Are Agarwal Industrial Corporation Ltd latest results good or bad?

Agarwal Industrial Corporation Ltd's latest financial results for Q2 FY26 reveal significant operational challenges. The company reported net sales of ₹244.80 crores, which represents a substantial decline of 58.76% compared to the previous quarter and a 24.83% decrease year-on-year. This marks the lowest quarterly revenue figure in recent history, raising concerns about demand dynamics and the company's market position. Despite the revenue decline, the operating margins demonstrated some resilience, improving to 11.44% from 6.09% in the prior quarter, indicating potential success in cost management or an improved product mix. However, the absolute operating profit before depreciation, interest, tax, and other income (PBDIT) of ₹28.01 crores was still the lowest recorded, emphasizing that the volume decline outweighed the margin gains. The net profit for the quarter was ₹11.99 crores, reflecting a decrease of 7.98% from the previous quarter and a significant 34.98% drop year-on-year. The profit after tax margin improved to 4.90% from 2.20% in Q1 FY26, suggesting some operational leverage benefits despite lower sales volumes. The company's balance sheet shows rising long-term debt and increasing working capital strain, with trade payables and current liabilities growing year-on-year. The return on capital employed (ROCE) has also seen a decline, averaging 12.30% in the latest half-year, marking a historic low and indicating deteriorating capital productivity. Overall, the financial results indicate a troubling trend for Agarwal Industrial Corporation Ltd, with the company experiencing a significant revenue collapse and operational volatility that necessitates immediate management attention. Additionally, the company saw an adjustment in its evaluation, reflecting the challenges faced in the current operational environment.