Higher costs cut Sumitomo Chemical India's margin despite peer outperformance
Revenue fell 2.42% year on year as expenses rose 1.37%; other income accounted for 20.74% of pre-tax profit.
Filed 26 Oct 2026, 15:50 IST · after market close · Sumitomo Chemical India Ltd (SUMICHEM)
Key takeaways
- Consolidated operating margin fell 2.98 percentage points YoY to 20.47% as revenue declined 2.42% while expenses rose 1.37%.
- Net profit declined 11.45% YoY to Rs 157.4 cr, while other income supplied 20.74% of pre-tax profit.
- Sequentially, revenue fell 14.67% and operating margin narrowed 1.47 percentage points, ending the improvement seen from Q3FY26 to Q1FY27.
Price around the results
Revenue fell despite a favourable sector margin position
Consolidated revenue fell 2.42% YoY to Rs 907.31 cr, while expenses rose 1.37%; operating profit consequently declined 14.80%. The 20.47% operating margin was still 4.5 percentage points above the 15.97% median for the 19 Commodities peers that had reported the quarter.
Sequential margin recovery lost momentum
Revenue declined 14.67% QoQ, but expenses fell only 13.07%, so costs contracted more slowly than sales and operating margin narrowed 1.47 percentage points. Margin had improved from 17.52% in Q3FY26 to 21.94% in Q1FY27, making the move back to 20.47% a reversal rather than a continuation of that recovery.
Other income remained material to pre-tax profit
Other income accounted for 20.74% of pre-tax profit, so the reported Rs 157.4 cr of consolidated net profit included a meaningful non-operating contribution. The tax rate was only 0.15 percentage points lower YoY at 25.11%, while interest expense fell 13.90%, neither materially offsetting the operating decline.
No immediate market reaction after the filing
The consolidated results were filed after market close, so there was no market reaction to this quarter at the time of reporting. Across the eight recent result reactions, the stock rose three times and fell five times, with a median absolute move of 3.4%.
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 | YoY |
|---|---|---|---|---|
| Revenue | ₹907 cr | ₹1,063 cr | -14.67% | -2.42% |
| Other income | ₹44 cr | ₹74 cr | -41.24% | +12.35% |
| Expenses | ₹722 cr | ₹830 cr | -13.07% | +1.37% |
| Operating profit | ₹186 cr | ₹233 cr | -20.37% | -14.80% |
| Operating margin (%) | 20.47% | 21.94% | — | — |
| Interest | ₹2 cr | ₹2 cr | -4.00% | -13.90% |
| Depreciation | ₹17 cr | ₹17 cr | +0.23% | +3.10% |
| Profit before tax | ₹210 cr | ₹288 cr | -27.09% | -11.64% |
| Tax | ₹53 cr | ₹74 cr | -28.44% | -12.18% |
| Net profit | ₹157 cr | ₹215 cr | -26.62% | -11.45% |
| EPS (₹) | ₹3.14 | ₹4.30 | -26.98% | -11.80% |
Operating margin of 20.47% compares with a Commodities sector median of 15.97% across 19 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.23% | -4.22% |
Volume on the results session was 7.63× its 20-day average.
What to watch
- Whether operating margin moves back above the 21.94% recorded in Q1FY27.
- Whether the 14.67% QoQ revenue decline narrows.
- Whether other income's 20.74% share of pre-tax profit decreases.