ICRA's margin improves, but lower other income pulls profit down
Revenue grew 8.87% QoQ and operating margin widened 3.25 percentage points, but other income fell 45.67%, pushing net profit down 7.12%.
Filed 29 Oct 2026, 18:04 IST · after market close · ICRA Ltd (ICRA)
Key takeaways
- Consolidated revenue rose 8.87% QoQ, led by broad-based Ratings activity and R&A growth linked to the Fintellix acquisition.
- Operating margin expanded 3.25 percentage points to 36.97% as revenue grew faster than expenses, but net profit fell 7.12% QoQ.
- Other income contributed 24.16% of pre-tax profit, while the 1.34-percentage-point rise in the tax rate also weighed on profit conversion.
Price around the results
Ratings and R&A drove the revenue increase
Consolidated revenue increased 8.87% QoQ, while expenses rose 3.54%, giving operating profit a 19.37% lift. Management said Ratings growth was broad-based across bank loans, bonds, commercial paper and securitisation; it attributed R&A growth to the Fintellix acquisition, demand for risk and regulatory solutions, and favourable currency movement.
Operating leverage was offset below the operating line
Revenue grew faster than expenses, so operating margin widened 3.25 percentage points to 36.97%. However, other income declined 45.67% QoQ and still represented 24.16% of pre-tax profit, while the tax rate rose 1.34 percentage points; pre-tax profit therefore fell 5.43% and net profit fell 7.12%.
Margin trails the reported financial-services peer median
ICRA's 36.97% operating margin was 22.56 percentage points below the 59.53% median for the 52 Financial Services peers that had reported the quarter. The available trend shows an improvement from 33.72% in Q1FY27, but does not establish a multi-quarter direction.
Management flags platform integration and securitisation activity
Management said the integration of sales, customer support, product and delivery functions has moved R&A towards a unified platform covering risk, data and regulatory solutions. It also said Knowledge Tech remained resilient despite automation-led changes in client demand, and expects FY2027 securitisation volumes of approximately Rs 2.6–2.7 lakh crore. The results were filed after market close, so there is no reported market reaction 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 | ₹178 cr | ₹163 cr | +8.87% |
| Other income | ₹17 cr | ₹32 cr | -45.67% |
| Expenses | ₹112 cr | ₹108 cr | +3.54% |
| Operating profit | ₹66 cr | ₹55 cr | +19.37% |
| Operating margin (%) | 36.97% | 33.72% | — |
| Interest | ₹0 cr | ₹0 cr | -13.33% |
| Depreciation | ₹11 cr | ₹11 cr | +2.18% |
| Profit before tax | ₹72 cr | ₹76 cr | -5.43% |
| Tax | ₹20 cr | ₹20 cr | -0.56% |
| Net profit | ₹52 cr | ₹56 cr | -7.12% |
| EPS (₹) | ₹54.20 | ₹58.36 | -7.13% |
Operating margin of 36.97% compares with a Financial Services sector median of 59.53% across 52 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Revenue growth was broad-based in Ratings, supported by healthy activity across bank loans, bonds, commercial paper and securitisation.
- R&A growth was led by the Fintellix acquisition, steady demand for risk and regulatory solutions and favourable currency movement.
- Integration of sales, customer support, product and delivery functions marked progress toward a unified R&A platform.
Guidance & outlook
- Securitisation volumes in FY2027 are expected to be approximately ₹2.6–2.7 lakh crore.
New initiatives
- Integration of people, processes, go-to-market and products has created a unified R&A platform with integrated risk, data and regulatory solutions.
Problems & risks
- Knowledge Tech remained resilient despite automation-led shifts in client demand.
What to watch
- Whether operating margin holds above 36.97% after the 3.25-percentage-point QoQ expansion.
- Whether other income remains a material contributor after accounting for 24.16% of pre-tax profit.
- Whether FY2027 securitisation activity tracks management's stated Rs 2.6–2.7 lakh crore range.