Ideaforge swings to profit as operating margin rebounds in Q2
Revenue grew +33.10% QoQ while expenses rose +12.18%, but other income made up 84.27% of pre-tax profit.
Filed 02 Nov 2026, 20:36 IST · after market close · Ideaforge Technology Ltd (IDEAFORGE)
Key takeaways
- Consolidated revenue grew +33.10% QoQ while expenses rose +12.18%, lifting operating margin by 15.18 percentage points to 18.58%.
- Net profit turned positive at Rs 6.46 cr from a Rs 2.59 cr loss, but other income accounted for 84.27% of pre-tax profit.
- Ideaforge's 18.58% operating margin was 7.05 percentage points above the 11.53% median for 84 Industrials peers.
Price around the results
Revenue growth outpaced costs in the Q2 rebound
Consolidated revenue grew +33.10% QoQ, while expenses increased only +12.18%, taking operating profit from Rs 2.33 cr in Q1FY27 to Rs 16.96 cr. This reversed the previous quarter's Rs 2.59 cr net loss, with net profit reaching Rs 6.46 cr. The improvement was operationally driven, but the quarter also benefited from a lower tax rate and reduced interest costs.
Margin recovery came with a high other-income contribution
Operating margin expanded by 15.18 percentage points QoQ to 18.58% because revenue grew faster than expenses. Interest expense fell -49.02%, partly offsetting a +3.80% rise in depreciation. Profit quality remains a watchpoint: other income represented 84.27% of pre-tax profit, while the tax rate fell by 65.12 percentage points to 13.24%.
Margin was above the reported Industrials peer median
Ideaforge's 18.58% operating margin was 7.05 percentage points above the 11.53% median among 84 Industrials companies that had reported the same quarter. The sequential comparison shows a sharp recovery from Q1FY27's 3.40% margin, rather than a demonstrated multi-quarter trend.
Management links product expansion to future orders
Management said it expects RFPs soon for opportunities cleared by the Defence Acquisition Council and that enhanced financial powers for field commanders are expected to support more consistent procurement activity. The company said it is expanding beyond ISR into combat applications through Air Launched Effects, seeker and loitering munition technologies, and has launched the combat variant of ZOLT. Management also said it is developing a hybrid ZOLT with an internal combustion engine for extended range and endurance.
Results were filed after market close
The consolidated results were filed after market close on 02 Nov 2026. An immediate stock response is therefore not covered here, and there is no reaction-history context to compare against.
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 | ₹91 cr | ₹69 cr | +33.10% |
| Other income | ₹6 cr | ₹2 cr | +221.54% |
| Expenses | ₹74 cr | ₹66 cr | +12.18% |
| Operating profit | ₹17 cr | ₹2 cr | +627.90% |
| Operating margin (%) | 18.58% | 3.40% | — |
| Interest | ₹1 cr | ₹2 cr | -49.02% |
| Depreciation | ₹15 cr | ₹14 cr | +3.80% |
| Profit before tax | ₹7 cr | ₹-12 cr | — |
| Tax | ₹1 cr | ₹-9 cr | — |
| Net profit | ₹6 cr | ₹-3 cr | — |
| EPS (₹) | ₹1.30 | ₹-0.59 | — |
Operating margin of 18.58% compares with a Industrials sector median of 11.53% across 84 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.
Guidance & outlook
- The company expects RFPs soon for opportunities cleared by the Defence Acquisition Council.
- The company expects enhanced financial powers for field commanders to drive higher and more consistent procurement activity.
- The company is focused on converting its developments into new orders, consistent revenue growth and improved profitability.
Expansion
- The company is expanding beyond ISR into combat applications through Air Launched Effects, seeker and loitering munition technologies.
New products
- The company launched the combat variant of ZOLT during the quarter.
New initiatives
- The company is developing a hybrid ZOLT variant with an internal combustion engine for extended range and endurance.
- The company is using field feedback from electronic-warfare-resilient systems to enhance their capabilities for evolving battlefield threats.
What to watch
- Whether operating margin holds above 18.58% after the Q2 rebound.
- Whether other income remains below its 84.27% share of pre-tax profit.
- Whether revenue growth continues to outpace the +12.18% QoQ expense growth seen in Q2FY27.