Welspun Enterprises' operating margin jumps 27.15 points QoQ
Revenue growth far outpaced expenses, though other income and a lower tax rate also supported the standalone profit surge.
Filed 05 Nov 2026, 20:03 IST · after market close · Welspun Enterprises Ltd (WELENT)
Key takeaways
- Revenue rose 67.33% QoQ while expenses increased 16.06%, lifting operating margin by 27.15 percentage points.
- Other income contributed 12.03% of pre-tax profit, while the tax rate fell 7.05 percentage points to support net profit growth.
- Standalone operating margin of 38.55% was 27.05 percentage points above the 11.5% median for 174 Industrials peers.
Price around the results
Revenue acceleration reset the operating margin
Welspun Enterprises reported standalone revenue growth of 67.33% QoQ in Q2FY27, while expenses rose 16.06%. The resulting operating margin expansion of 27.15 percentage points shows that operating leverage, rather than cost inflation, drove the quarter. Net profit rose 396.87% QoQ, with EPS increasing 396.41% to Rs 22.14.
Other income and tax rate lifted reported profit
Other income accounted for 12.03% of pre-tax profit, making it a meaningful contributor to the quarter's earnings quality. The tax rate fell 7.05 percentage points QoQ, while interest expense rose 48.87%, partly offsetting the operating improvement. The 38.55% operating margin was 27.05 percentage points above the 11.5% median among 174 Industrials peers that had reported.
Project progress contrasts with WMEL pressure
The company's presentation said the Panjrapur Water Treatment Plant had reached approximately 80% physical progress, while 453 of 1,068 Uttar Pradesh Jal Jeevan Mission schemes had been completed. It also reported a WMEL order book of approximately Rs 2,279 cr as of 30 September 2026. Management said WMEL revenue fell 18% YoY to Rs 139 cr and its EBITDA margin declined 272 basis points to 18.0%; it also said AWEL expects production to start in FY29.
Sequential improvement, with no post-close reaction yet
Operating margin improved from 11.4% in Q1FY27 to 38.55% in Q2FY27, reversing the weak sequential profitability seen in the previous quarter. The results were filed after market close, so the stock's immediate response is not yet part of this read.
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 | ₹909 cr | ₹543 cr | +67.33% |
| Other income | ₹45 cr | ₹37 cr | +18.76% |
| Expenses | ₹559 cr | ₹481 cr | +16.06% |
| Operating profit | ₹350 cr | ₹62 cr | +465.56% |
| Operating margin (%) | 38.55% | 11.40% | — |
| Interest | ₹22 cr | ₹15 cr | +48.87% |
| Depreciation | ₹3 cr | ₹3 cr | -9.00% |
| Profit before tax | ₹370 cr | ₹82 cr | +353.66% |
| Tax | ₹70 cr | ₹21 cr | +230.05% |
| Net profit | ₹300 cr | ₹60 cr | +396.87% |
| EPS (₹) | ₹22.14 | ₹4.46 | +396.41% |
Operating margin of 38.55% compares with a Industrials sector median of 11.50% across 174 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The Panjrapur Water Treatment Plant achieved approximately 80% physical progress.
- 453 of 1,068 Uttar Pradesh Jal Jeevan Mission schemes were completed.
Guidance & outlook
- AWEL expects production to start in FY29.
New orders
- WMEL reported an order book of approximately ₹2,279 crore as of 30 September 2026.
New initiatives
- AWEL is a 65:35 joint venture between the Adani Group and Welspun Enterprises and serves as the investment vehicle.
Problems & risks
- WMEL revenue from operations fell 18% year on year to ₹139 crore in Q2FY27.
- WMEL EBITDA margin declined by 272 basis points year on year to 18.0% in Q2FY27.
What to watch
- Whether standalone operating margin holds above 38.55% after the 27.15-percentage-point QoQ expansion.
- Whether WMEL revenue and EBITDA margin recover from the reported Rs 139 cr and 18.0%, respectively.
- Progress at Panjrapur beyond approximately 80% and completion beyond 453 of 1,068 Uttar Pradesh schemes.