Zuari's Q2 margin narrows as revenue drops 35.35% QoQ
Costs fell more slowly than revenue, while other income supplied 75.34% of consolidated profit before tax.
Filed 02 Nov 2026, 13:50 IST · Zuari Agro Chemicals Ltd (ZUARI)
Key takeaways
- Consolidated revenue fell 35.35% QoQ, while expenses declined 34.63%, narrowing operating margin by 1.01 percentage points to 8.60%.
- Other income contributed 75.34% of consolidated profit before tax, making reported profit quality a key issue this quarter.
- Zuari's operating margin was 6.03 percentage points below the 14.63% median for 75 reported Commodities peers.
Price around the results
Revenue contraction weakens operating profit
Consolidated revenue declined 35.35% QoQ, and operating profit fell 42.16%, a sharper drop than sales. Expenses decreased 34.63%, so they fell more slowly than revenue and operating margin narrowed by 1.01 percentage points to 8.60%. This was the second quarter in the available trend, so it shows sequential deterioration rather than a multi-quarter direction.
Other income carried most of pre-tax profit
Other income fell 65.43% QoQ but still accounted for 75.34% of consolidated profit before tax. The tax rate rose 4.93 percentage points to 15.93%, while interest expense increased 2.37%, adding pressure below operating profit. The combination of a lower operating contribution and a large other-income share makes net profit less representative of core operations this quarter.
Margin trails the Commodities peer set
Zuari's 8.60% operating margin was 6.03 percentage points below the 14.63% median among 75 Commodities companies that had reported. It ranked 17th from the bottom on this measure, placing the quarter below the sector comparison despite the absence of a year-on-year comparison.
Initial market reaction was modestly positive
The stock was up 0.38% on the reaction date, while its relative performance was -1.30%; trading volume was 7.23 times the reference level. No completed post-results history is available here to judge whether that move was typical for Zuari.
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 | ₹398 cr | ₹615 cr | -35.35% |
| Other income | ₹33 cr | ₹97 cr | -65.43% |
| Expenses | ₹364 cr | ₹556 cr | -34.63% |
| Operating profit | ₹34 cr | ₹59 cr | -42.16% |
| Operating margin (%) | 8.60% | 9.61% | — |
| Interest | ₹18 cr | ₹18 cr | +2.37% |
| Depreciation | ₹5 cr | ₹5 cr | +3.46% |
| Profit before tax | ₹44 cr | ₹133 cr | -66.67% |
| Tax | ₹7 cr | ₹15 cr | -51.74% |
| Net profit | ₹37 cr | ₹119 cr | -68.52% |
| EPS (₹) | ₹8.87 | ₹28.17 | -68.51% |
Operating margin of 8.60% compares with a Commodities sector median of 14.63% across 75 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.38% | -1.30% |
Volume on the results session was 7.23× its 20-day average.
What to watch
- Whether operating margin recovers from 8.60% toward the Q1FY27 level of 9.61%.
- Whether other income's 75.34% share of profit before tax falls as operating profit contributes more.
- Whether interest expense moves down from Rs 18.17 cr after rising 2.37% QoQ.