Manappuram's operating margin expands, but higher interest cuts net profit
Standalone revenue growth outpaced expenses, but a 52.87% rise in interest expense pulled profit before tax down 9.60% year on year.
Filed 22 Jul 2026, 15:48 IST · after market close · Manappuram Finance Ltd (MANAPPURAM)
Key takeaways
- Standalone revenue rose 24.07% year on year, while expenses grew only 4.29%, lifting operating margin by 4.39 percentage points.
- Interest expense increased 52.87% year on year, leaving profit before tax down 9.60% and net profit down 9.37% despite higher operating profit.
- The stock fell 3.43% on the first day after the results, versus a 2.52% median absolute move after its past eight results.
Price around the results
Operating growth widened the margin
Standalone revenue increased 24.07% year on year and 12.64% sequentially to Rs 2,157.54 cr. Expenses rose just 4.29% year on year and fell 0.49% sequentially, so operating margin expanded by 4.39 percentage points year on year and 3.05 percentage points sequentially. At 76.85%, the margin was 12.04 percentage points above the 64.81% median for 52 Financial Services peers that had reported the quarter.
Interest absorbed the operating improvement
Interest expense rose 52.87% year on year and 22.06% sequentially, offsetting much of the 31.59% year-on-year and 17.31% sequential increase in operating profit. Profit before tax therefore fell 9.60% year on year and 2.62% sequentially, while net profit declined 9.37% year on year and 1.48% sequentially. Other income was only 1.18% of pre-tax profit, so it did not materially support earnings; the lower sequential tax rate helped modestly, falling by 0.88 percentage points.
Margin recovery continued for a third quarter
Operating margin rose from 72.42% in Q1FY26 to 73.07% in Q2FY26, 73.80% in Q3FY26 and 76.85% in Q4FY26. This is a third consecutive quarter of expansion after the 72.46% recorded in Q4FY25. The improvement in operating performance has not yet translated into higher net profit because interest expense has risen each quarter from Rs 609.54 cr in Q4FY25 to Rs 931.80 cr.
The market reaction was weaker than usual
The stock was nearly flat on the reaction day, at -0.09%, but declined 3.43% by the following session and 2.80% after five sessions. The first-session fall was larger than the 2.52% median absolute move after the company's past eight results, during which the stock declined on all eight occasions. A corporate-action overlap is recorded for this reaction.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,158 cr | ₹1,915 cr | +12.64% | +24.07% |
| Other income | ₹6 cr | ₹7 cr | -10.11% | +104.53% |
| Expenses | ₹499 cr | ₹502 cr | -0.49% | +4.29% |
| Operating profit | ₹1,658 cr | ₹1,413 cr | +17.31% | +31.59% |
| Operating margin (%) | 76.85% | 73.80% | — | — |
| Interest | ₹932 cr | ₹763 cr | +22.06% | +52.87% |
| Depreciation | ₹58 cr | ₹58 cr | +0.03% | +14.87% |
| Profit before tax | ₹497 cr | ₹511 cr | -2.62% | -9.60% |
| Tax | ₹122 cr | ₹130 cr | -5.99% | -10.31% |
| Net profit | ₹376 cr | ₹381 cr | -1.48% | -9.37% |
| EPS (₹) | ₹4.41 | ₹4.50 | -2.00% | -10.00% |
Operating margin of 76.85% compares with a Financial Services sector median of 64.81% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.09% | +0.52% |
| Next session | -3.43% | — |
| 5 sessions | -2.80% | +0.01% |
| 15 sessions | -0.08% | — |
| 30 sessions | +3.43% | — |
Volume on the results session was 0.55× its 20-day average.
What to watch
- Whether standalone operating margin holds above 76.85% next quarter.
- Whether interest expense growth moderates from +52.87% year on year.
- Whether revenue growth remains ahead of expense growth after +24.07% versus +4.29% this quarter.