Marksans margin slips 2.55 points as costs outpace revenue
Revenue rose 11.82% QoQ, but expenses grew 15.63%; higher depreciation and tax also pulled net profit down 9.96%.
Filed 04 Nov 2026, 13:34 IST · Marksans Pharma Ltd (MARKSANS)
Key takeaways
- Consolidated revenue rose +11.82% QoQ, but expenses grew +15.63%, taking operating margin down 2.55 percentage points.
- Net profit fell -9.96% QoQ as depreciation rose +29.16% and the tax rate increased 3.00 percentage points.
- Operating margin at 22.79% remained 1.39 percentage points above the 21.4% Healthcare peer median across 69 reported companies.
Price around the results
Revenue growth did not translate into profit growth
On a consolidated basis, revenue increased +11.82% QoQ, while operating profit rose only +0.59%. Net profit declined -9.96% and EPS fell -10.09%, showing that the additional sales did not convert into earnings. The main gap came from faster cost growth and higher depreciation.
Faster costs and depreciation cut the margin
Depreciation increased +29.16%, while interest expense declined -2.43%, so lower finance costs provided limited offset. The tax rate rose 3.00 percentage points to 25.83%, and other income accounted for 9.38% of pre-tax profit, making reported profit partly dependent on non-operating income.
Margin remains above the Healthcare peer median
Marksans’ 22.79% operating margin was 1.39 percentage points above the 21.4% median for 69 Healthcare peers that had reported the quarter. Sequentially, however, margin fell from 25.34% in Q1FY27, marking a clear deterioration in quarterly operating momentum.
Management points to order book support and overseas initiatives
Management said its order book supports the H2FY27 outlook despite a softer US consumer environment, while US Rx price erosion remained in single digits. The company said Australia and New Zealand momentum is expected to continue, supported by 11 Rx brands launched in FY26 and more than 100 market authorizations. The presentation says Marksans added packaging lines at its Farmingdale facility, launched the Nova Pharma branded prescription division in Australia and New Zealand, and plans to selectively pursue acquisitions.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹940 cr | ₹841 cr | +11.82% |
| Other income | ₹18 cr | ₹25 cr | -28.54% |
| Expenses | ₹726 cr | ₹628 cr | +15.63% |
| Operating profit | ₹214 cr | ₹213 cr | +0.59% |
| Operating margin (%) | 22.79% | 25.34% | — |
| Interest | ₹7 cr | ₹7 cr | -2.43% |
| Depreciation | ₹32 cr | ₹25 cr | +29.16% |
| Profit before tax | ₹194 cr | ₹207 cr | -6.33% |
| Tax | ₹50 cr | ₹47 cr | +5.98% |
| Net profit | ₹144 cr | ₹159 cr | -9.96% |
| EPS (₹) | ₹3.12 | ₹3.47 | -10.09% |
Operating margin of 22.79% compares with a Healthcare sector median of 21.40% across 69 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.
Guidance & outlook
- The company says its strong order book supports the H2FY27 outlook despite a softer US consumer environment.
- The company expects Australia and New Zealand growth momentum to continue, supported by its Rx brands and market authorizations.
Expansion
- The company has added incremental packaging lines at its Farmingdale, USA manufacturing facility.
- Marksans plans to selectively pursue strategic acquisitions to strengthen capabilities and market presence.
New initiatives
- Marksans launched a branded prescription division called Nova Pharma in Australia and New Zealand.
Competition
- Time-Cap Laboratories serves the US region as a leading OTC store-brand supplier to major US retailers.
Problems & risks
- The company reports a softer US consumer environment.
- Price erosion in the US Rx portfolio remained in single digits.
What to watch
- Whether expenses continue to grow faster than revenue after +15.63% versus +11.82% QoQ.
- Whether operating margin recovers from 22.79% toward the 25.34% recorded in Q1FY27.
- Whether depreciation moderates after rising +29.16% QoQ.