NFL margin falls to 2.37% as expenses outpace revenue growth
A tax credit and other income supported Rs 6.12 cr of consolidated profit after the third straight quarterly margin decline.
Filed 11 Nov 2026, 18:40 IST · after market close · National Fertilizer Ltd (NFL)
Key takeaways
- National Fertilizer's consolidated operating margin fell 3.56 percentage points QoQ to 2.37% as expenses grew +34.07% against revenue growth of +29.19%.
- Consolidated net profit was Rs 6.12 cr, but other income equalled +1,003.39% of pre-tax profit and the tax rate was -38.46%.
- The 2.37% operating margin was 10.36 percentage points below the 12.73% median for 138 reported Commodities peers.
Price around the results
Revenue recovery did not cover cost growth
On a consolidated basis, revenue rose +29.19% QoQ, but expenses grew faster at +34.07%, cutting operating profit by -48.25%. Pre-tax profit fell -96.79% and net profit fell -94.60%, showing how quickly the higher cost base eroded the quarter's revenue increase.
Operating margin has declined for three straight quarters
Operating margin narrowed by 3.56 percentage points QoQ, extending the decline from 7.38% in Q4FY26 to 5.93% in Q1FY27 and 2.37% in Q2FY27. Year on year, margin improved by 0.47 percentage points because expenses fell -14.45%, slightly faster than revenue at -14.03%, but interest expense still increased +36.20%.
Reported profit depended on other income and a tax credit
Other income of Rs 44.35 cr was +1,003.39% of the Rs 4.42 cr pre-tax profit, making operating earnings an incomplete measure of the reported result. A tax credit of Rs 1.70 cr, reflected in a -38.46% tax rate, further supported the Rs 6.12 cr net profit.
NFL was well below the reported peer margin
NFL's 2.37% operating margin was 10.36 percentage points below the 12.73% median for 138 Commodities companies that had reported the same quarter, placing it 13th from the bottom. The company filed these consolidated results after market close, so there is no current-session reaction to assess; across the past eight result reactions, moves were split four up and four down, with a median absolute move of 1.44%.
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 | YoY |
|---|---|---|---|---|
| Revenue | ₹5,814 cr | ₹4,500 cr | +29.19% | -14.03% |
| Other income | ₹44 cr | ₹54 cr | -17.72% | — |
| Expenses | ₹5,676 cr | ₹4,234 cr | +34.07% | -14.45% |
| Operating profit | ₹138 cr | ₹267 cr | -48.25% | +7.71% |
| Operating margin (%) | 2.37% | 5.93% | — | — |
| Interest | ₹75 cr | ₹79 cr | -5.96% | +36.20% |
| Depreciation | ₹103 cr | ₹104 cr | -0.16% | +4.45% |
| Profit before tax | ₹4 cr | ₹138 cr | -96.79% | — |
| Tax | ₹-2 cr | ₹24 cr | — | -1445.45% |
| Net profit | ₹6 cr | ₹113 cr | -94.60% | — |
| EPS (₹) | ₹0.12 | ₹2.31 | -94.81% | — |
Operating margin of 2.37% compares with a Commodities sector median of 12.73% across 138 peers that have reported Q2FY27.
What to watch
- Whether operating margin moves back above 2.37% after the decline from 7.38% to 5.93% to 2.37%.
- Whether expenses continue to grow faster than revenue after +34.07% versus +29.19% QoQ.
- Whether reported profit remains dependent on other income contributing +1,003.39% of pre-tax profit and a -38.46% tax rate.