Operating loss narrowed, but a tax credit drove the profit
Expenses fell faster than revenue, yet the reported profit depended on a Rs 0.22 cr tax credit and Rs 1.56 cr of other income.
Filed 13 Aug 2026, 14:53 IST · RETAIL (RETAIL)
Key takeaways
- Consolidated operating loss narrowed sequentially by 21.36%, but operating margin remained negative at -20.06%.
- Revenue fell 5.85% QoQ while expenses fell 8.88%, lifting operating margin by 4.01 percentage points.
- A Rs 0.22 cr tax credit turned a Rs 0.09 cr pre-tax loss into Rs 0.13 cr net profit, with the 249.72% tax rate distorting earnings.
Expenses fell faster than revenue in Q1FY27
Consolidated revenue declined 5.85% sequentially, but the 8.88% fall in expenses was larger, reducing the operating loss by 21.36%. This cost reduction lifted operating margin by 4.01 percentage points, although the margin remained at -20.06%.
Reported profit was driven below the operating line
Other income of Rs 1.56 cr was equivalent to -1733.33% of pre-tax profit because pre-tax profit was a Rs 0.09 cr loss. The Rs 0.22 cr tax credit produced a 249.72% tax rate and converted that pre-tax loss into Rs 0.13 cr of net profit. Interest expense also declined 19.05% sequentially, providing a smaller offset.
Margin recovered from Q4FY26 but remains deeply negative
Operating margin moved from -1.13% in Q2FY26 to -24.07% in Q4FY26, before recovering to -20.06% in Q1FY27. The sequential improvement therefore follows a sharp deterioration over the reported trend, while core operations remain loss-making.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹4 cr | ₹4 cr | -5.85% |
| Other income | ₹2 cr | ₹2 cr | +0.00% |
| Expenses | ₹5 cr | ₹5 cr | -8.88% |
| Operating profit | ₹-1 cr | ₹-1 cr | +21.36% |
| Operating margin (%) | -20.06% | -24.07% | — |
| Interest | ₹0 cr | ₹0 cr | -19.05% |
| Depreciation | ₹1 cr | ₹1 cr | -1.45% |
| Profit before tax | ₹-0 cr | ₹-0 cr | +75.68% |
| Tax | ₹-0 cr | ₹-0 cr | -37.50% |
| Net profit | ₹0 cr | ₹-0 cr | — |
| EPS (₹) | ₹0.23 | ₹-0.13 | — |
What to watch
- Whether operating margin improves further from -20.06%.
- Whether expenses remain below the revenue-growth rate after falling 8.88% versus a 5.85% revenue decline.
- Whether net profit remains positive without a Rs 0.22 cr tax credit and Rs 1.56 cr of other income.