Are AVG Logistics Ltd latest results good or bad?

AVG Logistics Ltd's latest financial results for Q2 FY26 (July-September 2025) reflect a complex operational landscape. The company reported a consolidated net profit of ₹5.08 crores, which represents a marginal quarter-on-quarter increase of 2.21% from ₹4.97 crores in the previous quarter. However, this figure marks a year-on-year decline of 5.58% compared to ₹5.38 crores in Q2 FY25. Revenue for the quarter reached ₹143.03 crores, indicating a sequential improvement of 14.41% from ₹125.02 crores in Q1 FY26. Yet, the year-on-year growth of 3.30% is relatively subdued, especially when compared to the previous year's performance. This suggests that while there is some recovery in revenue, the overall demand momentum remains weak, particularly in a sector where competitors have shown stronger growth. The operating margin (excluding other income) contracted to 16.97%, down from 18.90% in the previous quarter, reflecting rising operational costs that the company has struggled to manage effectively. Additionally, the interest coverage ratio fell to 3.05 times, the lowest in recent quarters, indicating increasing financial pressure due to higher interest expenses. Overall, AVG Logistics appears to be navigating significant operational challenges, with rising costs impacting profitability and a concerning trend in capital efficiency as indicated by declining return on equity (ROE) and return on capital employed (ROCE). The company has also experienced a notable reduction in promoter stake, which may raise governance concerns. In light of these factors, AVG Logistics has seen an adjustment in its evaluation, reflecting the ongoing challenges and the need for strategic improvements to enhance operational performance and financial stability.