Revenue rose 19.75% QoQ, but higher interest capped profit growth
Operating margin improved as expenses grew slower than revenue, but tax and interest costs limited the increase in net profit.
Filed 05 Nov 2026, 12:12 IST · Standard Engineering Technology Ltd (SETL)
Key takeaways
- Consolidated revenue rose +19.75% QoQ, while operating margin expanded 1.35 percentage points to 17.34%.
- Net profit increased only +5.42% QoQ as interest expense rose +65.50%, the tax rate climbed 2.28 percentage points and other income contributed -4.08% of pre-tax profit.
- Operating margin was 5.86 percentage points above the 11.48% median for 180 Industrials peers that had reported the quarter.
Price around the results
Revenue growth converted into a wider operating margin
Consolidated revenue increased +19.75% QoQ, while operating profit rose +29.78%, as expenses grew more slowly at +17.83%. That operating leverage lifted the margin by 1.35 percentage points to 17.34%. The margin was also 5.86 percentage points above the 11.48% median among 180 Industrials peers that had reported.
Interest and tax costs diluted operating gains
The improvement in operating profit did not flow through fully to net profit because interest expense rose +65.50% QoQ and the tax rate increased 2.28 percentage points. Other income moved to a loss and represented -4.08% of pre-tax profit, so profit quality was not supported by non-operating income. As a result, net profit grew only +5.42%.
Management points to expansion and new equipment markets
Management said it is targeting 40–50% FY27 growth for the core engine business and that GScale Energy is targeting Rs 250 Cr of FY27 revenue from approximately three months of operations. The company said GScale's Tukkuguda facility is planned to expand by approximately 127,000 sq ft by Q4 FY27, with all planned machinery orders placed and deliveries expected in mid-November and end-November 2026. Management also said the company is expanding into semiconductor-grade equipment.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹297 cr | ₹248 cr | +19.75% |
| Other income | ₹-2 cr | ₹5 cr | — |
| Expenses | ₹245 cr | ₹208 cr | +17.83% |
| Operating profit | ₹51 cr | ₹40 cr | +29.78% |
| Operating margin (%) | 17.34% | 15.99% | — |
| Interest | ₹5 cr | ₹3 cr | +65.50% |
| Depreciation | ₹5 cr | ₹5 cr | +9.70% |
| Profit before tax | ₹39 cr | ₹36 cr | +8.80% |
| Tax | ₹11 cr | ₹9 cr | +18.53% |
| Net profit | ₹28 cr | ₹27 cr | +5.42% |
| EPS (₹) | ₹1.32 | ₹1.32 | +0.00% |
Operating margin of 17.34% compares with a Industrials sector median of 11.48% across 180 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.99% | -7.00% |
Volume on the results session was 0.31× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company targets 40–50% growth in FY27 for its core engine.
- GScale Energy targets ₹250 Cr of FY27 revenue from approximately three months of operations.
Expansion
- GScale’s Tukkuguda facility will expand by approximately 127,000 sq ft by Q4 FY27.
- The Tukkuguda facility expansion is expected to be completed by Q4 FY27, or January–March 2027.
- All planned machinery orders have been placed, with deliveries expected in mid-November and end-November 2026.
- The company has planned ₹130 Cr of capex for 5.5 lakh sq ft.
New initiatives
- The company is expanding into semiconductor-grade equipment.
- GL Hakko’s investment focus includes semiconductor-grade process equipment for semiconductor chemicals.
Problems & risks
- The company says turnover moderated because new capacity was added ahead of growth.
What to watch
- Whether operating margin holds above 17.34% as the expansion progresses.
- Whether interest expense growth moderates after rising +65.50% QoQ.
- Whether subsequent disclosures provide progress toward the stated 40–50% FY27 core-engine growth target and Rs 250 Cr GScale revenue target.