Other Income in Quarterly Results: When Treasury Gains and One-Offs Inflate Profit

Profit after tax makes the headline. It is not one clean number. It is what the company earned from its main work plus what it earned from everything else. Other income in quarterly results is that everything-else line: interest on cash, dividends, investment gains, forex gains and similar bits. Most quarters it is small and boring. Some quarters it is the whole reason profit jumped. This guide shows where the line sits, what usually sits inside it, how it differs from exceptional items, and a two-minute test for whether growth came from the business or from the treasury. It builds on our main guide to how to analyse quarterly results of a company, and every company figure below comes from a filing or results report linked where it is used.

What other income in quarterly results actually covers

In an Indian results statement, the income block at the top usually has three rows: revenue from operations, other income, and total income. Zerodha Varsity’s chapter on understanding the P&L statement calls other income revenue from non-operating sources — income that is not related to the company’s main business. Its worked example, Amara Raja Batteries’ FY14 accounts, lists interest on bank deposits, dividends, insurance claims and royalty income inside that line.

Investopedia’s entry on non-operating income says the same thing in general terms: income from activities outside core operations, with common sources including dividend income, investment profits or losses, and foreign exchange gains or losses. It also warns that high non-operating income can obscure poor operating performance. That warning is why we look twice at this line every quarter.

Typical items you will find in the notes behind other income for an Indian non-financial company include:

• Interest income on fixed deposits, bonds and loans to others, usually the biggest piece for cash-rich companies.
• Dividends from investments in other companies or mutual funds.
• Gains on investments, whether realised on sale or from marking investments to fair value.
• Foreign exchange gains that are not part of operating revenue.
• Miscellaneous receipts such as insurance claims, rent, royalties or write-backs.

How big should it be? Varsity’s own example gives a sense of normal proportions. Amara Raja reported net revenue from operations of Rs 3,436 crore and other income of about Rs 45.5 crore in FY14, so other income was roughly 1.3% of total revenue of Rs 3,482 crore (our calculation from the Varsity figures). The chapter’s rule of thumb is that other income usually forms, and should form, a small portion of total income, and that a large other income figure “usually draws a red flag, demanding a further investigation.”

Profit that grows faster than operating profit is not automatically suspect, but it always has an explanation, and that explanation is usually sitting in the other income line.

Other income versus exceptional items — do not mix them

Indian results statements keep two kinds of non-core income in different places. Mixing them up is the most common reading mistake we see.

• Other income sits at the top, in the income block, next to revenue from operations. It is part of “profit before exceptional items and tax”.
• Exceptional items sit lower down, after profit before exceptional items, as a separate line. Companies use it for one-off gains or losses that are unusual in size or nature.

Some data screens and quick summaries fold both into a single “other income” figure. The filing does not. The difference matters because the two lines tell you different things. Other income is often recurring — interest on a cash pile that will still be there next quarter. Exceptional items, by definition, are not expected to repeat.

Gujarat Mineral Development Corporation (GMDC) is a clean real-world example of why this matters. According to Business Standard’s report on GMDC’s Q2 FY26 results, published in November 2025, the company’s consolidated net sales fell 11.03% year on year to Rs 527.58 crore and profit before exceptional items and tax fell 14.71% to Rs 155.27 crore. Yet profit after tax jumped 264.27% to Rs 465.75 crore. The reason was an exceptional gain of Rs 474.43 crore, booked after the GST rate on lignite rose from 5% to 18% from September 22, 2025, which ended an inverted duty structure and let the company recognise input tax credit it had expensed in earlier periods. The stock fell 4.23% to Rs 564.75 on the day, according to the same report.

Put those figures side by side and the story flips. The one-time gain of Rs 474.43 crore was larger than the entire reported profit after tax of Rs 465.75 crore (our comparison of the two reported figures). The headline said profit more than tripled; the line above the exceptional item said the business earned less than a year earlier. A reader who looked only at PAT would have read the quarter backwards.

When banks book treasury gains as other income

Banks and NBFCs present results differently. Their core revenue is interest, so the key lines are net interest income (NII) and “other income” or “non-interest income”, which bundles fees, treasury gains from trading bonds, and recoveries from loans written off in earlier years. Treasury gains are the volatile part: when bond yields fall, bond prices rise and banks book profits on selling investments; when yields rise, those gains shrink.

Canara Bank’s September 2026 quarter shows the effect running in reverse. According to Business Standard’s Q2 FY27 report:

• Net profit rose 8.4% year on year to Rs 5,175 crore, from Rs 4,774 crore.
• Net interest income rose 20.4% to Rs 11,005 crore, from Rs 9,141 crore.
• Non-interest income fell 18.2% to Rs 5,772 crore.
• Treasury income fell 68.5% to Rs 499 crore, from Rs 1,583 crore a year earlier.
• Profit on sale of investments fell 87.4% to Rs 153 crore, from Rs 1,217 crore, as bond yields hardened.
• Recoveries in written-off accounts fell 25% to Rs 1,260 crore.
• Operating profit before provisions rose just 2% to Rs 8,758 crore, from Rs 8,588 crore.

CNBC-TV18’s coverage confirms the Rs 5,175 crore net profit and puts NII at Rs 11,004 crore, a rounding difference from Business Standard’s figure.

Here the other income line hid strength rather than weakness. The core lending engine, NII, grew more than 20%, but the year-on-year drop in treasury income alone was about Rs 1,084 crore (our calculation: Rs 1,583 crore minus Rs 499 crore), which swallowed most of the gain and left operating profit up only 2%. An investor who saw “profit up 8.4%” and “operating profit up 2%” without reading the other income breakdown might have concluded the bank’s business had stalled. The breakdown shows the opposite: the core grew fast, and a non-core line that had flattered the year-ago quarter fell back. Our Canara Bank Q2 results report has the rest of that quarter, including asset quality.

Other income can flatter a weak quarter or hide a strong one. The only way to know which is to take it out and look at what is left.

The divergence test: does profit grow faster than the core?

The simplest check takes two minutes with the results table in front of you.

1. Find profit before tax and other income for the current quarter and the same quarter last year. Use profit before exceptional items if there is an exceptional line.
2. Subtract other income from PBT for both periods. What is left is a rough measure of profit from the business itself.
3. Compare growth rates. If reported PBT grew much faster than PBT excluding other income, other income drove the growth. If the core grew faster, other income was a drag.
4. Work out other income as a share of PBT. A share that keeps rising quarter after quarter, while core profit is flat, is the pattern to worry about.

Billionbrains Garage Ventures, the listed company behind Groww, gives a recent worked example from its Q2 FY27 results filing on NSE. In the consolidated statement, for the quarter ended September 30, 2026 against the same quarter of 2025:

Reported PBT grew about 54%, while PBT excluding other income grew about 61% (both our calculations from the filing). Other income actually fell, and its share of pre-tax profit roughly halved. That is the clean result: profit growth came from the business, not from the treasury.

The same filing also shows why you should always compare like with like. In Groww’s standalone statement, other income for the quarter was Rs 194.24 crore, against Rs 100.21 crore in the June quarter and Rs 68.32 crore a year earlier, and it came to roughly a quarter of standalone PBT of Rs 781.23 crore (our calculation). The consolidated line, at Rs 39.01 crore, tells a very different story. Read consolidated numbers for the group picture, and do not mix a standalone other income figure with a consolidated profit figure.

Recurring cash interest or a one-off sale gain

Once the divergence test flags a large or fast-growing other income line, the next question is whether it will come back next quarter. The results table rarely says. The detail sits in the notes to the results, the investor presentation, or the annual report’s schedule of other income, which Varsity’s chapter recommends checking whenever the line looks large. Sort what you find into two buckets:

• Likely to recur: interest on a stable cash balance, regular dividends from long-held investments, and lease or rental income.
• Unlikely to recur at the same level: profit on selling an investment, property or business; fair-value gains on investments; write-backs of old provisions; one-time refunds or claims; and, for banks, treasury gains that depend on where bond yields move next.

A cash-rich company earning steady interest is not doing anything wrong. That interest is real and repeatable. It does, however, tell you something about capital allocation: the company is parking cash rather than putting it to work in the business, and a valuation that treats interest income as if it were operating profit will overstate what the business itself earns.

Seven checks before you trust a results-season profit number

1. Locate the line. Find other income in the income block and any exceptional items further down. Do not let a summary merge them.
2. Measure it. Work out other income as a share of total income and of PBT, for this quarter and the same quarter last year.
3. Run the divergence test. Compare growth in PBT with growth in PBT excluding other income.
4. Check the mix. Use the notes or presentation to split recurring items from one-offs.
5. Match the basis. Use consolidated with consolidated and standalone with standalone.
6. For banks, separate treasury from fees. Treasury gains depend on bond yields; fee income and NII depend on the business.
7. Link it to margins. Pair this check with EBITDA margin, which is meant to show operating performance on its own, but first confirm whether the company’s EBITDA figure includes other income.

Other income in quarterly results is usually a small, ordinary line. It is also the easiest place for a headline profit number to drift away from the business underneath. Strip it out, compare growth with and without it, and keep exceptional items separate. A two-minute check turns “profit up X%” into a clear answer on whether the company itself had a good quarter.