High operating margin does not carry through to Smartworks’ pre-tax profit
A 63.85% operating margin was offset by Rs 259.06 cr depreciation and Rs 97.56 cr interest, with other income also supporting pre-tax profit.
Filed 30 Oct 2026, 10:46 IST · Smartworks Coworking Spaces Ltd (SMARTWORKS)
Key takeaways
- Consolidated operating profit of Rs 377.56 cr converted into net profit of Rs 25.64 cr after Rs 259.06 cr depreciation and Rs 97.56 cr interest.
- Smartworks' consolidated operating margin of 63.85% was 42.35 percentage points above the 21.5% median for 25 Services peers.
- Other income of Rs 13.93 cr was a material contributor alongside consolidated profit before tax of Rs 34.87 cr, while the tax rate was 26.47%.
Price around the results
Operating profit narrows sharply before tax
Smartworks reported consolidated operating profit of Rs 377.56 cr in Q2FY27, but profit before tax was only Rs 34.87 cr. Depreciation of Rs 259.06 cr and interest of Rs 97.56 cr explain the large gap between operating earnings and pre-tax profit. Net profit was Rs 25.64 cr, with EPS of Rs 2.24.
Other income was important to reported profit
Other income of Rs 13.93 cr contributed alongside the Rs 34.87 cr consolidated profit before tax, making reported earnings less dependent on operating profit alone. The consolidated tax rate was 26.47%, so the quarter’s net profit also reflects the tax charge of Rs 9.23 cr.
Margin remains well above the Services peer median
Smartworks’ consolidated operating margin of 63.85% was 42.35 percentage points above the 21.5% median among 25 Services companies that had reported the quarter. The peer comparison highlights a wide gap between the company’s operating margin and the sector’s reported middle ground, even though depreciation and interest substantially reduced profit below that line.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 |
|---|---|
| Revenue | ₹591 cr |
| Other income | ₹14 cr |
| Expenses | ₹214 cr |
| Operating profit | ₹378 cr |
| Operating margin (%) | 63.85% |
| Interest | ₹98 cr |
| Depreciation | ₹259 cr |
| Profit before tax | ₹35 cr |
| Tax | ₹9 cr |
| Net profit | ₹26 cr |
| EPS (₹) | ₹2.24 |
Operating margin of 63.85% compares with a Services sector median of 21.50% across 25 peers that have reported Q2FY27.
What to watch
- Whether consolidated operating margin remains above 63.85%.
- The relationship between operating profit and depreciation of Rs 259.06 cr in the next quarter.
- How much other income contributes alongside reported profit before tax of Rs 34.87 cr.