LYKALABS margin drops 2.78 points as costs outpace revenue
Consolidated net profit fell 38.05% QoQ, while a negative tax rate and other income equal to 57.94% of PBT softened the reported decline.
Filed 30 Oct 2026, 17:29 IST · after market close · LYKALABS (LYKALABS)
Key takeaways
- Consolidated operating margin fell 2.78 percentage points sequentially to 7.97% as expenses grew +7.73%, faster than revenue at +4.47%.
- Net profit declined -38.05% sequentially to Rs 1.27 cr, despite a lower tax rate of -19.17% that reflected a tax credit.
- Other income contributed 57.94% of consolidated pre-tax profit, making reported earnings more dependent on non-operating income.
Revenue grew, but operating profit fell
LYKALABS reported consolidated revenue growth of +4.47% sequentially, but operating profit declined -22.64% to Rs 3.52 cr. The weaker operating result pushed operating margin down 2.78 percentage points to 7.97% from 10.75% in Q1FY27. Profit before tax fell -45.13% to Rs 1.07 cr.
Higher costs drove the margin compression
Expenses rose +7.73% sequentially, outpacing the +4.47% increase in revenue and explaining the margin decline. Interest increased +0.99% and depreciation rose +1.99%, adding modestly to the pressure below operating profit. Other income was Rs 0.62 cr, equal to 57.94% of pre-tax profit, while the tax rate moved down 14.11 percentage points to -19.17%; the resulting tax credit limited the decline in net profit.
Results were filed after market close
The consolidated results were filed after market close, so there is no market reaction to assess yet. Sequential momentum weakened across key profit measures: operating profit fell -22.64%, profit before tax fell -45.13%, and EPS declined -36.84% to Rs 0.36. This is the first quarter in the supplied trend after Q1FY27, so a multi-quarter direction is not established.
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 | ₹44 cr | ₹42 cr | +4.47% |
| Other income | ₹1 cr | ₹0 cr | +47.62% |
| Expenses | ₹41 cr | ₹38 cr | +7.73% |
| Operating profit | ₹4 cr | ₹5 cr | -22.64% |
| Operating margin (%) | 7.97% | 10.75% | — |
| Interest | ₹1 cr | ₹1 cr | +0.99% |
| Depreciation | ₹2 cr | ₹2 cr | +1.99% |
| Profit before tax | ₹1 cr | ₹2 cr | -45.13% |
| Tax | ₹-0 cr | ₹-0 cr | -100.00% |
| Net profit | ₹1 cr | ₹2 cr | -38.05% |
| EPS (₹) | ₹0.36 | ₹0.57 | -36.84% |
What to watch
- Whether operating margin recovers from 7.97% after the 2.78-percentage-point sequential decline.
- Whether expense growth moderates from +7.73% relative to revenue growth of +4.47%.
- Whether other income remains a large contributor after accounting for 57.94% of pre-tax profit.