Costs outpace revenue as KRN margin drops 4.17 points QoQ
Net profit rose 9.76% as other income contributed 16.33% of pre-tax profit and the tax rate fell 1.04 percentage points.
Filed 29 Oct 2026, 16:45 IST · after market close · KRN Heat Exchanger and Refrigeration Ltd (KRN)
Key takeaways
- Consolidated revenue grew 26.48% QoQ, but expenses grew faster at 33.03%, cutting operating margin by 4.17 percentage points.
- Net profit rose 9.76% QoQ even as operating profit fell 0.63%, helped by a 1.04-percentage-point reduction in the tax rate.
- KRN's 15.27% operating margin was 3.19 percentage points above the 12.08% median for 61 Industrials peers that had reported.
Price around the results
Revenue growth did not translate into operating profit
KRN's consolidated revenue increased 26.48% QoQ to Rs 319.14 cr, but operating profit fell 0.63% to Rs 48.75 cr. Expenses rose 33.03%, outpacing revenue growth and reducing operating margin from 19.44% in Q1FY27 to 15.27%.
Other income and tax supported net profit
Net profit increased 9.76% QoQ to Rs 36.11 cr despite the decline in operating profit. Other income rose 169.42% to Rs 7.49 cr and accounted for 16.33% of pre-tax profit, while the tax rate fell from 22.29% to 21.25%. This makes the net-profit increase less reflective of operating performance than the headline growth suggests.
Margin remains above the Industrials peer median
KRN's 15.27% operating margin was 3.19 percentage points above the 12.08% median among 61 Industrials companies that had reported the quarter. The available quarterly trend shows a decline from 19.44% in Q1FY27, so the key change was margin contraction despite faster sequential revenue growth.
Results were filed after market close
The consolidated results were filed after market close on 29 October 2026. No post-filing share-price reaction is covered here.
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 |
|---|---|---|---|
| Revenue | ₹319 cr | ₹252 cr | +26.48% |
| Other income | ₹7 cr | ₹3 cr | +169.42% |
| Expenses | ₹270 cr | ₹203 cr | +33.03% |
| Operating profit | ₹49 cr | ₹49 cr | -0.63% |
| Operating margin (%) | 15.27% | 19.44% | — |
| Interest | ₹3 cr | ₹3 cr | +0.33% |
| Depreciation | ₹7 cr | ₹6 cr | +13.14% |
| Profit before tax | ₹46 cr | ₹42 cr | +8.34% |
| Tax | ₹10 cr | ₹9 cr | +3.28% |
| Net profit | ₹36 cr | ₹33 cr | +9.76% |
| EPS (₹) | ₹5.52 | ₹5.20 | +6.15% |
Operating margin of 15.27% compares with a Industrials sector median of 12.08% across 61 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 15.27% after the 4.17-percentage-point QoQ decline.
- Whether expense growth falls below the 33.03% recorded in Q2FY27 and moves closer to revenue growth of 26.48%.
- Whether other income remains below its 16.33% contribution to pre-tax profit.