Net profit rebounds as operating margin returns to 77.58%
Revenue growth outpaced expenses, but a 40.46% YoY rise in interest limited the increase in pre-tax profit to 9.12%.
Filed 23 Jul 2026, 16:06 IST · after market close · Motilal Oswal Financial Services Ltd (MOTILALOFS)
Key takeaways
- Consolidated net profit rose 9.53% year on year to Rs 1,273.70 cr, but profit growth lagged the 25.16% rise in revenue.
- Operating margin narrowed 5.33 percentage points year on year to 57.49% as expenses grew 43.12%, faster than revenue.
- The stock fell 7.26% after the results, an unusually large move versus its 3.18% median reaction to the past eight result announcements.
Price around the results
Revenue growth restored profit after Q4 loss
Motilal Oswal Financial Services reported consolidated net profit of Rs 1,273.70 cr in Q1FY27, against a loss of Rs 219.11 cr in Q4FY26 and profit of Rs 1,162.87 cr a year earlier. Revenue grew 25.16% year on year and 28.01% sequentially, but the year-on-year increase in profit was limited to 9.53% because costs and interest rose faster.
Costs and interest diluted operating leverage
Operating margin expanded 49.83 percentage points sequentially as expenses fell 41.07% from the unusually high Q4FY26 base. Year on year, however, expenses grew 43.12% against 25.16% revenue growth, narrowing the margin by 5.33 percentage points. Interest expense also rose 40.46% year on year, while the 16.96% tax rate was only 0.72 percentage points lower; other income contributed just 0.42% of pre-tax profit, so it did not materially support earnings quality.
Margin remains below last year and sector median
The margin path has been volatile: 62.82% in Q1FY26, 45.42% in Q2FY26, 52.35% in Q3FY26, 7.66% in Q4FY26 and 57.49% in Q1FY27. The latest margin was 5.19 percentage points below the 62.68% median for the 60 Financial Services peers that had reported the same quarter. The sequential rebound therefore reflects recovery from Q4FY26 rather than a return to the year-ago margin level.
Shares fell more than their usual post-results move
The stock declined 7.26% on the first trading day after the results and was down 9.39% after five sessions, with first-day volume at 19.84 times its average. The eight-result history shows five rises and three declines, with a median absolute reaction of 3.18%, making this decline unusually large for the stock.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,426 cr | ₹2,676 cr | +28.01% | +25.16% |
| Other income | ₹6 cr | ₹16 cr | -59.69% | -54.31% |
| Expenses | ₹1,456 cr | ₹2,471 cr | -41.07% | +43.12% |
| Operating profit | ₹1,970 cr | ₹205 cr | +861.35% | +14.54% |
| Operating margin (%) | 57.49% | 7.66% | — | — |
| Interest | ₹414 cr | ₹388 cr | +6.84% | +40.46% |
| Depreciation | ₹28 cr | ₹28 cr | +0.87% | +6.69% |
| Profit before tax | ₹1,534 cr | ₹-194 cr | — | +8.58% |
| Tax | ₹260 cr | ₹25 cr | +954.91% | +4.16% |
| Net profit | ₹1,274 cr | ₹-219 cr | — | +9.53% |
| EPS (₹) | ₹21.15 | ₹-3.69 | — | +9.08% |
Operating margin of 57.49% compares with a Financial Services sector median of 62.68% across 60 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -7.26% | -6.84% |
| Next session | -7.55% | — |
| 5 sessions | -9.39% | -11.54% |
Volume on the results session was 19.84× its 20-day average.
What to watch
- Whether operating margin remains above 57.49% after the Q1FY27 rebound.
- Whether year-on-year expense growth moderates from 43.12%.
- Whether interest-cost growth eases from 40.46% year on year.