Sarla Performance Fibers margin falls as costs outpace revenue growth
Consolidated net profit fell 69.15% quarter on quarter, with negative other income and a lower tax rate shaping the result.
Filed 03 Nov 2026, 20:02 IST · after market close · Sarla Performance Fibers Ltd (SARLAPOLY)
Key takeaways
- Consolidated operating margin fell 4.73 percentage points quarter on quarter to 19.54% as expenses grew 12.45%, faster than revenue growth of 5.85%.
- Net profit declined 69.15% quarter on quarter to Rs 11.50 cr, despite the tax rate falling 14.79 percentage points to 4.68%.
- Sarla Performance Fibers' 19.54% operating margin was 7.31 percentage points above the 12.23% median for 188 Consumer Discretionary peers.
Price around the results
Costs erased the quarter's revenue momentum
Consolidated revenue rose 5.85% quarter on quarter to Rs 119.89 cr, but expenses increased 12.45% to Rs 96.46 cr. The faster cost growth reduced operating profit by 14.81% and narrowed operating margin by 4.73 percentage points to 19.54%. This was the first sequential comparison available in the reported trend, so it shows a quarter-on-quarter deterioration rather than a multi-quarter pattern.
Lower tax cushioned a sharp pre-tax decline
Profit before tax fell 73.93% quarter on quarter to Rs 12.07 cr, while net profit declined 69.15% to Rs 11.50 cr. Other income was negative at Rs -2.49 cr and represented -20.63% of pre-tax profit, weighing on earnings rather than supporting them. The tax rate fell 14.79 percentage points to 4.68%, which softened the reduction in net profit relative to the pre-tax decline; interest expense also rose 7.86%.
Margin remains above the reported peer median
The company's 19.54% operating margin was 7.31 percentage points above the 12.23% median among 188 reported Consumer Discretionary peers. That relative position contrasts with the sequential deterioration, as revenue growth of 5.85% lagged expense growth of 12.45% in Q2FY27.
Results were filed after market close
The consolidated results were filed after market close on 3 November 2026. The stock's post-results move is therefore not yet part of this note, and there is no historical reaction comparison to assess whether the eventual response is typical.
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 | ₹120 cr | ₹113 cr | +5.85% |
| Other income | ₹-2 cr | ₹28 cr | — |
| Expenses | ₹96 cr | ₹86 cr | +12.45% |
| Operating profit | ₹23 cr | ₹27 cr | -14.81% |
| Operating margin (%) | 19.54% | 24.27% | — |
| Interest | ₹3 cr | ₹3 cr | +7.86% |
| Depreciation | ₹6 cr | ₹6 cr | -6.40% |
| Profit before tax | ₹12 cr | ₹46 cr | -73.93% |
| Tax | ₹1 cr | ₹9 cr | -93.79% |
| Net profit | ₹12 cr | ₹37 cr | -69.15% |
| EPS (₹) | ₹1.45 | ₹4.72 | -69.28% |
Operating margin of 19.54% compares with a Consumer Discretionary sector median of 12.23% across 188 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 19.54% after the 4.73-percentage-point sequential decline.
- Whether expense growth slows from 12.45% relative to revenue growth of 5.85%.
- Whether the tax rate remains near 4.68% and other income moves back from Rs -2.49 cr.