PAKKA's 8.93% operating margin leaves profit reliant on other income
Interest and depreciation absorbed much of operating profit, while management flagged plant losses and a one-time inventory clean-up.
Filed 14 Aug 2026, 15:48 IST · after market close · PAKKA (PAKKA)
Key takeaways
- Consolidated operating margin was 8.93%, with operating profit of Rs 9.06 cr.
- Interest of Rs 3.85 cr and depreciation of Rs 4.12 cr reduced operating profit to profit before tax of Rs 4.74 cr.
- Other income of Rs 3.64 cr was close to profit before tax, while the 35.31% tax rate brought net profit to Rs 3.07 cr.
Operating profit was heavily reduced below the operating line
PAKKA reported consolidated revenue of Rs 101.43 cr and operating profit of Rs 9.06 cr, leaving an operating margin of 8.93%. Interest of Rs 3.85 cr and depreciation of Rs 4.12 cr together absorbed most of operating profit, reducing profit before tax to Rs 4.74 cr. Other income of Rs 3.64 cr was close to profit before tax, making reported earnings materially dependent on non-operating income.
Management linked the business reset to plant losses and inventory clean-up
Management said the company recorded plant-level operating losses during a transition year and was clearing old or slow-moving stock at a discount. It also said inventory and packaging write-offs formed part of a one-time clean-up, while cost optimisation and a better product mix at PM1 and PM2 are planned. The presentation flags a planned 40-day PM3 shutdown for modification in June 2026, along with plans to ramp up OGR to 500 and increase production by 10 TPD.
Expansion plans include US market entry and new product categories
Management said it plans to tap the US market, launch new grades and introduce new product categories. The company also said it plans to raise the contribution from PM1 and PM2 through product mix changes. The results were filed after market close, and there is no reported market reaction yet.
Q4FY26 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q4FY26 |
|---|---|
| Revenue | ₹101 cr |
| Other income | ₹4 cr |
| Expenses | ₹92 cr |
| Operating profit | ₹9 cr |
| Operating margin (%) | 8.93% |
| Interest | ₹4 cr |
| Depreciation | ₹4 cr |
| Profit before tax | ₹5 cr |
| Tax | ₹2 cr |
| Net profit | ₹3 cr |
| EPS (₹) | ₹0.68 |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company plans to ramp up OGR to 500.
- Production is planned to increase by 10 TPD.
Expansion
- PM3 will be shut for 40 days for modification in June 2026.
- The company plans to tap the US market.
New products
- The company plans to launch new grades.
- The company plans to introduce new product categories.
New initiatives
- The company plans to optimise costs.
- The company plans to increase contribution from PM1 and PM2 through product mix.
Problems & risks
- The company recorded plant-level operating losses during a transition year.
- The company is clearing old or slow-moving stock at a discount.
- Inventory and packaging write-offs are part of a one-time clean-up.
What to watch
- Whether operating margin moves up from 8.93% after the transition-year losses.
- Whether management's planned 10 TPD production increase is reflected in subsequent output.
- Whether other income remains close to profit before tax of Rs 4.74 cr.