Rico Auto's margin collapses as costs outpace revenue growth
Revenue rose 12.88% sequentially, but faster expense growth cut operating profit 82.98% and widened the consolidated net loss.
Filed 06 Nov 2026, 13:17 IST · Rico Auto Industries Ltd (RICOAUTO)
Key takeaways
- Consolidated operating margin fell 3.92 percentage points sequentially to 0.69% as expenses grew 17.51%, faster than revenue growth of 12.88%.
- Rico Auto's consolidated net loss widened to Rs 26.27 cr from Rs 3.38 cr in Q1FY27, with interest expense up 9.58% and the tax rate higher by 3.62 percentage points.
- The stock fell 10.35% on the results day, while trading volume reached 13.76 times its normal level.
Price around the results
Revenue growth did not translate into operating profit
Consolidated revenue increased 12.88% sequentially to Rs 852.36 cr, but operating profit fell 82.98% to Rs 5.92 cr. The company remained loss-making at the net level, with EPS at negative Rs 1.97.
Higher costs and interest drove the deeper loss
Interest expense increased 9.58% to Rs 15.90 cr, adding pressure below operating profit, while depreciation declined 1.85% to Rs 26.60 cr. Other income contributed only Rs 3.42 cr and represented negative 10.31% of pre-tax profit because pre-tax profit was a loss, so it did not offset the operating weakness. The tax rate rose 3.62 percentage points to 20.78%, further affecting the sequential comparison.
Margin trails the Consumer Discretionary peer median
Rico Auto's 0.69% consolidated operating margin was 10.73 percentage points below the 11.42% median for 287 Consumer Discretionary peers that had reported the quarter. The sequential direction also weakened, with margin down from 4.61% in Q1FY27. Pre-tax loss widened to Rs 33.16 cr from Rs 4.08 cr.
Shares fell sharply with unusually heavy volume
The stock declined 10.35% on the results day, including a relative return of negative 12.36%. Volume was 13.76 times normal, indicating a high level of trading around the filing.
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 |
|---|---|---|---|
| Revenue | ₹852 cr | ₹755 cr | +12.88% |
| Other income | ₹3 cr | ₹3 cr | +24.36% |
| Expenses | ₹846 cr | ₹720 cr | +17.51% |
| Operating profit | ₹6 cr | ₹35 cr | -82.98% |
| Operating margin (%) | 0.69% | 4.61% | — |
| Interest | ₹16 cr | ₹15 cr | +9.58% |
| Depreciation | ₹27 cr | ₹27 cr | -1.85% |
| Profit before tax | ₹-33 cr | ₹-4 cr | -712.75% |
| Tax | ₹-7 cr | ₹-1 cr | -884.29% |
| Net profit | ₹-26 cr | ₹-3 cr | -677.22% |
| EPS (₹) | ₹-1.97 | ₹-0.27 | -629.63% |
Operating margin of 0.69% compares with a Consumer Discretionary sector median of 11.42% across 287 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -10.35% | -12.36% |
Volume on the results session was 13.76× its 20-day average.
What to watch
- Whether operating margin recovers from 0.69% after the 3.92-percentage-point sequential decline.
- Whether expense growth falls below the 12.88% sequential revenue growth rate.
- Whether interest expense moves below the current Rs 15.90 cr level.