Revenue rose 10.44%, but operating margin fell 1.91 points
Costs grew 12.92% and interest rose 51.72% YoY, pushing net profit down 18.65% despite a lower tax rate.
Filed 13 May 2026, 13:54 IST · Kirloskar Brothers Ltd (KIRLOSBROS)
Key takeaways
- Consolidated revenue grew 10.44% YoY, but expenses grew 12.92%, cutting operating margin by 1.91 percentage points.
- Net profit fell 18.65% YoY as interest rose 51.72% and other income dropped 75.99%.
- The stock fell 5.68% on results day, versus a 3.78% median absolute move after its last eight results.
Price around the results
Revenue growth did not convert into profit
Kirloskar Brothers reported consolidated Q4FY26 revenue growth of 10.44% YoY, but operating profit declined 3.85% because expenses grew faster than revenue. The resulting 1.91-percentage-point margin contraction, along with higher interest and depreciation, pulled profit before tax down 22.07%. The lower 27.35% tax rate partly cushioned net profit, but it still fell 18.65%.
Cost inflation and weaker non-operating income weighed on quality
Interest expense rose 51.72% YoY and depreciation increased 19.49%, adding pressure below operating profit. Other income fell 75.99% and contributed 5.9% of pre-tax profit, so the decline in reported earnings was not driven by a large other-income base in the current quarter. The 3.05-percentage-point reduction in the tax rate provided some support to net profit.
Sequential margin recovery remains below the year-ago level
QoQ revenue rose 26.78% while expenses increased 26.53%, allowing operating margin to improve by 0.18 percentage points. However, net profit fell 10.61% because the tax rate moved from -6.36% in Q3FY26 to 27.35% in Q4FY26, a 33.71-percentage-point increase. Operating margin has recovered from 10.55% in Q2FY26 to 12.88%, but remains below 14.79% in Q4FY25 and the 15.66% median for 71 reported Industrials peers.
The market reaction was weaker than its usual results-day move
The stock declined 5.68% on the results date and was down 4.36% after five sessions, while its relative return at the close was -5.82%. That initial decline was larger than the stock's 3.78% median absolute move across its last eight results, when it fell five times and rose three times.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,415 cr | ₹1,116 cr | +26.78% | +10.44% |
| Other income | ₹9 cr | ₹10 cr | -8.08% | -75.99% |
| Expenses | ₹1,233 cr | ₹974 cr | +26.53% | +12.92% |
| Operating profit | ₹182 cr | ₹142 cr | +28.49% | -3.85% |
| Operating margin (%) | 12.88% | 12.70% | — | — |
| Interest | ₹9 cr | ₹9 cr | +2.33% | +51.72% |
| Depreciation | ₹28 cr | ₹25 cr | +11.90% | +19.49% |
| Profit before tax | ₹154 cr | ₹118 cr | +30.87% | -22.07% |
| Tax | ₹42 cr | ₹-8 cr | — | -29.90% |
| Net profit | ₹112 cr | ₹125 cr | -10.61% | -18.65% |
| EPS (₹) | ₹14.04 | ₹15.65 | -10.29% | -18.70% |
Operating margin of 12.88% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.68% | -5.82% |
| Next session | -3.16% | — |
| 5 sessions | -4.36% | -5.56% |
| 15 sessions | -3.27% | — |
| 30 sessions | +20.22% | — |
Volume on the results session was 2.99× its 20-day average.
What to watch
- Whether operating margin moves back toward 14.79%, the Q4FY25 level.
- Whether expense growth stays below revenue growth after Q4's 26.53% versus 26.78% QoQ.
- Whether the tax rate remains near 27.35% rather than Q3FY26's -6.36%.