Tenneco India profit jumps, but margin slips and stock falls 5.30%
Sequential profit growth was aided by a swing in other income, while costs grew faster than revenue and operating margin fell to 16.57%.
Filed 31 May 2026, 01:01 IST · after market close · Tenneco Clean Air India Ltd (TENNIND)
Key takeaways
- Consolidated net profit rose 40.38% sequentially, helped by the swing from other income of -Rs 22.49 cr to Rs 11.4 cr.
- Operating margin narrowed 0.74 percentage points to 16.57% as expenses grew 21.87%, faster than revenue growth of 20.79%.
- The stock fell 5.30% on June 1 and underperformed the market by 4.60% after the results.
Price around the results
Profit rebound was driven partly by other income
Tenneco Clean Air India reported consolidated net profit growth of 40.38% sequentially, while revenue increased 20.79%. The recovery in profit before tax was helped by other income moving from a loss of Rs 22.49 cr in Q3FY26 to income of Rs 11.4 cr in Q4FY26; other income accounted for 4.93% of current-quarter pre-tax profit. The tax rate changed by only 0.07 percentage points, so it was not a material profit driver.
Costs outpaced revenue and reduced operating margin
Expenses grew 21.87% sequentially against revenue growth of 20.79%, narrowing operating margin by 0.74 percentage points to 16.57%. Interest expense also rose 23.03%, while depreciation increased 1.24%. Even after the decline, the company’s margin was 1.76 percentage points above the 14.81% median for 93 reported Consumer Discretionary peers.
Margin direction remains uneven across the last three quarters
Operating margin improved from 16.93% in Q2FY26 to 17.31% in Q3FY26 before falling to 16.57% in Q4FY26. This makes the latest move a reversal of the prior quarter’s improvement rather than a third straight decline. Sequential momentum was therefore better for revenue and profit than for operating efficiency.
Management flagged expansion and new order wins
Management said it plans INR 690 million of manufacturing investment in Western India, taking total announced expansion investment to INR 1,400 million, and separately announced INR 710 million of expansion in Northern India. The company said it is scaling manufacturing capabilities to meet rising customer demand, citing an H2 FY2026 order-book addition of INR 60,254 million and incremental lifetime orders of INR 124,000 million as of March 31, 2026. Management also said it completed a Euro VII proof of concept for a European truck OEM and entered the engine bearings business at a large Japanese OEM, while reporting geopolitical pressure since the end of February 2026.
The first trading session saw a sharp negative reaction
The stock fell 5.30% on June 1, despite opening 1.62% above the prior close, and was down 2.11% after five sessions. Its five-session relative return was -0.30%, while the day-one relative return was -4.60%.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹1,552 cr | ₹1,285 cr | +20.79% |
| Other income | ₹11 cr | ₹-22 cr | — |
| Expenses | ₹1,295 cr | ₹1,063 cr | +21.87% |
| Operating profit | ₹257 cr | ₹223 cr | +15.63% |
| Operating margin (%) | 16.57% | 17.31% | — |
| Interest | ₹9 cr | ₹7 cr | +23.03% |
| Depreciation | ₹29 cr | ₹28 cr | +1.24% |
| Profit before tax | ₹231 cr | ₹165 cr | +40.52% |
| Tax | ₹64 cr | ₹46 cr | +40.87% |
| Net profit | ₹167 cr | ₹119 cr | +40.38% |
| EPS (₹) | ₹4.13 | ₹2.94 | +40.48% |
Operating margin of 16.57% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.30% | -4.60% |
| Next session | -1.71% | — |
| 5 sessions | -2.11% | -0.30% |
| 15 sessions | -0.26% | — |
| 30 sessions | -3.26% | — |
Volume on the results session was 1.17× 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.
Expansion
- The company plans INR 690 million of manufacturing investment in Western India, taking total announced expansion investment to INR 1,400 million.
- The company announced INR 710 million of expansion in Northern India.
- The company is scaling manufacturing capabilities to meet rising customer demand.
New orders
- The company added INR 60,254 million to its order book in the second half of FY2026.
- The incremental lifetime order book reached INR 124,000 million as of March 31, 2026.
New initiatives
- The company completed a strategic proof of concept for a leading European truck OEM for Euro VII emissions legislation.
- The company secured strategic entry into the engine bearings business at a large Japanese OEM.
Problems & risks
- The company reported geopolitical headwinds since the end of February 2026.
What to watch
- Whether operating margin recovers from 16.57% after the 0.74-percentage-point sequential decline.
- Progress on the company’s planned INR 690 million Western India manufacturing investment and INR 710 million Northern India expansion.
- Whether order-book momentum builds on the INR 60,254 million H2 FY2026 addition and INR 124,000 million incremental lifetime order book.