Revenue fell 5.07% YoY, but margin expanded as costs fell faster
The sequential margin drop was sharp at 8.65 percentage points, and the stock’s 4.59% first-day fall was unusually large for this company.
Filed 28 May 2026, 13:47 IST · after market close · Procter & Gamble Hygiene and Health Care Ltd (PGHH)
Key takeaways
- Standalone operating margin expanded 2.05 percentage points year on year to 23.19% as expenses fell faster than revenue.
- Sequentially, operating margin dropped 8.65 percentage points because revenue contracted 25.40% while expenses fell 15.94%.
- The stock fell 4.59% in the first session after the results, versus a 0.55% median absolute move after the company’s past five results.
Price around the results
Year-on-year margin improvement masked a weak sequential quarter
This standalone quarter was weaker on revenue year on year, but operating profit still rose 4.13% because expenses declined 7.54%, faster than the 5.07% revenue decline. The sequential comparison was much softer: revenue fell 25.40% and operating profit dropped 45.67%, indicating a sharp loss of operating leverage after Q3FY26. Operating margin nevertheless remained 6.44 percentage points above the 16.75% median for the 26 Fast Moving Consumer Goods peers that had reported.
Margin recovered from last year but reversed after the Q3 peak
The 2.05-percentage-point year-on-year margin improvement came from expenses falling faster than revenue, while interest expense also declined 46.10%. Sequentially, expenses contracted less than revenue, so margin narrowed 8.65 percentage points; the tax rate also rose 4.77 percentage points to 29.79%. The margin path has turned down from 31.84% in Q3FY26 after improving from 24.76% in Q2FY26, but it is still above 21.14% in Q4FY25.
Profit quality was largely operating, with tax limiting net profit
Other income accounted for 5.72% of profit before tax, so it was not the main source of earnings. However, the tax rate increased 3.19 percentage points year on year, which helped reduce net profit 1.90% despite a 2.56% rise in profit before tax. This also explains why earnings per share fell 1.91% to Rs 47.17 even as operating profit increased.
The market reaction was far larger than the company’s usual move
The stock fell 4.59% in the first session after the results, with trading volume at 3.34 times the reference level, and was down 7.07% after five sessions. It was down 11.95% after 30 sessions and underperformed the market by 3.08% on day one. Four of the company’s past five result reactions were negative, but the latest first-day decline was much larger than the 0.55% median absolute move.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹941 cr | ₹1,262 cr | -25.40% | -5.07% |
| Other income | ₹12 cr | ₹12 cr | +0.48% | -34.81% |
| Expenses | ₹723 cr | ₹860 cr | -15.94% | -7.54% |
| Operating profit | ₹218 cr | ₹402 cr | -45.67% | +4.13% |
| Operating margin (%) | 23.19% | 31.84% | — | — |
| Interest | ₹3 cr | ₹3 cr | +16.48% | -46.10% |
| Depreciation | ₹10 cr | ₹10 cr | +0.63% | -7.63% |
| Profit before tax | ₹218 cr | ₹402 cr | -45.75% | +2.56% |
| Tax | ₹65 cr | ₹101 cr | -35.39% | +14.89% |
| Net profit | ₹153 cr | ₹301 cr | -49.20% | -1.90% |
| EPS (₹) | ₹47.17 | ₹92.87 | -49.21% | -1.91% |
Operating margin of 23.19% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.59% | -3.08% |
| Next session | -6.63% | — |
| 5 sessions | -7.07% | -4.81% |
| 15 sessions | -8.31% | — |
| 30 sessions | -11.95% | — |
Volume on the results session was 3.34× its 20-day average.
What to watch
- Whether operating margin recovers from 23.19% after the 31.84% recorded in Q3FY26.
- Whether revenue momentum improves from the 25.40% sequential decline.
- Whether the tax rate moves down from 29.79% after rising 3.19 percentage points year on year.