Zim Labs narrows loss as operating margin rises to 5.15%
Revenue grew faster than expenses QoQ, but interest and depreciation kept PBT negative; the stock fell 4.49% on the filing day.
Filed 04 Nov 2026, 14:36 IST · Zim Laboratories Ltd (ZIMLAB)
Key takeaways
- Consolidated operating margin improved 2.55 percentage points QoQ to 5.15%, but remained 16.25 percentage points below the Healthcare peer median.
- Revenue grew 11.97% QoQ while expenses rose 9.04%, lifting operating profit 121.63% to Rs 5.43 cr.
- The consolidated net loss narrowed to Rs -2.05 cr from Rs -4.02 cr, while interest expense rose 8.24% and PBT remained negative at Rs -2.74 cr.
Price around the results
Revenue momentum improved in Q2FY27
Zim Laboratories reported consolidated revenue growth of 11.97% QoQ to Rs 105.45 cr, ahead of the 9.04% increase in expenses. That operating leverage lifted operating profit 121.63% to Rs 5.43 cr and raised margin from 2.60% in Q1FY27 to 5.15%. The improvement did not reach the reported PBT line, which remained negative at Rs -2.74 cr.
Interest and depreciation kept profit below zero
Interest expense increased 8.24% QoQ to Rs 3.94 cr, while depreciation rose 21.60% to Rs 6.53 cr, absorbing the operating profit. Other income of Rs 2.30 cr was equivalent to -83.94% of PBT because PBT remained negative, and it did not prevent a loss. The tax rate declined 2.78 percentage points to 25.14%, but the tax benefit narrowed to Rs -0.69 cr from Rs -1.56 cr.
Margin recovery still leaves Zim Labs near the sector floor
The 5.15% operating margin was 16.25 percentage points below the 21.40% median for the 69 Healthcare peers that had reported the same quarter. Zim Laboratories ranked fourth from the bottom on this measure. The available quarterly trend shows margin improving from 2.60% in Q1FY27, but the business remained loss-making at the PBT and net-profit levels.
Initial market response was negative
The stock fell 4.49% on the results day, with a -1.26% opening gap and a -5.12% relative return. Trading volume was 0.65 times the reference level. The reaction data is incomplete, so this move is best read as the initial market response rather than a full-session outcome.
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 | ₹105 cr | ₹94 cr | +11.97% |
| Other income | ₹2 cr | ₹1 cr | +132.32% |
| Expenses | ₹100 cr | ₹92 cr | +9.04% |
| Operating profit | ₹5 cr | ₹2 cr | +121.63% |
| Operating margin (%) | 5.15% | 2.60% | — |
| Interest | ₹4 cr | ₹4 cr | +8.24% |
| Depreciation | ₹7 cr | ₹5 cr | +21.60% |
| Profit before tax | ₹-3 cr | ₹-6 cr | +50.81% |
| Tax | ₹-1 cr | ₹-2 cr | +55.77% |
| Net profit | ₹-2 cr | ₹-4 cr | +49.00% |
| EPS (₹) | ₹-0.38 | ₹-0.75 | +49.33% |
Operating margin of 5.15% compares with a Healthcare sector median of 21.40% across 69 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.49% | -5.12% |
Volume on the results session was 0.65× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 5.15%.
- Whether PBT moves above Rs -2.74 cr as interest and depreciation remain key deductions.
- Whether revenue growth stays ahead of expense growth after 11.97% versus 9.04% QoQ.