Are AVI Polymers Ltd latest results good or bad?

AVI Polymers Ltd has reported significant financial results for the quarter ending December 2025, marking a notable return to operational activity after a prolonged period of dormancy. The company achieved net sales of ₹132.32 crores, reflecting a substantial quarter-on-quarter growth of 348.54% compared to the previous quarter, where sales were just ₹29.50 crores. This resurgence in revenue is particularly striking given that the company had reported virtually no sales throughout the previous fiscal year. Net profit for the same quarter reached ₹7.02 crores, which also indicates a considerable quarter-on-quarter increase of 206.55% from ₹2.29 crores in the prior quarter. This profit performance, while impressive in percentage terms, is influenced by the low base effect from earlier periods when the company was largely inactive. However, it is important to note that while the absolute profit figures are encouraging, the operating margins have faced compression. The operating margin for Q3 FY26 was recorded at 8.15%, down from 9.80% in the previous quarter, and the PAT margin fell to 5.31% from 7.76%. This decline in margins suggests that as the company ramps up its trading activities, it is encountering higher operational costs. The financial data indicates a dramatic shift in AVI Polymers' operational status, transitioning from a period of inactivity to a phase of significant sales activity. Despite the positive sales and profit figures, there are concerns regarding the sustainability of this operational turnaround, particularly given the company's history of minimal activity prior to this quarter. Additionally, the company has experienced an adjustment in its evaluation, reflecting the mixed signals from its financial performance and operational history. Investors may want to monitor the upcoming quarters closely to assess whether this resurgence in sales can be maintained and whether operating margins can stabilize or improve.