Margin improves despite a sequential revenue decline
Lower expenses supported margins, but higher interest and other income contributing 16.99% of pre-tax profit qualify the earnings mix.
Filed 10 Nov 2026, 19:35 IST · after market close · Midwest Ltd (MIDWESTLTD)
Key takeaways
- Consolidated revenue fell 4.85% QoQ, but expenses fell faster at 5.64%, lifting operating margin by 0.63 percentage points.
- Net profit declined 2.55% QoQ as interest cost rose 19.12%, despite a 0.33 percentage-point reduction in the tax rate.
- Other income contributed 16.99% of pre-tax profit, while the 26.10% operating margin was 14.85 percentage points above the 11.25% median for 299 Consumer Discretionary peers.
Price around the results
Revenue eased, but operating profit held up
Midwest Ltd's consolidated revenue declined 4.85% QoQ to Rs 182.54 cr, while operating profit fell only 2.52% to Rs 47.64 cr. The smaller operating-profit decline reflects the fact that expenses dropped 5.64%, faster than revenue. Net profit still fell 2.55% to Rs 30.25 cr.
Lower costs supported margin, but finance costs rose
The faster fall in expenses lifted operating margin by 0.63 percentage points QoQ to 26.10%. Interest cost rose 19.12% to Rs 4.61 cr, which limited the benefit of the operating improvement. Other income was 16.99% of pre-tax profit, so reported earnings included a meaningful non-operating contribution; the tax rate also fell by 0.33 percentage points to 25.86%.
Margin remains well above the sector median
Midwest's 26.10% operating margin was 14.85 percentage points above the 11.25% median among 299 Consumer Discretionary peers that had reported the quarter. The shares fell 1.85% on November 11 after the results were filed after market close, with a 1.60% opening gap lower and a 2.69% relative decline.
Management outlined expansion and return targets
Management said it aims for at least 2.5x revenue growth and 3x profitability growth over the next three to four years, supported by planned capex of Rs 300 cr and a stated 35% ROCE target. The company said Phase II is planned to double Ultra-High-Purity Quartz processing capacity to 606,600 MTPA. Management also said installation of a 1 MW solar power plant is underway and pointed to collaborations with PERMINAS and KMML, along with progress on its Sri Lanka project, as steps in the rare-earth value chain.
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 | ₹183 cr | ₹192 cr | -4.85% |
| Other income | ₹7 cr | ₹6 cr | +16.86% |
| Expenses | ₹135 cr | ₹143 cr | -5.64% |
| Operating profit | ₹48 cr | ₹49 cr | -2.52% |
| Operating margin (%) | 26.10% | 25.47% | — |
| Interest | ₹5 cr | ₹4 cr | +19.12% |
| Depreciation | ₹9 cr | ₹9 cr | +3.27% |
| Profit before tax | ₹41 cr | ₹42 cr | -2.97% |
| Tax | ₹11 cr | ₹11 cr | -4.26% |
| Net profit | ₹30 cr | ₹31 cr | -2.55% |
| EPS (₹) | ₹8.37 | ₹8.58 | -2.45% |
Operating margin of 26.10% compares with a Consumer Discretionary sector median of 11.25% across 299 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.85% | -2.69% |
Volume on the results session was 0.59× its 20-day average.
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 aims for at least 2.5x revenue growth and 3x profitability growth over the next three to four years.
- The company aims to achieve 35% ROCE over the next three to four years.
Expansion
- Phase II expansion is planned to double quartz processing capacity to 606,600 MTPA for Ultra-High-Purity Quartz.
- Installation of a 1 MW solar power plant is underway.
- The company has planned capex of Rs. 300 crore over the next three to four years.
New initiatives
- Collaborations with PERMINAS and KMML and progress on the Sri Lanka project support the company's rare-earth value-chain presence.
What to watch
- Whether operating margin holds above 26.10% after the QoQ improvement.
- Whether interest cost moderates from Rs 4.61 cr.
- Progress on management's planned Rs 300 cr capex and the expansion of quartz capacity to 606,600 MTPA.