Lower interest and tax lift IRB profit as margin expands
Consolidated operating margin rose 2.79 percentage points year on year, while net profit growth also benefited from a lower tax rate.
Filed 05 Nov 2026, 13:37 IST · IRB Infrastructure Developers Ltd (IRB)
Key takeaways
- Consolidated operating margin rose 2.79 percentage points year on year as revenue grew +8.34% while expenses rose only +1.95%.
- Net profit increased +84.85% year on year, helped by a 13.56-percentage-point lower tax rate and interest costs falling 14.03%.
- The stock gained +2.38% after the filing, below its 2.86% median absolute reaction but against six declines in its last eight result sessions.
Price around the results
Costs fell faster than revenue sequentially
Year on year, revenue grew +8.34% while expenses increased only +1.95%, driving the 2.79-percentage-point expansion in operating margin. Sequentially, revenue fell 11.24%, but expenses declined faster at 14.44%, lifting margin by 1.66 percentage points. The operating margin was 44.09 percentage points above the 11.50% median for the 178 Industrials peers that had reported.
Lower interest helped, but other income remained material
Profit before tax rose +47.73% year on year as interest costs fell 14.03%, although depreciation increased +25.53%. Other income accounted for 12.31% of pre-tax profit, so a meaningful share of earnings came from below-operating-line income. The year-on-year net profit increase was also flattered by the tax rate falling 13.56 percentage points to 32.44%.
Margin rebound follows a one-quarter setback
Operating margin has risen from 45.35% in Q1FY26 to 55.59% now, but the path has not been linear: it reached 56.19% in Q4FY26 before slipping to 53.93% in Q1FY27. The latest sequential net profit decline of 15.01% reflects the 11.24% revenue drop and a 5.97-percentage-point increase in the tax rate, despite interest costs falling 11.49%.
The market reaction was positive but not unusual in size
The stock rose +2.38% after the results, with trading volume at 3.12 times the reference level. That move was smaller than the 2.86% median absolute reaction after the previous eight results. The direction differed from the recent pattern, in which the stock fell after six of eight result announcements.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,897 cr | ₹2,137 cr | -11.24% | +8.34% |
| Other income | ₹47 cr | ₹35 cr | +33.99% | -3.77% |
| Expenses | ₹842 cr | ₹985 cr | -14.44% | +1.95% |
| Operating profit | ₹1,055 cr | ₹1,153 cr | -8.50% | +14.06% |
| Operating margin (%) | 55.59% | 53.93% | — | — |
| Interest | ₹388 cr | ₹438 cr | -11.49% | -14.03% |
| Depreciation | ₹329 cr | ₹333 cr | -1.30% | +25.53% |
| Profit before tax | ₹385 cr | ₹417 cr | -7.50% | +47.73% |
| Tax | ₹125 cr | ₹110 cr | +13.34% | +4.18% |
| Net profit | ₹260 cr | ₹306 cr | -15.01% | +84.85% |
| EPS (₹) | ₹0.22 | ₹0.25 | -12.00% | -4.35% |
Operating margin of 55.59% compares with a Industrials sector median of 11.50% across 178 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.38% | -0.02% |
Volume on the results session was 3.12× its 20-day average.
What to watch
- Whether operating margin holds above 55.59% after the latest 1.66-percentage-point sequential increase.
- Whether revenue recovers from the latest 11.24% sequential decline.
- Whether the tax rate moves below the current 32.44%, closer to the 26.47% reported in Q1FY27.