RVNL’s operating profit surged, but other income drove 65.86% of PBT
Revenue grew 10.55% YoY and costs 7.28%, lifting margin 2.92 percentage points, while a higher tax rate limited net-profit growth to 18.73%.
Filed 11 Aug 2026, 14:33 IST · Rail Vikas Nigam Ltd (RVNL)
Key takeaways
- Consolidated operating profit rose 249.13% YoY as revenue grew 10.55% and expenses 7.28%.
- Operating margin improved 2.92 percentage points YoY to 4.27%, but remained 9.66 percentage points below the Industrials peer median.
- Other income accounted for 65.86% of pre-tax profit, while net profit grew only 18.73% YoY as the tax rate rose 6.12 percentage points.
Price around the results
Revenue growth did not translate fully into earnings
These consolidated results show revenue up 10.55% YoY, while expenses grew 7.28%, driving a 249.13% increase in operating profit. Net profit grew only 18.73% because the sharper operating improvement was offset by lower other income and a higher tax rate. Sequentially, revenue fell 35.46% and operating profit fell 31.25%.
Operating margin recovered slightly, but remains uneven
Operating margin expanded 2.92 percentage points YoY and 0.26 percentage points QoQ because expenses declined slightly faster than revenue sequentially. The 4.27% margin was above Q4FY26’s 4.01%, but below Q3FY26’s 4.71% and Q4FY25’s 6.73%. The trend shows a recovery from Q1FY26’s 1.35%, but continued quarter-to-quarter volatility.
Other income remains central to reported profit
Other income fell 38.03% YoY even as it rose 65.32% QoQ, and still contributed 65.86% of pre-tax profit. That makes reported earnings quality more dependent on non-operating income than the operating-profit surge alone suggests. Interest expense declined 9.51% YoY, but the tax rate rose 6.12 percentage points to limit net-profit conversion.
RVNL remains well below the Industrials peer margin
Among 112 Industrials companies that have reported, RVNL’s 4.27% operating margin was 9.66 percentage points below the sector median of 13.93%, placing it sixth from the bottom. Historically, the stock has fallen after all eight of its recent results, with a median absolute move of 3.81%, so negative post-results reactions have been the usual pattern for the company.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,321 cr | ₹6,696 cr | -35.46% | +10.55% |
| Other income | ₹147 cr | ₹89 cr | +65.32% | -38.03% |
| Expenses | ₹4,137 cr | ₹6,427 cr | -35.64% | +7.28% |
| Operating profit | ₹185 cr | ₹269 cr | -31.25% | +249.13% |
| Operating margin (%) | 4.27% | 4.01% | — | — |
| Interest | ₹98 cr | ₹98 cr | +0.34% | -9.51% |
| Depreciation | ₹10 cr | ₹10 cr | +7.53% | +17.61% |
| Profit before tax | ₹224 cr | ₹250 cr | -10.71% | +28.91% |
| Tax | ₹64 cr | ₹69 cr | -6.79% | +63.94% |
| Net profit | ₹160 cr | ₹182 cr | -12.19% | +18.73% |
| EPS (₹) | ₹0.76 | ₹0.90 | -15.56% | +16.92% |
Operating margin of 4.27% compares with a Industrials sector median of 13.93% across 112 peers that have reported Q1FY27.
What to watch
- Whether operating margin holds above 4.27% after the 0.26 percentage-point QoQ improvement.
- Whether other income’s 65.86% share of pre-tax profit declines.
- Whether the positive YoY revenue-cost spread remains intact: 10.55% revenue growth versus 7.28% expense growth.