ISGEC profit jumps as tax rate falls despite revenue dip
Lower expenses, interest and depreciation lifted operating profit, while the tax-rate reduction amplified the sequential rise in net profit.
Filed 04 Nov 2026, 15:26 IST · ISGEC Heavy Engineering Ltd (ISGEC)
Key takeaways
- Consolidated net profit rose 278.23% sequentially to Rs 66.19 cr, helped by a 31.61 percentage-point fall in the tax rate.
- Operating margin widened 1.72 percentage points to 7.96% as expenses fell 8.26% against a 6.55% revenue decline.
- ISGEC's margin was 4.28 percentage points below the 12.24% median for 143 reported Industrials peers.
Price around the results
Lower revenue still produced better operating profit
ISGEC's consolidated revenue fell 6.55% sequentially, but expenses declined faster at 8.26%, allowing operating profit to rise 19.24%. That lifted operating margin by 1.72 percentage points to 7.96%. Interest expense also fell 8.52%, while depreciation declined 43.44%, supporting profit before tax.
Tax reduction amplified the profit increase
The tax rate fell to 35.31% from 66.92% in Q1FY27, a reduction of 31.61 percentage points. This helped net profit rise 278.23%, much faster than the 93.42% increase in profit before tax. Other income was 9.10% of pre-tax profit, so it contributed to earnings but was not the main reason for the quarter's profit increase.
Margin remains below the Industrials peer median
At 7.96%, ISGEC's operating margin was 4.28 percentage points below the 12.24% median among 143 Industrials companies that had reported the quarter. The margin improved from 6.24% in Q1FY27, but the available trend shows only this sequential comparison rather than a longer run of quarters. The company ranked 26th from the bottom on this margin measure.
Shares rose 4.82% on the results day
ISGEC shares gained 4.82% on 4 November, with the stock's move relative to the broader market at 4.19%. Trading volume was 1.05 times the reference level, indicating a modest increase in activity alongside the initial reaction.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹1,850 cr | ₹1,980 cr | -6.55% |
| Other income | ₹9 cr | ₹13 cr | -30.88% |
| Expenses | ₹1,703 cr | ₹1,856 cr | -8.26% |
| Operating profit | ₹147 cr | ₹124 cr | +19.24% |
| Operating margin (%) | 7.96% | 6.24% | — |
| Interest | ₹18 cr | ₹19 cr | -8.52% |
| Depreciation | ₹37 cr | ₹65 cr | -43.44% |
| Profit before tax | ₹102 cr | ₹53 cr | +93.42% |
| Tax | ₹36 cr | ₹35 cr | +2.06% |
| Net profit | ₹66 cr | ₹18 cr | +278.23% |
| EPS (₹) | ₹7.67 | ₹1.22 | +528.69% |
Operating margin of 7.96% compares with a Industrials sector median of 12.24% across 143 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +4.82% | +4.19% |
Volume on the results session was 1.05× its 20-day average.
What to watch
- Whether operating margin holds above 7.96% after the sequential improvement.
- Whether the tax rate remains near 35.31% rather than returning to the Q1FY27 level of 66.92%.
- Whether expenses continue to grow more slowly than revenue after falling 8.26% sequentially.