Subros revenue grows, but faster costs cut operating margin
Sequential profit rose 7.51%, while other income contributed 12.32% of pre-tax profit and operating margin remained below the Industrials peer median.
Filed 03 Nov 2026, 19:54 IST · after market close · Subros Ltd (SUBROS)
Key takeaways
- Consolidated revenue rose 16.16% sequentially, but expenses grew faster at 17.19%, pulling operating margin down 0.82 percentage points.
- Net profit increased 7.51% sequentially to Rs 44.64 cr as lower interest partly offset weaker operating conversion.
- Operating margin at 7.01% was 4.31 percentage points below the 11.32% median for 104 Industrials peers that have reported.
Price around the results
Revenue growth did not fully reach operating profit
Consolidated revenue rose 16.16% sequentially to Rs 1,198.90 cr, but operating profit increased only 4.08% to Rs 84.10 cr. The weaker conversion reflects expenses growing 17.19%, faster than revenue. Management said SOP of Fronx started at the Karsanpura plant during Q2FY27.
Cost growth narrowed the margin
Operating margin declined 0.82 percentage points to 7.01% because costs outpaced revenue. Interest expense fell 8.78%, while the tax rate was almost unchanged, rising 0.06 percentage points to 25.56%. Other income represented 12.32% of pre-tax profit, so reported earnings also included a meaningful non-operating contribution.
Margin trails peers after one quarter of sequential data
Subros's 7.01% operating margin was 4.31 percentage points below the 11.32% median among 104 reported Industrials peers, placing it 14th from the bottom. With only Q1FY27 in the supplied trend, the clear direction is a sequential margin decline rather than a longer multi-quarter pattern. The results were filed after market close, so there is no market reaction to assess yet.
Karsanpura ramp and new-product plans remain key disclosures
Management said the Karsanpura expansion is targeted for SOP in 2027-28 and described Kharkhoda as a greenfield project. The company also said it plans product expansion in BEV and SHEV spaces. These initiatives provide the operating context for the current-quarter start of Fronx SOP at Karsanpura.
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 | ₹1,199 cr | ₹1,032 cr | +16.16% |
| Other income | ₹7 cr | ₹6 cr | +16.75% |
| Expenses | ₹1,115 cr | ₹951 cr | +17.19% |
| Operating profit | ₹84 cr | ₹81 cr | +4.08% |
| Operating margin (%) | 7.01% | 7.83% | — |
| Interest | ₹2 cr | ₹3 cr | -8.78% |
| Depreciation | ₹29 cr | ₹29 cr | +1.22% |
| Profit before tax | ₹60 cr | ₹56 cr | +7.61% |
| Tax | ₹15 cr | ₹14 cr | +7.88% |
| Net profit | ₹45 cr | ₹42 cr | +7.51% |
| EPS (₹) | ₹6.85 | ₹6.36 | +7.70% |
Operating margin of 7.01% compares with a Industrials sector median of 11.32% across 104 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- SOP of Fronx started from the Karsanpura plant during Q2 2026-27.
Guidance & outlook
- The company targets SOP for the Karsanpura plant expansion in 2027-28.
Expansion
- The Kharkhoda plant is a greenfield project.
New initiatives
- The company plans product expansion in BEV and SHEV spaces.
What to watch
- Whether operating margin holds above 7.01% in the next quarter.
- Whether expense growth remains above revenue growth after the current 17.19% versus 16.16% gap.
- Updates on the Karsanpura expansion targeted for SOP in 2027-28 and the BEV and SHEV product pipeline.