RVNL profit drops 60.43% as costs outpace revenue
Operating margin narrowed to 4.01% as expenses grew faster than revenue, while other income remained 35.57% of pre-tax profit.
Filed 25 May 2026, 18:01 IST · after market close · Rail Vikas Nigam Ltd (RVNL)
Key takeaways
- Consolidated operating margin fell 2.72 percentage points YoY as expenses grew 7.23% against 4.19% revenue growth.
- Net profit fell 60.43% YoY, with other income contributing 35.57% of pre-tax profit and the tax rate rising 11.49 percentage points.
- The stock fell 4.66% on the first day after results, worse than its 3.77% median post-results move, with seven declines in eight reactions.
Price around the results
Costs erased the Q4 revenue gain
Consolidated revenue grew 4.19% YoY, but expenses rose 7.23%, reducing operating profit by 37.95% and narrowing operating margin by 2.72 percentage points. Sequentially, revenue increased 42.94%, yet expenses grew faster at 43.99%, cutting margin by 0.70 percentage points. Lower interest expense, down 16.61% YoY, did not offset the weaker operating performance.
Profit quality weakened on income and tax mix
Other income fell 62.80% YoY and 71.10% QoQ, but still accounted for 35.57% of pre-tax profit. The tax rate rose 11.49 percentage points YoY and 5.51 percentage points QoQ, adding to the pressure on net profit. Net profit therefore declined 60.43% YoY and 43.96% QoQ despite the fall in interest expense.
Margin remains near the bottom of the industrial peer set
RVNL's 4.01% operating margin was 11.65 percentage points below the 15.66% median among 71 Industrials companies that had reported the quarter, ranking second from the bottom. The quarterly trend shows margin falling from 6.73% in Q4FY25 to 1.35% in Q1FY26, recovering to 4.23% and 4.71%, then slipping to 4.01% in Q4FY26.
The market reaction was worse than RVNL's usual post-results move
The stock fell 4.66% on the first trading day after the results, compared with a 3.77% median absolute move after its past eight results. Seven of those eight reactions were declines. The fall extended to 12.27% after five sessions, with a 9.66% underperformance against the benchmark.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,696 cr | ₹4,684 cr | +42.94% | +4.19% |
| Other income | ₹89 cr | ₹308 cr | -71.10% | -62.80% |
| Expenses | ₹6,427 cr | ₹4,464 cr | +43.99% | +7.23% |
| Operating profit | ₹269 cr | ₹221 cr | +21.66% | -37.95% |
| Operating margin (%) | 4.01% | 4.71% | — | — |
| Interest | ₹98 cr | ₹105 cr | -6.91% | -16.61% |
| Depreciation | ₹10 cr | ₹9 cr | +8.88% | +7.67% |
| Profit before tax | ₹250 cr | ₹415 cr | -39.69% | -54.17% |
| Tax | ₹69 cr | ₹91 cr | -24.51% | -21.13% |
| Net profit | ₹182 cr | ₹324 cr | -43.96% | -60.43% |
| EPS (₹) | ₹0.90 | ₹1.55 | -41.94% | -59.09% |
Operating margin of 4.01% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.66% | -4.17% |
| Next session | -7.40% | — |
| 5 sessions | -12.27% | -9.66% |
| 15 sessions | -10.02% | — |
| 30 sessions | -16.96% | — |
Volume on the results session was 3.59× its 20-day average.
What to watch
- Whether operating margin moves above 4.01% after the Q4FY26 decline.
- Whether expenses grow slower than revenue after rising 43.99% QoQ against revenue growth of 42.94%.
- Whether other income's 35.57% share of pre-tax profit decreases.