IndoStar's 43.82% margin trails the sector median in Q1FY27
Interest of Rs 144.38 cr absorbed most of operating profit, leaving consolidated pre-tax profit at Rs 11.48 cr.
Filed 29 Jul 2026, 14:59 IST · Indostar Capital Finance Ltd (INDOSTAR)
Key takeaways
- Consolidated operating margin was 43.82%, 19.19 percentage points below the 63.01% median for 31 reported Financial Services peers.
- Interest of Rs 144.38 cr and depreciation of Rs 6.44 cr reduced operating profit of Rs 159.45 cr to profit before tax of Rs 11.48 cr.
- The 0.09% tax rate did not materially flatter earnings: net profit of Rs 11.47 cr was nearly the same as pre-tax profit.
Price around the results
Interest costs left little operating profit below the line
IndoStar's consolidated operating profit of Rs 159.45 cr was reduced by Rs 144.38 cr of interest and Rs 6.44 cr of depreciation, leaving profit before tax at Rs 11.48 cr. Other income contributed Rs 2.85 cr, so earnings were not primarily supported by non-operating income. The 0.09% tax rate meant tax had little effect on the conversion of pre-tax profit into net profit of Rs 11.47 cr.
Operating margin ranked ninth from the bottom among 31 peers
The company's 43.82% operating margin was 19.19 percentage points below the 63.01% median for the 31 Financial Services peers that had reported the quarter. IndoStar ranked ninth from the bottom on this measure, placing its operating spread below the sector comparison set.
Management highlights Micro LAP expansion and automation targets
Management said IndoStar intends to expand its Micro LAP business into more states. The company said its target is to enable straight-through processing for Car and SCV loans by March 2027. The presentation also said IndoStar established a data science practice in FY26 spanning sourcing, underwriting, monitoring, collections and fraud intelligence.
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 | ₹364 cr |
| Other income | ₹3 cr |
| Expenses | ₹204 cr |
| Operating profit | ₹159 cr |
| Operating margin (%) | 43.82% |
| Interest | ₹144 cr |
| Depreciation | ₹6 cr |
| Profit before tax | ₹11 cr |
| Tax | ₹0 cr |
| Net profit | ₹11 cr |
| EPS (₹) | ₹0.71 |
Operating margin of 43.82% compares with a Financial Services sector median of 63.01% across 31 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Targeted straight-through processing for Car and SCV is enabled by March 2027.
Expansion
- IndoStar intends to expand Micro LAP into more states.
New initiatives
- IndoStar established its data science practice in FY26 across sourcing, underwriting, monitoring, collections and fraud intelligence.
What to watch
- Whether operating margin remains at or above 43.82% in the next reported quarter.
- Whether profit before tax improves from Rs 11.48 cr as interest costs are tracked against operating profit of Rs 159.45 cr.
- Whether the company reports straight-through processing for Car and SCV loans as enabled by March 2027, its stated target.