Motherson profit jumps 44%, but margin remains below sector median
Revenue growth stayed strong year on year, while higher interest and a second straight quarterly margin decline limited operating leverage.
Filed 05 Nov 2026, 14:58 IST · Samvardhana Motherson International Ltd (MOTHERSON)
Key takeaways
- Consolidated revenue rose +26.87% year on year, while operating margin improved only 0.12 percentage points to 8.77%.
- Net profit increased +43.98% year on year, helped by a 3.05-percentage-point fall in the tax rate and other income equal to 15.94% of pre-tax profit.
- The stock rose 5.34% after the results, above its 3.46% median absolute move after the previous eight results.
Price around the results
Revenue growth accelerated without a matching margin lift
Consolidated revenue grew +26.87% year on year and +8.61% sequentially to Rs 38,279.85 cr. Operating profit rose +28.59% year on year, but the margin expanded only 0.12 percentage points to 8.77%, as operating costs grew almost in line with revenue. Sequentially, expenses grew +8.63% against revenue growth of +8.61%, leaving the margin down 0.02 percentage points.
Higher interest and tax effects shaped profit growth
Interest expense increased +35.76% year on year and +14.33% sequentially, putting pressure below operating profit. Net profit still rose +43.98% year on year, helped by the tax rate falling 3.05 percentage points to 28.59%; the sequential tax-rate decline was 1.24 percentage points. Other income contributed 15.94% of pre-tax profit, so reported profit included a meaningful non-operating component.
Operating margin has declined for two straight quarters
The operating margin fell from 11.05% in Q4FY26 to 8.79% in Q1FY27 and 8.77% in Q2FY27. This is a second consecutive quarterly decline, even though the year-on-year margin remains marginally higher. At 8.77%, Motherson was 2.79 percentage points below the 11.56% median operating margin of 262 Consumer Discretionary peers that had reported the quarter.
Initial market response was stronger than Motherson's usual move
The stock rose 5.34% on the results day, with a 1.04% opening gap and a 10.45-times volume ratio. This was above the 3.46% median absolute move recorded after the previous eight results, during which the stock rose six times and fell twice.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹38,280 cr | ₹35,244 cr | +8.61% | +26.87% |
| Other income | ₹272 cr | ₹254 cr | +7.07% | +17.82% |
| Expenses | ₹34,923 cr | ₹32,148 cr | +8.63% | +26.70% |
| Operating profit | ₹3,357 cr | ₹3,096 cr | +8.43% | +28.59% |
| Operating margin (%) | 8.77% | 8.79% | — | — |
| Interest | ₹525 cr | ₹459 cr | +14.33% | +35.76% |
| Depreciation | ₹1,399 cr | ₹1,358 cr | +3.01% | +14.89% |
| Profit before tax | ₹1,705 cr | ₹1,533 cr | +11.23% | +37.84% |
| Tax | ₹488 cr | ₹457 cr | +6.63% | +24.57% |
| Net profit | ₹1,218 cr | ₹1,076 cr | +13.19% | +43.98% |
| EPS (₹) | ₹1.11 | ₹0.98 | +13.27% | +42.31% |
Operating margin of 8.77% compares with a Consumer Discretionary sector median of 11.56% across 262 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +5.34% | +2.93% |
Volume on the results session was 10.45× its 20-day average.
What to watch
- Whether operating margin moves back above 8.77% after two consecutive quarterly declines.
- Whether interest expense growth moderates from +14.33% sequentially.
- Whether other income remains close to 15.94% of pre-tax profit.