Tax swing cuts Nahar Capital profit despite higher pre-tax earnings
Revenue fell faster than expenses, while other income lifted pre-tax profit but could not offset the move from a tax credit to a 51.51% tax rate.
Filed 30 Oct 2026, 16:55 IST · after market close · Nahar Capital & Financial Services Ltd (NAHARCAP)
Key takeaways
- Consolidated profit before tax rose 11.17% QoQ, but net profit fell 59.64% as the tax rate swung 85.05 percentage points.
- Other income contributed 85.38% of pre-tax profit, making reported earnings heavily dependent on non-operating income.
- Operating margin narrowed 6.43 percentage points QoQ as revenue fell 35.78% while expenses declined only 12.99%.
Price around the results
Higher pre-tax profit did not translate into net profit
In the consolidated results, profit before tax rose 11.17% QoQ even as revenue declined 35.78%, helped by a 32.04% increase in other income. Net profit then fell 59.64% as the tax rate moved from -33.54% in Q1FY27 to 51.51%, an 85.05 percentage-point swing.
Costs fell more slowly than revenue, narrowing the margin
Expenses declined 12.99% QoQ, well short of the 35.78% fall in revenue, which drove operating profit down 40.84%. Operating margin consequently contracted 6.43 percentage points to 75.27%; interest expense fell 21.74%, while depreciation was unchanged.
Operating margin remained above the Financial Services median
Nahar Capital's 75.27% operating margin was 17.97 percentage points above the 57.3% median for the 66 Financial Services peers that had reported the quarter. The available sequential trend shows a decline from 81.7% in Q1FY27, but does not establish a longer multi-quarter direction.
Results were filed after market close
The consolidated results were filed after market close, so the stock's immediate response is not covered here. The next reported quarter will show whether the 85.38% contribution of other income to pre-tax profit and the 51.51% tax rate were sustained.
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 | ₹12 cr | ₹18 cr | -35.78% |
| Other income | ₹48 cr | ₹36 cr | +32.04% |
| Expenses | ₹3 cr | ₹3 cr | -12.99% |
| Operating profit | ₹9 cr | ₹15 cr | -40.84% |
| Operating margin (%) | 75.27% | 81.70% | — |
| Interest | ₹0 cr | ₹0 cr | -21.74% |
| Depreciation | ₹0 cr | ₹0 cr | +0.00% |
| Profit before tax | ₹56 cr | ₹51 cr | +11.17% |
| Tax | ₹29 cr | ₹-17 cr | — |
| Net profit | ₹27 cr | ₹67 cr | -59.64% |
| EPS (₹) | ₹16.26 | ₹40.27 | -59.62% |
Operating margin of 75.27% compares with a Financial Services sector median of 57.30% across 66 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 75.27% after the 6.43 percentage-point sequential decline.
- Whether other income remains as high as 85.38% of pre-tax profit.
- Whether the tax rate moves down from 51.51% after the 85.05 percentage-point sequential swing.