Indus Towers profit slips as costs outpace revenue growth
QoQ momentum improved margins, but the year-on-year cost increase kept net profit below last year's level.
Filed 27 Oct 2026, 19:33 IST · after market close · Indus Towers Ltd (INDUSTOWER)
Key takeaways
- Revenue grew +4.00% YoY, but expenses rose +8.01%, narrowing operating margin by 1.67 percentage points.
- Operating margin recovered 0.61 percentage points QoQ to 55.23% as revenue rose +1.00% while expenses fell -0.36%.
- Net profit fell -2.53% YoY to Rs 1,792.8 cr despite a broadly unchanged 25.65% tax rate and lower interest expense.
Price around the results
Year-on-year cost growth outweighed revenue growth
Indus Towers' consolidated revenue grew +4.00% YoY, while expenses increased +8.01%, limiting operating profit growth to +0.96%. That mismatch reduced operating margin by 1.67 percentage points to 55.23% and pulled net profit down -2.53%. The 25.65% tax rate was only 0.14 percentage points lower than a year earlier, so tax relief was not a material reason for the profit decline.
Sequential improvement came from operating cost control
Revenue rose +1.00% QoQ while expenses fell -0.36%, lifting operating margin by 0.61 percentage points. Lower interest expense, down -6.36% QoQ, also supported the 2.72% increase in profit before tax. Other income contributed 4.40% of pre-tax profit, which was not large enough to be the main explanation for the quarter's earnings movement.
Margin recovered but remains below the year-ago peak
The 55.23% operating margin was an improvement from 54.62% in Q1FY27, interrupting the decline from 56.90% in Q2FY26 through the following quarters. It remains 1.67 percentage points below the year-ago level. Indus Towers was also 27.87 percentage points above the 27.36% median operating margin of six telecommunications peers that had reported the same quarter.
The market response will follow an after-close filing
The consolidated results were filed after market close on 27 October 2026, so there is no immediate share-price response to assess here. After its past eight results, the stock rose twice and fell six times, with a median absolute move of 3.93%, indicating that post-results moves have more often been negative than positive.
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 | YoY |
|---|---|---|---|---|
| Revenue | ₹8,516 cr | ₹8,431 cr | +1.00% | +4.00% |
| Other income | ₹106 cr | ₹121 cr | -12.38% | +28.11% |
| Expenses | ₹3,812 cr | ₹3,826 cr | -0.36% | +8.01% |
| Operating profit | ₹4,703 cr | ₹4,605 cr | +2.13% | +0.96% |
| Operating margin (%) | 55.23% | 54.62% | — | — |
| Interest | ₹455 cr | ₹486 cr | -6.36% | -1.69% |
| Depreciation | ₹1,944 cr | ₹1,894 cr | +2.65% | +7.94% |
| Profit before tax | ₹2,411 cr | ₹2,347 cr | +2.72% | -2.71% |
| Tax | ₹618 cr | ₹602 cr | +2.79% | -3.24% |
| Net profit | ₹1,793 cr | ₹1,746 cr | +2.69% | -2.53% |
| EPS (₹) | ₹6.80 | ₹6.62 | +2.72% | -2.44% |
Operating margin of 55.23% compares with a Telecommunication sector median of 27.36% across 6 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 55.23% after the QoQ recovery.
- Whether expenses remain below revenue growth after rising +8.01% YoY in Q2FY27.
- Whether other income stays near 4.40% of pre-tax profit rather than becoming a larger earnings contributor.