NLC India's profit jumps on tax benefit as operating margin slips
Revenue grew 13.26% YoY, but expenses rose 21.09%; the stock's 8.97% rise was above its usual post-results move.
Filed 04 Nov 2026, 14:03 IST · NLC India Ltd (NLCINDIA)
Key takeaways
- Consolidated net profit rose 83.22% YoY to Rs 1328.01 cr despite a 59.51% fall in profit before tax, helped by a -291.66% tax rate.
- Operating margin narrowed 4.6 percentage points YoY to 28.9% as expenses grew 21.09%, faster than revenue growth of 13.26%.
- The stock gained 8.97%, well above its 3.32% median absolute move after the past eight results.
Price around the results
Costs outpaced revenue in the consolidated business
NLC India's consolidated revenue was nearly flat sequentially, rising 0.33%, while expenses increased 3.67%; operating margin consequently fell 2.3 percentage points to 28.9%. The YoY gap was wider, with expenses growing 21.09% against revenue growth of 13.26%, cutting margin by 4.6 percentage points. Interest expense also rose 14.51% QoQ and 51.31% YoY, adding to the pressure below operating profit.
Tax benefit drove the reported profit increase
Profit before tax fell 48.48% QoQ and 59.51% YoY to Rs 296.0 cr, but net profit rose 204.36% QoQ and 83.22% YoY because tax was a benefit of Rs 863.31 cr. The -291.66% tax rate was therefore a major reason net profit increased despite weaker pre-tax earnings. Other income of Rs 94.31 cr accounted for 31.86% of pre-tax profit, making the earnings mix less dependent on operating performance than the net-profit figure suggests.
Margin has declined for two straight quarters and trails utilities peers
Operating margin fell from 35.19% in Q4FY26 to 31.2% in Q1FY27 and 28.9% in Q2FY27, marking a second consecutive quarterly decline. NLC India's margin was 13.44 percentage points below the 42.34% median for the 19 Utilities peers that had reported, placing it 8th from the bottom.
The market reaction was unusually large for NLC India
The stock gained 8.97% on the results reaction, with trading volume at 7.55 times its reference level. That move was above the 3.32% median absolute move across the past eight results. The prior reactions were evenly split, with four rises and four declines, so the history does not show a consistent direction.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,732 cr | ₹4,717 cr | +0.33% | +13.26% |
| Other income | ₹94 cr | ₹151 cr | -37.61% | -43.99% |
| Expenses | ₹3,365 cr | ₹3,245 cr | +3.67% | +21.09% |
| Operating profit | ₹1,368 cr | ₹1,471 cr | -7.04% | -2.29% |
| Operating margin (%) | 28.90% | 31.20% | — | — |
| Interest | ₹438 cr | ₹382 cr | +14.51% | +51.31% |
| Depreciation | ₹729 cr | ₹666 cr | +9.40% | +32.96% |
| Profit before tax | ₹296 cr | ₹575 cr | -48.48% | -59.51% |
| Tax | ₹-863 cr | ₹215 cr | — | — |
| Net profit | ₹1,328 cr | ₹436 cr | +204.36% | +83.22% |
| EPS (₹) | ₹9.96 | ₹3.49 | +185.39% | +90.44% |
Operating margin of 28.90% compares with a Utilities sector median of 42.34% across 19 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +8.97% | +8.35% |
Volume on the results session was 7.55× its 20-day average.
What to watch
- Whether consolidated operating margin recovers from 28.9% after two consecutive quarterly declines.
- Whether expense growth moderates from 21.09% YoY relative to revenue growth of 13.26%.
- Whether net profit remains aligned with pre-tax earnings after the -291.66% tax rate in Q2FY27.