Softtech Q2 profit drops 81.90% as tax rate jumps
Revenue fell faster than expenses sequentially, narrowing operating margin by 1.89 percentage points; other income made up 82.61% of pre-tax profit.
Filed 04 Nov 2026, 18:49 IST · after market close · Softtech Engineers Ltd (SOFTTECH)
Key takeaways
- Consolidated net profit declined -81.90% QoQ to Rs 0.21 cr as profit before tax fell -50.80% and the tax rate rose 38.63 percentage points.
- Revenue fell -5.26% while expenses declined only -2.81%, narrowing operating margin by 1.89 percentage points to 25.32%.
- Other income accounted for 82.61% of profit before tax, while operating margin remained 6.32 percentage points above the 19.00% median of 58 IT peers.
Price around the results
Profit conversion weakened sharply in Q2FY27
These consolidated results show revenue declining -5.26% QoQ to Rs 31.53 cr, while operating profit fell -11.81% to Rs 7.99 cr. Interest rose 5.43% and depreciation was broadly unchanged, so profit before tax dropped -50.80% to Rs 0.92 cr. The tax rate increased from 38.06% to 76.69%, further reducing the conversion of pre-tax profit into net profit.
Costs outpaced revenue on the way down
Expenses declined only -2.81%, slower than the -5.26% fall in revenue, which narrowed operating margin from 27.21% to 25.32%. Other income rose 33.33% to Rs 0.76 cr and represented 82.61% of profit before tax, making reported pre-tax profit materially reliant on non-operating income.
Margin stayed above the IT peer median
Softtech's 25.32% operating margin was 6.32 percentage points above the 19.00% median among 58 IT companies that had reported the same quarter. Sequentially, however, margin moved lower by 1.89 percentage points, marking a weaker quarter than Q1FY27.
Results filed after the market close
The company filed its consolidated Q2FY27 results at 18:49 IST on 4 November 2026, after market close. There is therefore no market reaction to assess yet.
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 | ₹32 cr | ₹33 cr | -5.26% |
| Other income | ₹1 cr | ₹1 cr | +33.33% |
| Expenses | ₹24 cr | ₹24 cr | -2.81% |
| Operating profit | ₹8 cr | ₹9 cr | -11.81% |
| Operating margin (%) | 25.32% | 27.21% | — |
| Interest | ₹1 cr | ₹1 cr | +5.43% |
| Depreciation | ₹7 cr | ₹7 cr | +0.15% |
| Profit before tax | ₹1 cr | ₹2 cr | -50.80% |
| Tax | ₹1 cr | ₹1 cr | -1.41% |
| Net profit | ₹0 cr | ₹1 cr | -81.90% |
| EPS (₹) | ₹0.08 | ₹0.75 | -89.33% |
Operating margin of 25.32% compares with a Information Technology sector median of 19.00% across 58 peers that have reported Q2FY27.
What to watch
- Whether operating margin moves back above the Q1FY27 level of 27.21%.
- Whether the tax rate declines from 76.69%.
- Whether other income remains a large contributor after accounting for 82.61% of Q2FY27 profit before tax.