Laxmi Organic revenue rises, but faster cost growth cuts operating margin
Revenue grew 11.81% sequentially, while expenses rose 14.13%; the tax-rate decline could not offset weaker operating profit and higher interest.
Filed 05 Nov 2026, 20:12 IST · after market close · Laxmi Organic Industries Ltd (LXCHEM)
Key takeaways
- Consolidated revenue grew 11.81% quarter on quarter to Rs 1,082.73 cr, but expenses rose faster at 14.13%.
- Operating margin narrowed 1.83 percentage points to 9.98% as higher interest, depreciation and costs reduced profit quality.
- Net profit fell 15.82% to Rs 57.01 cr despite a 2.67-percentage-point decline in the tax rate.
Price around the results
Revenue growth did not translate into higher operating profit
Laxmi Organic reported consolidated revenue growth of 11.81% quarter on quarter in Q2FY27, while operating profit declined 5.53%. The company said it saw double-digit volume and revenue growth across its portfolio, and that supply-chain disruptions were managed to maintain material availability. The results were filed after market close.
Costs and financing weighed on the quarter
Expenses grew 14.13%, faster than revenue, narrowing operating margin by 1.83 percentage points to 9.98%. Management said higher energy and freight costs affected margins, while higher realisations, cost pass-through and operating leverage provided support; it also said feedstock increases could not be passed on immediately to contract customers. Interest expense rose 128.60% sequentially and depreciation increased 23.91%, while the tax rate fell 2.67 percentage points to 23.53%.
Margin remained below the reported commodities-peer median
Laxmi Organic's 9.98% operating margin was 2.87 percentage points below the 12.85% median for 126 commodities peers that had reported the same quarter. Sequentially, this was a deterioration from the 11.81% margin in Q1FY27; the available trend shows one quarter of comparison rather than a longer decline sequence. Other income contributed 4.39% of pre-tax profit, so it was not the main driver of earnings.
Dahej ramp-up and capacity additions are management's focus
Management said Ethyl Acetate capacity at Lote had stabilised and new Diketene capacity at Dahej had been commissioned. The company said Dahej ramp-up would support operating leverage and that it planned to stabilise and ramp up Dahej Phase II, commission Project Vaayu and expand its green-energy base. Management also said the operating environment would remain volatile and that it planned to intensify customer engagement and focus on long-term partnerships.
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 | ₹1,083 cr | ₹968 cr | +11.81% |
| Other income | ₹3 cr | ₹3 cr | -4.94% |
| Expenses | ₹975 cr | ₹854 cr | +14.13% |
| Operating profit | ₹108 cr | ₹114 cr | -5.53% |
| Operating margin (%) | 9.98% | 11.81% | — |
| Interest | ₹10 cr | ₹4 cr | +128.60% |
| Depreciation | ₹27 cr | ₹22 cr | +23.91% |
| Profit before tax | ₹75 cr | ₹92 cr | -18.76% |
| Tax | ₹18 cr | ₹24 cr | -27.04% |
| Net profit | ₹57 cr | ₹68 cr | -15.82% |
| EPS (₹) | ₹2.06 | ₹2.44 | -15.57% |
Operating margin of 9.98% compares with a Commodities sector median of 12.85% across 126 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company reported strong double-digit volume and revenue growth across its portfolio in Q2 FY27.
- Supply chain disruptions were managed to ensure timely material availability.
Guidance & outlook
- The company expects continued volatility across the broader operating environment.
- The company plans to intensify customer engagement and focus on long-term partnerships.
Expansion
- Ethyl Acetate capacity at Lote stabilized and new Diketene capacity at Dahej was commissioned.
- The company said Dahej ramp-up would lead to operating leverage.
- The company plans to stabilize and ramp up Dahej Phase II.
- The company plans to commission Project Vaayu.
New initiatives
- The company plans to expand its green energy base.
Problems & risks
- Geopolitical disturbances kept markets volatile and affected feedstock prices and the supply chain.
- Higher energy and freight costs affected margins, although higher realizations, cost pass-through and operating leverage supported margin growth.
- Feedstock price increases could not be immediately passed on to contract customers.
What to watch
- Whether operating margin recovers from 9.98% after the 1.83-percentage-point sequential decline.
- Whether expense growth of 14.13% moderates relative to revenue growth of 11.81%.
- Whether Dahej ramp-up supports operating leverage and improves on the 9.98% margin.