Tera Software scales up, but margin slips as costs outpace revenue
Consolidated revenue rose +84.18% sequentially, while expenses grew +87.03%; operating margin fell 1.33 percentage points to 13.01%.
Filed 11 Nov 2026, 21:28 IST · after market close · Tera Software Ltd (TERASOFT)
Key takeaways
- Consolidated revenue rose +84.18% sequentially, but faster expense growth pushed operating margin down 1.33 percentage points to 13.01%.
- Net profit increased +72.90% to Rs 8.04 cr, while other income contributed 10.38% of profit before tax and the tax rate rose 0.75 percentage points.
- Tera Software's 13.01% operating margin was 2.85 percentage points below the 15.86% median of 77 reported IT peers.
Price around the results
Revenue growth came with a smaller operating conversion
Tera Software's consolidated revenue increased +84.18% sequentially to Rs 91.85 cr, lifting operating profit +67.13% to Rs 11.95 cr. Expenses grew faster, at +87.03%, so the operating margin narrowed to 13.01% from 14.34% in Q1FY27. Profit before tax still rose +74.79% to Rs 10.40 cr.
Higher interest and tax limited the profit conversion
Interest expense increased +10.60% sequentially to Rs 2.40 cr, adding pressure below the operating line. The tax rate rose 0.75 percentage points to 22.68%, so the net profit increase was not helped by a lower tax burden. Other income was Rs 1.08 cr, equal to 10.38% of profit before tax, making it a meaningful but limited contributor to reported profit.
Margin trails the reported IT peer median
The company's 13.01% operating margin was below the 15.86% median among 77 Information Technology peers that had reported the same quarter. Tera Software ranked 29th from the bottom on this measure, leaving cost growth as the key difference between its revenue acceleration and operating-profit growth.
Results were filed after market close
The consolidated results were filed after market close on 11 Nov 2026. The immediate stock response is therefore not covered here, and there is no past-results reaction history to put this quarter against.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹92 cr | ₹50 cr | +84.18% |
| Other income | ₹1 cr | ₹1 cr | -9.24% |
| Expenses | ₹80 cr | ₹43 cr | +87.03% |
| Operating profit | ₹12 cr | ₹7 cr | +67.13% |
| Operating margin (%) | 13.01% | 14.34% | — |
| Interest | ₹2 cr | ₹2 cr | +10.60% |
| Depreciation | ₹0 cr | ₹0 cr | +4.55% |
| Profit before tax | ₹10 cr | ₹6 cr | +74.79% |
| Tax | ₹2 cr | ₹1 cr | +80.15% |
| Net profit | ₹8 cr | ₹5 cr | +72.90% |
| EPS (₹) | ₹6.42 | ₹3.71 | +73.05% |
Operating margin of 13.01% compares with a Information Technology sector median of 15.86% across 77 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +9.92% | +9.75% |
Volume on the results session was 5.37× its 20-day average.
What to watch
- Whether operating margin recovers from 13.01% after the 1.33-percentage-point sequential decline.
- Whether expense growth moderates from +87.03% relative to revenue growth of +84.18%.
- Whether interest expense moves away from Rs 2.40 cr and other income remains near 10.38% of profit before tax.