Expenses outpaced revenue, sending standalone margin down 17.52 points
Q2FY27 revenue rose 44.89% sequentially, but net profit fell 63.50% as operating profit dropped 67.12%.
Filed 28 Oct 2026, 11:46 IST · VARDHACRLC (VARDHACRLC)
Key takeaways
- Standalone operating margin fell 17.52 percentage points sequentially to 5.14% as expenses grew 77.71%, faster than revenue at 44.89%.
- Net profit declined 63.50% sequentially to Rs 5.92 cr despite revenue growth, as operating profit fell 67.12%.
- Other income contributed 36.70% of pre-tax profit, making reported earnings less purely operational.
Revenue growth did not translate into operating profit
In standalone Q2FY27 results, revenue grew 44.89% sequentially to Rs 113.38 cr, but expenses rose 77.71% to Rs 107.55 cr. With costs growing faster than revenue, operating profit fell 67.12% and operating margin narrowed by 17.52 percentage points to 5.14%.
Other income cushioned the pre-tax result
Other income fell 26.88% sequentially to Rs 2.91 cr, but still accounted for 36.70% of pre-tax profit. The tax rate rose 2.88 percentage points to 25.35%, adding to the pressure on net profit, which declined 63.50% sequentially.
Q2FY27 was sharply weaker than Q1FY27
Profit before tax fell 62.09% sequentially to Rs 7.93 cr, while interest expense increased 20.00%; depreciation was broadly unchanged, rising 1.35%. The available quarterly trend shows the 22.66% operating margin in Q1FY27 falling to 5.14% in Q2FY27.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹113 cr | ₹78 cr | +44.89% |
| Other income | ₹3 cr | ₹4 cr | -26.88% |
| Expenses | ₹108 cr | ₹61 cr | +77.71% |
| Operating profit | ₹6 cr | ₹18 cr | -67.12% |
| Operating margin (%) | 5.14% | 22.66% | — |
| Interest | ₹0 cr | ₹0 cr | +20.00% |
| Depreciation | ₹1 cr | ₹1 cr | +1.35% |
| Profit before tax | ₹8 cr | ₹21 cr | -62.09% |
| Tax | ₹2 cr | ₹5 cr | -57.23% |
| Net profit | ₹6 cr | ₹16 cr | -63.50% |
| EPS (₹) | ₹0.74 | ₹2.02 | -63.37% |
What to watch
- Whether operating margin recovers from 5.14% in the next reported quarter.
- Whether expense growth moderates from 77.71% sequentially.
- Whether other income remains near 36.70% of pre-tax profit.