Lower tax rate lifted profit despite a flat operating margin
Sequential revenue growth matched expense growth, while other income contributed 35.96% of pre-tax profit and interest costs rose 39.58%.
Filed 03 Nov 2026, 18:00 IST · after market close · Nephrocare Health Services Ltd (NEPHROPLUS)
Key takeaways
- Net profit rose 13.93% sequentially to Rs 14.31 cr as the tax rate fell 9.35 percentage points to 15.39%.
- Revenue and expenses both grew 3.64% sequentially, leaving operating margin almost unchanged at 14.16%.
- Operating margin was 6.58 percentage points below the 20.74% median for 50 reported healthcare peers.
Price around the results
Revenue growth did not improve operating leverage
Nephrocare Health Services reported standalone revenue growth of 3.64% sequentially in Q2FY27, but expenses grew at the same pace. That kept operating margin broadly flat, declining by just 0.01 percentage points to 14.16%.
Tax relief drove the profit increase
Net profit increased 13.93% sequentially even as pre-tax profit grew only 1.32%, because the tax rate fell 9.35 percentage points to 15.39%. Interest expense rose 39.58%, adding pressure below operating profit. Other income accounted for 35.96% of pre-tax profit, so reported profit also depended materially on non-operating income.
Margin remained below the healthcare peer median
Nephrocare's 14.16% operating margin was 6.58 percentage points below the 20.74% median among 50 healthcare peers that had reported the quarter. Sequentially, the margin was virtually unchanged, but the gap to peers remains notable. The company filed these standalone results after market close, so there is no immediate market reaction to assess.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹177 cr | ₹170 cr | +3.64% |
| Other income | ₹6 cr | ₹6 cr | -0.65% |
| Expenses | ₹152 cr | ₹146 cr | +3.64% |
| Operating profit | ₹25 cr | ₹24 cr | +3.60% |
| Operating margin (%) | 14.16% | 14.17% | — |
| Interest | ₹1 cr | ₹0 cr | +39.58% |
| Depreciation | ₹14 cr | ₹13 cr | +3.21% |
| Profit before tax | ₹17 cr | ₹17 cr | +1.32% |
| Tax | ₹3 cr | ₹4 cr | -37.05% |
| Net profit | ₹14 cr | ₹13 cr | +13.93% |
| EPS (₹) | ₹1.42 | ₹1.25 | +13.60% |
Operating margin of 14.16% compares with a Healthcare sector median of 20.74% across 50 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 14.16% after remaining nearly flat sequentially.
- Whether the tax rate remains near 15.39% after falling 9.35 percentage points.
- Whether other income's contribution to pre-tax profit stays below or around 35.96%.