Sterlite's Q2 margin jumps to 32.11% as revenue scales
Consolidated revenue rose +32.41% QoQ while expenses grew +12.59%; the year-on-year profit comparison also benefited from a lower tax rate.
Filed 23 Oct 2026, 12:53 IST · Sterlite Technologies Ltd (STLTECH)
Key takeaways
- Consolidated operating margin expanded 11.95 percentage points QoQ to 32.11% as revenue growth of 32.41% outpaced expense growth of 12.59%.
- Net profit rose 12825.00% YoY to Rs 517 cr, helped by a 10.04 percentage-point decline in the tax rate and a sharp increase in operating profit.
- The stock gained 2.39% after the results, below its recent median absolute reaction of 4.59% across eight result events.
Price around the results
Revenue acceleration lifted operating profit
Sterlite Technologies reported consolidated revenue growth of 32.41% QoQ and 144.58% YoY, while expenses increased 12.59% and 89.72%, respectively. That gap drove operating profit growth of 110.91% QoQ and 529.46% YoY. Other income contributed 5.04% of profit before tax, so it was not the main source of the quarter's earnings.
Margin expansion continued despite higher interest
Operating margin widened 11.95 percentage points QoQ and 19.63 percentage points YoY because costs grew more slowly than revenue. Interest expense still rose 14.55% in both comparisons, while the tax rate fell 0.06 percentage points QoQ and 10.04 percentage points YoY. The lower YoY tax rate therefore provided an additional lift to net profit.
Third straight quarterly margin increase
Operating margin has risen for three consecutive quarters, from 13.53% in Q4FY26 to 20.16% in Q1FY27 and 32.11% in Q2FY27, after reaching 9.55% in Q3FY26. The latest margin was 7.3 percentage points above the 24.81% median of five telecom peers that had reported the quarter.
Market reaction was milder than the stock's norm
The stock rose 2.39% on the results date, although it opened with a 3.85% gap down. Across its last eight results, reactions were evenly split between four rises and four falls, with a median absolute move of 4.59%, making this advance smaller than its usual result-day swing.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,529 cr | ₹1,910 cr | +32.41% | +144.58% |
| Other income | ₹34 cr | ₹12 cr | +183.33% | +183.33% |
| Expenses | ₹1,717 cr | ₹1,525 cr | +12.59% | +89.72% |
| Operating profit | ₹812 cr | ₹385 cr | +110.91% | +529.46% |
| Operating margin (%) | 32.11% | 20.16% | — | — |
| Interest | ₹63 cr | ₹55 cr | +14.55% | +14.55% |
| Depreciation | ₹109 cr | ₹85 cr | +28.24% | +36.25% |
| Profit before tax | ₹674 cr | ₹257 cr | +162.26% | +11133.33% |
| Tax | ₹157 cr | ₹60 cr | +161.67% | +7750.00% |
| Net profit | ₹517 cr | ₹197 cr | +162.44% | +12825.00% |
| EPS (₹) | ₹10.32 | ₹4.03 | +156.08% | +12800.00% |
Operating margin of 32.11% compares with a Telecommunication sector median of 24.81% across 5 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.39% | +2.78% |
Volume on the results session was 2.10× its 20-day average.
What to watch
- Whether operating margin holds above 32.11% after three consecutive quarterly increases.
- Whether expense growth remains below revenue growth after the 12.59% versus 32.41% QoQ gap.
- Whether the tax rate stays near 23.29% without another material lift to reported profit.