NLC India's operating profit rose, but tax normalisation cut net profit
Year-on-year operating improvement was offset by a 37.47% tax rate and a sequential margin decline as revenue fell faster than expenses.
Filed 07 Aug 2026, 16:23 IST · after market close · NLC India Ltd (NLCINDIA)
Key takeaways
- Consolidated revenue grew 23.29% year on year, while operating profit rose 57.41% as expenses grew 12.26%.
- Net profit fell 48.01% year on year because the 37.47% tax rate replaced a prior-year tax credit.
- Operating margin declined 3.99 percentage points sequentially to 31.2% as revenue fell 6.46% while expenses declined only 0.69%.
Price around the results
Operating profit improved sharply against last year
NLC India's consolidated revenue rose 23.29% year on year, while expenses grew 12.26%, lifting operating profit 57.41%. Operating margin expanded 6.77 percentage points from Q1FY26. The year-on-year comparison is more informative here because the prior period included a tax credit that inflated reported profit.
Sequential margin loss points to weaker operating momentum
Revenue declined 6.46% sequentially, but expenses fell only 0.69%, so operating margin narrowed 3.99 percentage points. Interest expense also increased 4.89% sequentially, adding to the pressure below operating profit. The margin had risen from 24.43% in Q1FY26 to 35.19% in Q4FY26 before this quarter's pullback.
Tax normalisation and other income affect profit quality
Net profit fell 48.01% year on year despite higher operating profit because the tax rate moved from a negative 63.46% to 37.47%; the prior-year tax credit had boosted earnings. Other income contributed 26.31% of pre-tax profit, so reported profit also had a material non-operating component. Sequentially, the tax rate rose 33.31 percentage points from 4.16%, driving much of the 70.55% decline in net profit.
Margin was close to the Utilities peer median
NLC India's 31.2% operating margin was 0.39 percentage points below the 31.59% median among 20 Utilities peers that had reported the quarter. The stock reaction is not yet available because the consolidated results were filed after market close. After its last eight results, the stock rose four times and fell four times, with a median absolute move of 3.08%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,717 cr | ₹5,042 cr | -6.46% | +23.29% |
| Other income | ₹151 cr | ₹155 cr | -2.36% | -47.93% |
| Expenses | ₹3,245 cr | ₹3,268 cr | -0.69% | +12.26% |
| Operating profit | ₹1,471 cr | ₹1,774 cr | -17.08% | +57.41% |
| Operating margin (%) | 31.20% | 35.19% | — | — |
| Interest | ₹382 cr | ₹364 cr | +4.89% | +27.89% |
| Depreciation | ₹666 cr | ₹695 cr | -4.15% | +23.47% |
| Profit before tax | ₹575 cr | ₹870 cr | -33.97% | +48.47% |
| Tax | ₹215 cr | ₹36 cr | +494.70% | — |
| Net profit | ₹436 cr | ₹1,481 cr | -70.55% | -48.01% |
| EPS (₹) | ₹3.49 | ₹10.05 | -65.27% | -42.31% |
Operating margin of 31.20% compares with a Utilities sector median of 31.59% across 20 peers that have reported Q1FY27.
What to watch
- Whether operating margin recovers from 31.2% after the 3.99-percentage-point sequential decline.
- Whether the tax rate remains near or below 37.47% rather than repeating the prior year's negative 63.46% rate.
- Whether other income remains close to 26.31% of pre-tax profit.