Protean’s margin recovers QoQ, but profit remains reliant on other income
Costs grew faster than revenue YoY, while higher interest and depreciation pulled net profit down despite a lower tax rate.
Filed 05 Nov 2026, 17:16 IST · after market close · Protean eGov Technologies Ltd (PROTEAN)
Key takeaways
- Consolidated operating margin recovered 4.04 percentage points QoQ to 8.99%, as revenue grew faster than expenses.
- Net profit fell 31.27% YoY to Rs 16.40 cr, with interest up 103.31% and depreciation up 84.20%.
- Other income accounted for 89.84% of consolidated profit before tax, making reported profit quality a key issue.
Price around the results
Margin recovery follows a weak Q1
Protean’s consolidated revenue grew 7.90% QoQ, while expenses increased 3.31%, lifting operating margin by 4.04 percentage points to 8.99%. This reverses part of the decline from 13.89% in Q3FY26 to 12.35% in Q4FY26 and 4.95% in Q1FY27. On a YoY basis, however, expenses grew 11.42% against 8.10% revenue growth, pushing margin down 2.72 percentage points.
Higher depreciation and interest weigh on profit
Year-on-year profit pressure came below the operating line: interest rose 103.31% and depreciation increased 84.20%, while profit before tax declined 33.65%. The tax rate fell 2.67 percentage points to 22.86%, which cushioned the decline but did not prevent net profit from falling 31.27% YoY. Other income of Rs 19.10 cr represented 89.84% of profit before tax, so reported earnings were heavily supported by non-operating income.
Below the reported IT-sector margin median
Protean’s 8.99% operating margin was 8.80 percentage points below the 17.79% median for the 61 Information Technology peers that had reported the quarter. The company ranked 11th from the bottom on this measure. QoQ profit improved sharply from Rs 5.86 cr to Rs 16.40 cr as operating performance recovered, but the multi-quarter margin trend remains below the 13.89% level recorded in Q3FY26.
Management highlights global expansion approach
Management said Protean is pursuing global expansion through a “DPI-in-a-Box” approach. The comment provides the stated business direction alongside the quarter’s revenue recovery, but the presentation does not provide a quantified financial contribution for this initiative.
No immediate market reaction yet
The consolidated results were filed after market close, so there was no market reaction to report at the time of filing. In the six most recent result reactions, the stock rose three times and fell three times, with a median absolute move of 5.18%.
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 | ₹271 cr | ₹251 cr | +7.90% | +8.10% |
| Other income | ₹19 cr | ₹15 cr | +24.03% | +30.82% |
| Expenses | ₹246 cr | ₹239 cr | +3.31% | +11.42% |
| Operating profit | ₹24 cr | ₹12 cr | +96.05% | -16.98% |
| Operating margin (%) | 8.99% | 4.95% | — | — |
| Interest | ₹3 cr | ₹3 cr | +15.85% | +103.31% |
| Depreciation | ₹19 cr | ₹18 cr | +9.07% | +84.20% |
| Profit before tax | ₹21 cr | ₹8 cr | +178.27% | -33.65% |
| Tax | ₹5 cr | ₹2 cr | +173.03% | -40.59% |
| Net profit | ₹16 cr | ₹6 cr | +179.86% | -31.27% |
| EPS (₹) | ₹4.04 | ₹1.44 | +180.56% | -31.29% |
Operating margin of 8.99% compares with a Information Technology sector median of 17.79% across 61 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- Protean is pursuing global expansion through a DPI-in-a-Box approach.
What to watch
- Whether consolidated operating margin holds above 8.99% after the QoQ recovery.
- Whether other income remains close to its 89.84% share of profit before tax.
- Whether interest and depreciation moderate from their 103.31% and 84.20% YoY increases.