Revenue momentum lifted operating margin to 33.98% in Q2FY27
Revenue grew faster than expenses, while fleet investment and Equipment Rentals drove the quarter; management expects FY27 margin around 35%.
Filed 29 Oct 2026, 13:07 IST · Tara Chand Infralogistic Solutions Ltd (TARACHAND)
Key takeaways
- Consolidated revenue grew 22.89% QoQ to Rs 83.11 cr while expenses rose 15.67%, lifting operating margin by 4.11 percentage points to 33.98%.
- Consolidated net profit rose 445.18% QoQ to Rs 9.05 cr, helped by a 10.47% fall in depreciation despite 10.28% higher interest cost.
- Equipment Rentals grew 57% and contributed over 70% of revenue, while management said Warehousing returned to profit in Q2FY27.
Price around the results
Equipment Rentals drove the sequential revenue rebound
Consolidated revenue rose 22.89% QoQ, with operating profit increasing 39.80% as revenue growth outpaced the 15.67% rise in expenses. Management said Equipment Rentals grew 57% in Q2FY27 and accounted for over 70% of revenue. The company also said its Warehousing business returned to profit as activity picked up.
Lower depreciation supported the profit step-up
Operating margin expanded by 4.11 percentage points to 33.98% because revenue grew faster than expenses. Depreciation fell 10.47% QoQ, more than offsetting the 10.28% increase in interest cost and helping profit before tax rise 444.59%. Other income contributed 7.53% of pre-tax profit, while the 0.09-percentage-point reduction in the tax rate had only a limited effect on net profit.
Fleet spending is ahead of plan, with leverage at its limit
Management said the company invested Rs 106.6 cr in its fleet during H1, ahead of its Rs 80–100 cr full-year plan, and that most of the equipment is being commissioned through Q3. The company told analysts that this investment has taken net debt to equity to the upper limit it set for itself, while manpower, transportation and depreciation costs have weighed on margins. Management said it expects these costs to ease as the new fleet is deployed and specialised services stabilise.
Margin was above the Services peer median
The 33.98% operating margin was 12.25 percentage points above the 21.73% median for the 21 Services peers that had reported the quarter. The stock rose 1.54% on the results date, with traded volume at 4.68 times the reference level. Management said it remains on course for the lower end of its 20–25% FY27 revenue-growth target and expects FY27 operating margin around 35%, with an exit closer to its 37–38% band.
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 | ₹83 cr | ₹68 cr | +22.89% |
| Other income | ₹1 cr | ₹1 cr | +82.00% |
| Expenses | ₹55 cr | ₹47 cr | +15.67% |
| Operating profit | ₹28 cr | ₹20 cr | +39.80% |
| Operating margin (%) | 33.98% | 29.87% | — |
| Interest | ₹3 cr | ₹3 cr | +10.28% |
| Depreciation | ₹14 cr | ₹16 cr | -10.47% |
| Profit before tax | ₹12 cr | ₹2 cr | +444.59% |
| Tax | ₹3 cr | ₹1 cr | +442.86% |
| Net profit | ₹9 cr | ₹2 cr | +445.18% |
| EPS (₹) | ₹1.15 | ₹0.21 | +447.62% |
Operating margin of 33.98% compares with a Services sector median of 21.73% across 21 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.54% | +0.49% |
Volume on the results session was 4.68× 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.
This quarter
- Equipment Rentals grew 57% in the second quarter and accounted for over 70% of revenue.
- The Warehousing business returned to profit as activity picked up in the second quarter.
Guidance & outlook
- The company remains on course for the lower end of its 20–25% revenue growth target for FY27.
- The company expects FY27 operating margin to be around 35% and to exit the year closer to its 37–38% band.
- The company expects manpower, transportation and depreciation costs to ease as the new fleet is deployed and specialized services stabilize.
Expansion
- The company invested ₹106.6 crore in its fleet during H1, ahead of its ₹80–100 crore full-year plan.
- Most of the newly purchased equipment is being commissioned through Q3 and will then begin earning revenue.
New orders
- The company’s executable order book for FY27 stands at ₹163 crore.
New initiatives
- The company incorporated Tarachand Metallix Limited as a wholly owned metal processing and manufacturing platform.
- Tarachand Metallix Limited was incorporated as a 100% wholly owned subsidiary on January 6, 2026.
Problems & risks
- Fleet investment took net debt to equity to the upper limit set by the company, while manpower, transportation and depreciation costs weighed on margins.
- First-quarter performance caused first-half profit after tax to fall below the prior year.
What to watch
- Whether operating margin moves toward the around-35% FY27 level cited by management.
- Whether the Rs 106.6 cr H1 fleet investment begins contributing revenue as equipment is commissioned through Q3.
- Whether interest cost moderates after rising 10.28% QoQ while net debt to equity remains at management's stated upper limit.