LMW profit jumps YoY as operating margin slips sharply QoQ
The consolidated result benefited from a lower tax rate, but operating margin was 6.16 percentage points below the Industrials peer median.
Filed 24 Jul 2026, 14:00 IST · LMW Ltd (LMW)
Key takeaways
- Year-on-year revenue grew 24.00%, but operating margin improved only 5.76 percentage points to 1.29% as the business remained below peer profitability.
- Sequential revenue fell 7.76% while expenses declined only 3.48%, compressing operating margin by 4.38 percentage points.
- Other income contributed 56.87% of pre-tax profit, making the Rs 55.52 cr consolidated net profit less reflective of operating earnings.
Price around the results
Revenue growth did not carry through to operating profit
LMW’s consolidated revenue grew 24.00% year-on-year, while expenses rose 17.16%, lifting operating margin by 5.76 percentage points from the loss-making base in Q1FY26. Sequentially, however, revenue fell 7.76% and expenses declined only 3.48%, so operating margin dropped 4.38 percentage points from the Q4FY26 peak. Operating margin at 1.29% was 6.16 percentage points below the 7.45% median for 11 Industrials peers that had reported, placing LMW second from the bottom.
Profit quality remains tied to other income
Other income accounted for 56.87% of pre-tax profit, so the Rs 55.52 cr consolidated net profit was supported materially outside operations. The year-on-year tax-rate decline of 18.26 percentage points also amplified the increase in net profit, while the sequential tax rate rose 4.82 percentage points. With no interest expense reported, the main pressure was at the operating-profit level rather than from financing costs.
Margin has reversed from Q4FY26’s high
The current 1.29% operating margin is well below Q4FY26’s 5.67%, although it is above the -4.47% recorded in Q1FY26. The trend shows a sharp recovery from the year-ago loss, followed by weaker profitability than the prior quarter rather than a continued sequential improvement. This quarter’s margin also matches the 1.29% reported in Q2FY26.
The initial stock reaction was negative but not unusual
LMW shares fell 2.10% on the results date, underperforming the market by 1.67 percentage points, with traded volume at 12.14 times the reference level. The direction is consistent with the stock’s recent results pattern: seven of the past eight reactions were negative. The decline was smaller than the 2.96% median absolute move across those reactions.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹861 cr | ₹933 cr | -7.76% | +24.00% |
| Other income | ₹41 cr | ₹39 cr | +6.11% | +12.05% |
| Expenses | ₹850 cr | ₹880 cr | -3.48% | +17.16% |
| Operating profit | ₹11 cr | ₹53 cr | -78.98% | — |
| Operating margin (%) | 1.29% | 5.67% | — | — |
| Interest | ₹0 cr | ₹0 cr | — | — |
| Depreciation | ₹30 cr | ₹30 cr | -0.46% | +1.79% |
| Profit before tax | ₹72 cr | ₹78 cr | -7.37% | +269.23% |
| Tax | ₹17 cr | ₹14 cr | +17.16% | +105.83% |
| Net profit | ₹56 cr | ₹64 cr | -12.83% | +384.05% |
| EPS (₹) | ₹51.97 | ₹59.61 | -12.82% | +383.89% |
Operating margin of 1.29% compares with a Industrials sector median of 7.45% across 11 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.10% | -1.67% |
Volume on the results session was 12.14× its 20-day average.
What to watch
- Whether operating margin recovers from 1.29% after the 4.38-percentage-point sequential decline.
- Whether revenue momentum improves after the 7.76% sequential fall.
- Whether other income’s 56.87% share of pre-tax profit declines as operating earnings contribute more.