% | 11.11% | — | — |
| Interest | ₹32 cr | ₹33 cr | -2.45% | -32.31% |
| Depreciation | ₹146 cr | ₹139 cr | +5.09% | +20.16% |
| Profit before tax | ₹60 cr | ₹88 cr | -31.87% | -11.32% |
| Tax | ₹9 cr | ₹21 cr | -56.87% | -50.00% |
| Net profit | ₹51 cr | ₹67 cr | -24.20% | +2.52% |
| EPS (₹) | ₹2.28 | ₹3.01 | -24.25% | +2.24% |
Operating margin of 9.13% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.53% | -0.70% |
| Next session | -2.42% | — |
| 5 sessions | -2.73% | -3.95% |
| 15 sessions | -4.61% | — |
| 30 sessions | -3.82% | — |
Volume on the results session was 4.92× its 20-day average.
What to watch
- Whether operating margin stabilises above 9.13% after four consecutive quarterly declines.
- Whether expenses grow more slowly than revenue after rising 18.16% year on year against revenue growth of 16.62%.
- Whether the tax rate remains close to 14.86% rather than returning toward 26.35%.