Ipca profit rises 38.78% YoY, but margin slips sequentially
Revenue growth outpaced costs year on year, while higher sequential expenses and tax reduced profit from the previous quarter.
Filed 05 Nov 2026, 13:42 IST · Ipca Laboratories Ltd (IPCALAB)
Key takeaways
- Consolidated net profit rose 38.78% year on year as revenue grew 13.83% and operating margin widened 1.82 percentage points.
- Quarter on quarter, operating margin narrowed 0.87 percentage points because expenses grew 5.56%, faster than revenue at 4.37%.
- Net profit fell 8.24% sequentially as the tax rate rose 2.53 percentage points and other income contributed -0.27% of pre-tax profit.
Price around the results
Year-on-year growth came with better operating leverage
Ipca Laboratories' consolidated revenue grew 13.83% year on year, while expenses increased 11.18%, allowing operating profit to rise 23.59%. Operating margin consequently expanded 1.82 percentage points to 23.14%. The company also remained above the 21.68% median margin of 82 Healthcare peers that had reported the quarter, by 1.46 percentage points.
Sequential margin pressure came from faster cost growth
Revenue increased 4.37% sequentially, but expenses grew 5.56%, narrowing operating margin by 0.87 percentage points. Interest rose 5.81% and depreciation increased 3.34%, adding to the pressure below operating profit. The tax rate climbed 2.53 percentage points to 28.56%, contributing to the 8.24% decline in net profit.
Margin remains above last year but below the June peak
The 23.14% operating margin is 1.82 percentage points above Q2FY26, but below Q1FY27's 24.01%. The quarterly trend shows a recovery from 20.26% in Q4FY26 to 24.01% in Q1FY27, followed by the current sequential decline. Other income was negative at Rs -1.45 cr and represented -0.27% of pre-tax profit, so reported earnings were not supported by this non-operating item.
No current market reaction; recent history has skewed negative
The results have not yet produced a market reaction in the available reporting window. Across the last eight result reactions, the stock fell six times and rose twice, with a median absolute move of 3.05%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,910 cr | ₹2,788 cr | +4.37% | +13.83% |
| Other income | ₹-1 cr | ₹27 cr | — | +95.65% |
| Expenses | ₹2,236 cr | ₹2,119 cr | +5.56% | +11.18% |
| Operating profit | ₹673 cr | ₹670 cr | +0.59% | +23.59% |
| Operating margin (%) | 23.14% | 24.01% | — | — |
| Interest | ₹13 cr | ₹12 cr | +5.81% | -35.90% |
| Depreciation | ₹115 cr | ₹111 cr | +3.34% | +10.82% |
| Profit before tax | ₹545 cr | ₹574 cr | -4.98% | +40.23% |
| Tax | ₹156 cr | ₹149 cr | +4.26% | +44.00% |
| Net profit | ₹389 cr | ₹424 cr | -8.24% | +38.78% |
| EPS (₹) | ₹14.79 | ₹15.84 | -6.63% | +32.76% |
Operating margin of 23.14% compares with a Healthcare sector median of 21.68% across 82 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 23.14% after the sequential decline.
- Whether expenses continue to grow faster than revenue, following +5.56% versus +4.37% sequentially.
- Whether the tax rate moves back from 28.56% toward the prior quarter's 26.03%.