Operating loss deepens despite 73.68% sequential revenue growth
Expenses grew faster than revenue, while other income drove the Rs 0.31 cr consolidated profit despite a Rs 1.98 cr operating loss.
Filed 05 Nov 2026, 00:07 IST · Zenith Steel Pipes & Industries Ltd (ZENITHSTL)
Key takeaways
- Consolidated operating margin fell 14.2 percentage points sequentially to -15.86% as expenses grew 97.95%, faster than revenue growth of 73.68%.
- Net profit of Rs 0.31 cr was largely supported by Rs 3.4 cr of other income, which represented 1030.3% of profit before tax.
- Zenith Steel's -15.86% operating margin ranked second from the bottom among 146 Industrials companies that had reported the quarter.
Price around the results
Revenue rose, but operating loss widened
Consolidated revenue increased 73.68% sequentially to Rs 12.47 cr, but expenses grew 97.95% to Rs 14.45 cr. The faster cost growth pushed operating profit to a loss of Rs 1.98 cr from a loss of Rs 0.12 cr in Q1FY27, cutting operating margin by 14.2 percentage points to -15.86%.
Other income supplied the reported profit
Profit before tax was Rs 0.33 cr despite the operating loss because other income rose 104.82% sequentially to Rs 3.4 cr. Other income accounted for 1030.3% of profit before tax, so the Rs 0.31 cr net profit does not reflect operating profitability. The tax rate remained unchanged at 0.0%, while interest increased 1.64%.
Margin was far below the Industrials peer median
Zenith Steel's -15.86% operating margin was 28.11 percentage points below the 12.25% median for 146 Industrials peers that had reported the quarter. The company ranked second from the bottom on this measure. Sequentially, the margin moved from -1.66% in Q1FY27 to -15.86%, marking a sharp deterioration across the two quarters shown.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹12 cr | ₹7 cr | +73.68% |
| Other income | ₹3 cr | ₹2 cr | +104.82% |
| Expenses | ₹14 cr | ₹7 cr | +97.95% |
| Operating profit | ₹-2 cr | ₹-0 cr | -1550.00% |
| Operating margin (%) | -15.86% | -1.66% | — |
| Interest | ₹1 cr | ₹1 cr | +1.64% |
| Depreciation | ₹0 cr | ₹0 cr | -2.08% |
| Profit before tax | ₹0 cr | ₹0 cr | -28.26% |
| Tax | ₹0 cr | ₹0 cr | — |
| Net profit | ₹0 cr | ₹0 cr | -29.55% |
| EPS (₹) | ₹0.02 | ₹0.03 | -33.33% |
Operating margin of -15.86% compares with a Industrials sector median of 12.25% across 146 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from -15.86% in the next quarter.
- Whether expense growth moderates from the sequential +97.95% pace.
- Whether other income remains material relative to the Rs 0.33 cr profit before tax.