Motherson margin slips 2.26 points QoQ as costs outpace revenue
Year-on-year profit growth remained high at 77.48%, but a higher tax rate and a sharp sequential rise in other income shaped the quarter.
Filed 06 Aug 2026, 11:41 IST · Samvardhana Motherson International Ltd (MOTHERSON)
Key takeaways
- Consolidated net profit rose 77.48% year on year, but fell 31.12% sequentially as quarterly momentum weakened.
- Operating margin narrowed 2.26 percentage points sequentially to 8.79% because expenses grew 5.34% against 2.72% revenue growth.
- Other income contributed 16.56% of consolidated profit before tax, making reported earnings less dependent on operating profit alone.
Price around the results
Revenue grew, but quarterly profit momentum reversed
Samvardhana Motherson International’s consolidated revenue increased 16.65% year on year, while operating profit grew faster at 25.95%, helped by costs growing less than revenue over that comparison. Sequentially, revenue rose only 2.72%, and net profit fell 31.12% as operating profit declined 18.32%. The higher quarterly tax rate also added pressure, rising 8.32 percentage points to 29.83%.
Cost growth drove the sequential margin contraction
Expenses grew 5.34% sequentially, almost twice the 2.72% revenue growth, which cut operating margin by 2.26 percentage points. Interest expense fell 2.71% and depreciation fell 0.53%, so the margin decline was primarily an operating-cost issue rather than a financing or depreciation increase. Year on year, the picture was better: revenue grew 16.65% against expense growth of 15.83%, lifting operating margin by 0.65 percentage points.
Margin recovery through FY26 broke in Q1FY27
Operating margin had risen from 8.14% in Q1FY26 to 8.65% in Q2FY26, 9.69% in Q3FY26 and 11.05% in Q4FY26 before falling back to 8.79% this quarter. The margin was also 4.49 percentage points below the 13.28% median for the 97 Consumer Discretionary peers that had reported. Other income accounted for 16.56% of profit before tax, so the quarter’s earnings included a material non-operating contribution.
Past result-day moves have usually been positive
After its last eight results, the stock rose six times and fell twice. The median absolute move was 3.46%, indicating that a result-day move of around that size has been typical for the stock, while the current filing does not yet have a reported market reaction.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹35,244 cr | ₹34,309 cr | +2.72% | +16.65% |
| Other income | ₹254 cr | ₹36 cr | +608.48% | +271.89% |
| Expenses | ₹32,148 cr | ₹30,519 cr | +5.34% | +15.83% |
| Operating profit | ₹3,096 cr | ₹3,791 cr | -18.32% | +25.95% |
| Operating margin (%) | 8.79% | 11.05% | — | — |
| Interest | ₹459 cr | ₹472 cr | -2.71% | +7.98% |
| Depreciation | ₹1,358 cr | ₹1,365 cr | -0.53% | +10.45% |
| Profit before tax | ₹1,533 cr | ₹1,989 cr | -22.95% | +75.82% |
| Tax | ₹457 cr | ₹428 cr | +6.86% | +72.05% |
| Net profit | ₹1,076 cr | ₹1,562 cr | -31.12% | +77.48% |
| EPS (₹) | ₹0.98 | ₹1.42 | -30.99% | +104.17% |
Operating margin of 8.79% compares with a Consumer Discretionary sector median of 13.28% across 97 peers that have reported Q1FY27.
What to watch
- Whether operating margin recovers from 8.79% after the fall from 11.05% in Q4FY26.
- Whether expense growth moves below revenue growth after the latest 5.34% versus 2.72% gap.
- Whether other income remains a material contributor after accounting for 16.56% of profit before tax.