Power Grid's margin slips QoQ as costs outpace revenue growth
Year-on-year profit growth was aided by lower expenses and a reduced tax rate, while the results were filed after market close.
Filed 01 Nov 2026, 20:11 IST · after market close · Power Grid Corporation of India Ltd (POWERGRID)
Key takeaways
- Power Grid's consolidated operating margin fell 0.69 percentage points sequentially as expenses grew 6.94% against 2.78% revenue growth.
- Year-on-year net profit rose 8.41% to Rs 3,866.16 cr, helped by a 3.96 percentage-point reduction in the tax rate.
- The 82.26% operating margin was 32.15 percentage points above the 50.11% median for 12 Utilities peers that have reported.
Price around the results
Sequential margin pressure returns after Q1 recovery
Power Grid's consolidated revenue grew 2.78% sequentially, but expenses rose 6.94%, pulling operating margin down 0.69 percentage points to 82.26%. Interest costs also increased 8.32%, which helped push profit before tax down 0.41% even as net profit rose 7.44% sequentially. The net profit increase was supported by a 1.81 percentage-point fall in the tax rate.
Year-on-year profit growth had a cleaner operating base
Compared with Q2FY26, revenue increased 2.97% while expenses declined 11.26%, lifting operating margin by 2.84 percentage points. Profit before tax therefore grew 17.80%, ahead of the 8.41% increase in net profit as the tax rate fell 3.96 percentage points. Other income was 5.15% of pre-tax profit, so it was a limited but positive contributor to profit quality rather than the main earnings driver.
Margin remains above peers but below the recent peak
The current 82.26% operating margin is above the 50.11% median reported by 12 Utilities peers, with Power Grid 32.15 percentage points higher. The quarter marks a sequential decline after Q1FY27's 82.95%, following a rebound from 77.71% in Q4FY26; it also remains below the 85.95% recorded in Q3FY26. This makes the latest movement a pullback from the recent high, not a third consecutive quarterly decline.
No immediate market reaction; past results usually saw declines
The consolidated results were filed after market close, so there was no current-session reaction to report. Across the last eight result reactions, the stock rose once and fell seven times, with a median absolute move of 3.04%. The recent recorded moves ranged from -3.90% to +5.42%, placing the historical pattern predominantly on the downside but with variable magnitude.
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 | YoY |
|---|---|---|---|---|
| Revenue | ₹11,816 cr | ₹11,497 cr | +2.78% | +2.97% |
| Other income | ₹235 cr | ₹202 cr | +16.34% | +73.51% |
| Expenses | ₹2,096 cr | ₹1,960 cr | +6.94% | -11.26% |
| Operating profit | ₹9,720 cr | ₹9,536 cr | +1.92% | +6.65% |
| Operating margin (%) | 82.26% | 82.95% | — | — |
| Interest | ₹2,191 cr | ₹2,023 cr | +8.32% | +2.01% |
| Depreciation | ₹3,196 cr | ₹3,128 cr | +2.14% | -0.86% |
| Profit before tax | ₹4,568 cr | ₹4,587 cr | -0.41% | +17.80% |
| Tax | ₹796 cr | ₹883 cr | -9.78% | -3.97% |
| Net profit | ₹3,866 cr | ₹3,598 cr | +7.44% | +8.41% |
| EPS (₹) | ₹4.16 | ₹3.87 | +7.49% | +8.33% |
Operating margin of 82.26% compares with a Utilities sector median of 50.11% across 12 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 82.26% after the 0.69 percentage-point sequential decline.
- Whether interest expense moderates from Rs 2,191.34 cr after rising 8.32% sequentially.
- Whether the tax rate stays near 17.43% after falling 3.96 percentage points year on year.