Margin recovery lifts Q4 profit despite flat year-on-year revenue
Consolidated operating margin rose 2.02 percentage points YoY as expenses fell 1.84%; other income contributed 21.83% of pre-tax profit.
Filed 26 May 2026, 17:10 IST · after market close · Sumitomo Chemical India Ltd (SUMICHEM)
Key takeaways
- Consolidated operating margin widened 2.02 percentage points YoY to 19.62% as expenses fell 1.84% while revenue rose 0.64%.
- Net profit rose 11.57% YoY to Rs 111.32 cr, but other income made up 21.83% of pre-tax profit.
- Revenue grew 20.38% QoQ and operating margin recovered 2.10 percentage points, though it remained below Q2FY26's 23.45%.
Price around the results
Q4 margin recovery, not revenue growth, drove profit
Sumitomo Chemical India's consolidated revenue was nearly flat YoY, rising just +0.64%, but expenses declined -1.84%, allowing operating profit to increase +12.21%. The resulting 2.02-percentage-point margin expansion lifted net profit by +11.57% to Rs 111.32 cr. Sequentially, revenue rose +20.38% and operating profit increased +34.86% as expenses grew more slowly at +17.31%.
Other income remained material to pre-tax profit
Other income contributed 21.83% of pre-tax profit, so the quarter's earnings also depended materially on non-operating income. The tax rate fell 0.47 percentage points YoY and 0.81 percentage points QoQ, which supported net profit growth. Interest expense rose +15.06% YoY but fell -5.45% QoQ.
Margin rebounded from Q3 but stayed below the first-half peak
Operating margin recovered from 17.52% in Q3FY26 to 19.62% in Q4FY26, reversing the preceding-quarter decline but remaining below the 23.45% recorded in Q2FY26. The margin was 0.85 percentage points above the 18.77% median for the 51 Commodities peers that had reported the same quarter. This was therefore a sequential recovery rather than a return to the year's earlier margin peak.
Management linked expansion plans to demand and working capital to seasonality
Management said it aims to address domestic and global demand through manufacturing upgrades and capacity expansion. The company said working capital increased because of seasonal inventory build-up and fewer payable days ahead of the kharif season. It also cited global supply-chain volatility and a challenging demand environment, while reporting that receivable days improved to 83 days from 91 days.
The initial stock reaction was milder than its usual result-day move
The results were filed after market close, after which the stock rose +1.32% on the first trading session and was up +2.56% after one day. It was down -3.26% after five days and -7.50% after 15 days, before reaching +5.04% after 30 days. Across the last eight results, the stock rose three times and fell five times, with a median absolute move of 3.40%, making the initial reaction smaller than its typical move.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹684 cr | ₹568 cr | +20.38% | +0.64% |
| Other income | ₹32 cr | ₹21 cr | +54.48% | +1.87% |
| Expenses | ₹550 cr | ₹468 cr | +17.31% | -1.84% |
| Operating profit | ₹134 cr | ₹99 cr | +34.86% | +12.21% |
| Operating margin (%) | 19.62% | 17.52% | — | — |
| Interest | ₹2 cr | ₹2 cr | -5.45% | +15.06% |
| Depreciation | ₹17 cr | ₹17 cr | +1.02% | +2.98% |
| Profit before tax | ₹148 cr | ₹102 cr | +45.27% | +10.85% |
| Tax | ₹36 cr | ₹26 cr | +40.59% | +8.73% |
| Net profit | ₹111 cr | ₹76 cr | +46.86% | +11.57% |
| EPS (₹) | ₹2.23 | ₹1.52 | +46.71% | +11.50% |
Operating margin of 19.62% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.32% | +1.35% |
| Next session | +2.56% | — |
| 5 sessions | -3.26% | -1.18% |
| 15 sessions | -7.50% | — |
| 30 sessions | +5.04% | — |
Volume on the results session was 1.32× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company aims to cater to strong domestic and global demand through manufacturing upgrades and capacity expansion.
Problems & risks
- The company said working capital increased due to seasonal inventory build-up and reduced payable days ahead of the kharif season.
- The company cited global supply chain volatility and a challenging demand environment.
- The company reported industry-wide challenges during the year despite its collection and working capital management efforts.
What to watch
- Whether operating margin holds above 19.62% after the Q4 recovery.
- Whether other income's 21.83% share of pre-tax profit declines.
- Whether receivable days remain at or below 83 days as seasonal inventory normalises.