Nesco margin jumps as expenses fall, but other income drops
Consolidated operating margin rose 7.62 percentage points QoQ, while a 44.66% fall in other income limited net-profit growth to 5.25%.
Filed 23 Oct 2026, 19:10 IST · after market close · NESCO Ltd (NESCO)
Key takeaways
- Consolidated operating margin expanded 7.62 percentage points sequentially to 55.95% as revenue grew 7.86% while expenses fell 8.05%.
- Net profit rose only 5.25% sequentially because the tax rate increased 1.21 percentage points and other income fell 44.66%.
- Other income contributed 17.77% of pre-tax profit, while the stock fell 2.34% in the first session after the after-close filing.
Price around the results
Q2FY27 operating leverage lifted the margin
Nesco’s consolidated revenue rose 7.86% sequentially while expenses declined 8.05%, allowing operating profit to increase 24.86%. This combination lifted operating margin by 7.62 percentage points to 55.95%.
Lower other income diluted the profit conversion
Other income fell 44.66% sequentially and accounted for 17.77% of pre-tax profit, so the reported pre-tax increase was limited to 6.90% despite the operating-profit growth. Lower interest expense, down 23.28%, and lower depreciation, down 9.43%, partly supported pre-tax profit. The tax rate rose 1.21 percentage points, which further restrained net-profit growth to 5.25%.
Margin recovery stands well above the Services peer median
Operating margin improved from 48.33% in Q1FY27 to 55.95% in Q2FY27, marking a clear sequential recovery in the available quarterly trend. Among five Services companies that had reported, Nesco’s margin was 49.48 percentage points above the sector median of 6.47%.
The first market response was negative
After the results were filed after market close, the stock fell 2.34% in the first session, with a 2.05-times volume ratio. It underperformed the market by 3.02% on that session.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹228 cr | ₹212 cr | +7.86% |
| Other income | ₹24 cr | ₹44 cr | -44.66% |
| Expenses | ₹101 cr | ₹109 cr | -8.05% |
| Operating profit | ₹128 cr | ₹102 cr | +24.86% |
| Operating margin (%) | 55.95% | 48.33% | — |
| Interest | ₹6 cr | ₹7 cr | -23.28% |
| Depreciation | ₹11 cr | ₹12 cr | -9.43% |
| Profit before tax | ₹136 cr | ₹127 cr | +6.90% |
| Tax | ₹31 cr | ₹27 cr | +13.00% |
| Net profit | ₹105 cr | ₹100 cr | +5.25% |
| EPS (₹) | ₹14.93 | ₹14.19 | +5.21% |
Operating margin of 55.95% compares with a Services sector median of 6.47% across 5 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.34% | -3.02% |
Volume on the results session was 2.05× its 20-day average.
What to watch
- Whether operating margin holds above 55.95% in the next quarter.
- Whether revenue growth remains ahead of the Q2FY27 pace of 7.86% without expenses rising faster than revenue.
- Whether other income remains a material contributor relative to its 17.77% share of pre-tax profit.