Xchanging expands margin as expenses fall faster than revenue
Revenue was slightly lower sequentially, but operating profit improved; higher taxes limited the gain in consolidated net profit.
Filed 30 Oct 2026, 17:35 IST · after market close · Xchanging Solutions Ltd (XCHANGING)
Key takeaways
- Consolidated operating margin rose 1.10 percentage points to 34.64% quarter-on-quarter as expenses fell 2.44% while revenue declined 0.80%.
- Net profit increased 0.46% quarter-on-quarter despite a 1.53-percentage-point rise in the tax rate, while other income contributed 17.39% of pre-tax profit.
- Xchanging Solutions’ 34.64% operating margin was 15.14 percentage points above the 19.50% median for 37 reported IT peers.
Price around the results
Lower costs offset softer sequential revenue
In the consolidated results, revenue declined 0.80% quarter-on-quarter, but expenses fell 2.44%, allowing operating profit to rise 2.45%. The faster cost reduction lifted operating margin by 1.10 percentage points to 34.64%.
Other income remained material to pre-tax profit
Other income accounted for 17.39% of pre-tax profit, so reported profit was not driven entirely by operations. Interest expense was unchanged quarter-on-quarter, while the tax rate rose 1.53 percentage points; net profit therefore increased only 0.46% and EPS was unchanged.
Margin stayed well above the reported IT peer median
Xchanging Solutions’ 34.64% operating margin was 15.14 percentage points above the 19.50% median among 37 Information Technology peers that had reported the same quarter. The available quarter trend shows an improvement from 33.54% in Q1FY27, rather than a margin decline.
Results were filed after market close
The company filed these consolidated results after market close on 30 October 2026. The immediate stock-market response is therefore not covered here.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹53 cr | ₹54 cr | -0.80% |
| Other income | ₹4 cr | ₹4 cr | +2.53% |
| Expenses | ₹35 cr | ₹36 cr | -2.44% |
| Operating profit | ₹18 cr | ₹18 cr | +2.45% |
| Operating margin (%) | 34.64% | 33.54% | — |
| Interest | ₹1 cr | ₹1 cr | +0.00% |
| Depreciation | ₹0 cr | ₹0 cr | — |
| Profit before tax | ₹21 cr | ₹20 cr | +2.59% |
| Tax | ₹6 cr | ₹5 cr | +8.61% |
| Net profit | ₹15 cr | ₹15 cr | +0.46% |
| EPS (₹) | ₹1.36 | ₹1.36 | +0.00% |
Operating margin of 34.64% compares with a Information Technology sector median of 19.50% across 37 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 34.64% in the next reported quarter.
- Whether revenue recovers from Rs 53.21 cr without expenses growing faster than revenue.
- Whether other income’s contribution remains near 17.39% of pre-tax profit and the tax rate moves from 27.63%.