Revenue rose 22.86%, but faster costs cut operating margin 7.07 points
Consolidated net profit fell 29.69% sequentially, with other income contributing 41.86% of pre-tax profit.
Filed 04 Nov 2026, 13:38 IST · Meghmani Organics Ltd (MOL)
Key takeaways
- Revenue grew 22.86% sequentially, but expenses grew 33.46%, cutting operating margin by 7.07 percentage points to 10.97%.
- Net profit fell 29.69% sequentially as higher interest and a 1.29-percentage-point rise in the tax rate offset the revenue increase.
- Other income contributed 41.86% of pre-tax profit, while operating margin was 2.30 percentage points below the 111-peer Commodities median.
Price around the results
Revenue growth did not translate into operating profit
Meghmani Organics reported consolidated revenue growth of 22.86% from Q1FY27, but operating profit declined 25.30% because expenses rose 33.46%. Operating margin fell from 18.04% to 10.97%, a sequential contraction of 7.07 percentage points. Net profit consequently declined 29.69%.
Cost growth and profit quality weakened the quarter
Costs grew faster than revenue, which was the main reason for the margin decline. Interest expense increased 14.71%, while the tax rate rose 1.29 percentage points to 29.34%. Other income accounted for 41.86% of pre-tax profit, making reported earnings less dependent on operating profit than the headline net profit suggests.
Margin trails sector peers as the company expands its platform
The 10.97% operating margin was 2.30 percentage points below the 13.27% median for the 111 Commodities peers that had reported the same quarter. Management said the company acquired Kilburn Chemicals from the NCLT to enter Titanium Dioxide and has built infrastructure to supply global customers under the China Plus One strategy. The company also said its capex programme is intended to support future growth and improve EBITDA, and targeted a blended EBITDA margin of approximately 14-15%.
Initial market reaction was modestly positive
The stock was up 0.56% at the recorded point on the results date, although it lagged the market by 0.07 percentage points. Trading volume was 2.04 times the reference level. There is no recent reaction history here to establish whether that move was typical for the stock.
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 | ₹667 cr | ₹543 cr | +22.86% |
| Other income | ₹20 cr | ₹12 cr | +68.37% |
| Expenses | ₹594 cr | ₹445 cr | +33.46% |
| Operating profit | ₹73 cr | ₹98 cr | -25.30% |
| Operating margin (%) | 10.97% | 18.04% | — |
| Interest | ₹15 cr | ₹13 cr | +14.71% |
| Depreciation | ₹30 cr | ₹30 cr | +1.64% |
| Profit before tax | ₹48 cr | ₹67 cr | -28.41% |
| Tax | ₹14 cr | ₹19 cr | -25.12% |
| Net profit | ₹34 cr | ₹48 cr | -29.69% |
| EPS (₹) | ₹1.33 | ₹1.90 | -30.00% |
Operating margin of 10.97% compares with a Commodities sector median of 13.27% across 111 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.56% | -0.07% |
Volume on the results session was 2.04× 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 targets a blended EBITDA margin of approximately 14-15%.
Expansion
- The company acquired Kilburn Chemicals Limited from NCLT to enter the Titanium Dioxide segment.
New products
- The MPP recently introduced Flubendamide, Cyfluthrin, Beta Cyfluthrin, Spiromesifen, Pymetrozine, Lambdacyhalothrin and Ethiprole.
New initiatives
- The company built infrastructure to supply global customers under the China Plus One strategy.
- The company has a capex programme intended to drive future growth and improve EBITDA.
Competition
- The MPP gives the company first-mover advantage in competing with multinational companies.
Problems & risks
- Approximately 79% of Titanium Dioxide in India is currently imported.
- The company identifies specialised technical know-how for the sulphate process as a challenge for new players.
What to watch
- Whether operating margin recovers from 10.97% after the 7.07-percentage-point sequential decline.
- Whether expenses grow more slowly than the 33.46% sequential rate.
- Progress toward management's stated blended EBITDA margin target of approximately 14-15%.