Pakka's margin improves as interest expense jumps 140.04%
Revenue and operating profit more than doubled sequentially, but higher interest costs and a higher tax rate restrained net profit growth.
Filed 31 Oct 2026, 18:04 IST · after market close · Pakka Ltd (PAKKA)
Key takeaways
- Consolidated revenue rose +105.85% sequentially, while operating margin improved 0.54 percentage points to 13.59%.
- Interest expense jumped +140.04% sequentially, limiting profit before tax growth to +48.10% despite operating profit growth of +114.25%.
- Operating margin was 1.64 percentage points below the 15.23% median for 57 Commodities peers that had reported.
Price around the results
Revenue more than doubled, but profit conversion lagged
Pakka reported consolidated revenue growth of +105.85% sequentially, against expense growth of +104.58%, allowing operating profit to rise +114.25%. Profit before tax grew only +48.10% because interest expense increased +140.04% and other income was negative, contributing -1.93% of pre-tax profit. Net profit rose +45.33% to Rs 8.56 cr, while EPS increased +47.29% to Rs 1.90.
Operating margin expanded, with financing costs the main drag
Because revenue grew slightly faster than expenses, operating margin widened by 0.54 percentage points sequentially. The improvement was partly offset below operating profit by interest expense rising from Rs 4.87 cr to Rs 11.69 cr. The tax rate also increased 1.28 percentage points, so net profit grew more slowly than operating profit.
Margin has improved for two straight quarters but remains below peers
Operating margin increased from 8.93% in Q4FY26 to 13.05% in Q1FY27 and 13.59% in Q2FY27, marking a second consecutive quarter of expansion. It remained 1.64 percentage points below the 15.23% median among 57 reported Commodities peers. The results were filed after market close, so there is no post-results market reaction to assess.
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 |
|---|---|---|---|
| Revenue | ₹241 cr | ₹117 cr | +105.85% |
| Other income | ₹-0 cr | ₹2 cr | — |
| Expenses | ₹208 cr | ₹102 cr | +104.58% |
| Operating profit | ₹33 cr | ₹15 cr | +114.25% |
| Operating margin (%) | 13.59% | 13.05% | — |
| Interest | ₹12 cr | ₹5 cr | +140.04% |
| Depreciation | ₹8 cr | ₹4 cr | +98.35% |
| Profit before tax | ₹12 cr | ₹8 cr | +48.10% |
| Tax | ₹4 cr | ₹3 cr | +54.18% |
| Net profit | ₹9 cr | ₹6 cr | +45.33% |
| EPS (₹) | ₹1.90 | ₹1.29 | +47.29% |
Operating margin of 13.59% compares with a Commodities sector median of 15.23% across 57 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 13.59% after two consecutive quarters of expansion.
- Whether interest expense moderates from Rs 11.69 cr after its +140.04% sequential increase.
- Whether the tax rate moves below the current 31.14%.