Nava profit doubles YoY, but operating margin falls sequentially
Revenue growth outpaced expenses YoY, while a lower tax rate and higher other income supported the quarter's profit.
Filed 12 Nov 2026, 12:12 IST · Nava Ltd (NAVA)
Key takeaways
- Consolidated net profit rose +127.30% YoY to Rs 403.45 cr as revenue grew faster than expenses and the tax rate fell 16.25 percentage points.
- Quarter-on-quarter operating margin fell 5.31 percentage points because expenses grew +13.05% against revenue growth of +3.34%.
- The stock rose +5.93% initially, an unusual move after results compared with seven declines in its last eight reactions.
Price around the results
Revenue growth lifted profit against last year
Consolidated revenue grew +29.95% YoY while expenses rose +19.47%, allowing operating profit to increase +51.49%. Net profit rose +127.30%, helped by the tax rate falling to 10.90% from 27.15%. The operating margin was 38.14%, still 10.15 percentage points above the 27.99% median for 31 Utilities peers that had reported the quarter.
Sequential margin loss followed faster cost growth
Revenue increased +3.34% QoQ, but expenses grew +13.05%, so operating profit declined -9.29% and operating margin narrowed 5.31 percentage points. This reversed part of the margin rebound from 32.48% in Q4FY26 to 43.45% in Q1FY27, though the latest margin remained above Q2FY26's 32.71%. Interest also rose +40.56% QoQ, adding to the pressure below operating profit.
Lower tax rate and other income improved profit quality
The QoQ tax-rate decline of 19.62 percentage points more than offset the operating-profit decline, lifting net profit +21.22%. Other income accounted for 18.31% of pre-tax profit, so the reported earnings included a meaningful non-operating contribution. Other income also rose +219.16% YoY, making the net-profit increase larger than the operating-profit increase.
Initial market reaction broke the recent pattern
The stock rose +5.93% initially, with volume at 26.82 times the reference level. That compares with only one rise and seven declines across the last eight results reactions, while the median absolute move was 4.78%. The initial gain was therefore larger than the typical move and ran against the stock's recent post-results direction.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,252 cr | ₹1,212 cr | +3.34% | +29.95% |
| Other income | ₹83 cr | ₹57 cr | +45.60% | +219.16% |
| Expenses | ₹775 cr | ₹685 cr | +13.05% | +19.47% |
| Operating profit | ₹478 cr | ₹527 cr | -9.29% | +51.49% |
| Operating margin (%) | 38.14% | 43.45% | — | — |
| Interest | ₹4 cr | ₹2 cr | +40.56% | +25.45% |
| Depreciation | ₹104 cr | ₹101 cr | +2.53% | +10.22% |
| Profit before tax | ₹453 cr | ₹480 cr | -5.52% | +85.57% |
| Tax | ₹49 cr | ₹146 cr | -66.28% | -25.52% |
| Net profit | ₹403 cr | ₹333 cr | +21.22% | +127.30% |
| EPS (₹) | ₹11.14 | ₹9.80 | +13.67% | +143.76% |
Operating margin of 38.14% compares with a Utilities sector median of 27.99% across 31 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +5.93% | +5.75% |
Volume on the results session was 26.82× its 20-day average.
What to watch
- Whether operating margin holds above 38.14% after the 5.31-percentage-point sequential decline.
- Whether expenses continue to grow faster than revenue after the QoQ gap of +13.05% versus +3.34%.
- Whether the tax rate remains near 10.90% and other income remains below or above its 18.31% share of pre-tax profit.