Costs outpaced revenue as Hexagon’s Q1 standalone margin fell 2.08 pp
Revenue grew 2.98% QoQ, but lower other income and faster expense growth drove a 27.88% fall in standalone net profit.
Filed 12 Aug 2026, 20:02 IST · after market close · HEXAGON (HEXAGON)
Key takeaways
- Standalone net profit fell 27.88% QoQ to Rs 9.83 cr after expenses grew 5.47%, faster than revenue at 2.98%.
- Operating margin narrowed 2.08 percentage points to 12.14%, while interest rose 8.06% and the tax rate rose 0.63 percentage points.
- Other income fell 53.17% QoQ to Rs 3.03 cr but still accounted for 22.89% of profit before tax.
Expense growth erased the revenue gain
Standalone revenue increased 2.98% QoQ, but expenses rose 5.47%, cutting operating margin by 2.08 percentage points to 12.14%. Operating profit fell 12.07% and net profit fell 27.88% as other income declined 53.17% to Rs 3.03 cr. Other income still represented 22.89% of profit before tax, so reported profit remained partly dependent on non-operating income.
Higher financing and tax rates added pressure
Interest expense increased 8.06% QoQ, while the tax rate rose 0.63 percentage points to 25.72%. The higher tax rate provided no offset to the operating squeeze, with profit before tax down 27.25% and net profit down 27.88%.
Margin reversed from Q4FY26
The operating margin declined from 14.22% in Q4FY26 to 12.14% in Q1FY27, even as revenue rose to Rs 101.4 cr from Rs 98.47 cr. With Q4FY26 as the prior-quarter reference, this indicates a sequential reversal but does not establish a multi-quarter direction.
Management highlighted D2C expansion and market access
In its investor presentation, management said it plans to scale its direct-to-consumer e-commerce business. The presentation also said affordability, misinformation and regional gaps remain persistent market challenges requiring innovation, education and accessibility initiatives.
Results were filed after market close
The standalone results were filed after market close. The post-results stock response is therefore not assessed here.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹101 cr | ₹98 cr | +2.98% |
| Other income | ₹3 cr | ₹6 cr | -53.17% |
| Expenses | ₹89 cr | ₹84 cr | +5.47% |
| Operating profit | ₹12 cr | ₹14 cr | -12.07% |
| Operating margin (%) | 12.14% | 14.22% | — |
| Interest | ₹1 cr | ₹1 cr | +8.06% |
| Depreciation | ₹1 cr | ₹2 cr | -13.33% |
| Profit before tax | ₹13 cr | ₹18 cr | -27.25% |
| Tax | ₹3 cr | ₹5 cr | -25.60% |
| Net profit | ₹10 cr | ₹14 cr | -27.88% |
| EPS (₹) | ₹0.82 | ₹1.23 | -33.33% |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
New initiatives
- The company plans to scale its direct-to-consumer e-commerce business.
Problems & risks
- The company identifies affordability, misinformation and regional gaps as persistent market challenges.
What to watch
- Whether operating margin recovers from 12.14% after the 2.08 percentage-point QoQ decline.
- Whether expenses grow slower than revenue after rising 5.47% against revenue growth of 2.98%.
- Whether other income remains close to or below Rs 3.03 cr and its 22.89% share of profit before tax.