Are AVT Natural Products Ltd latest results good or bad?

AVT Natural Products Ltd's latest financial results reveal a complex picture of growth coupled with significant operational challenges. For the quarter ending December 2025, the company reported net sales of ₹194.01 crores, reflecting a year-on-year growth of 12.23%. This marks a notable achievement, as it represents the highest quarterly revenue in the company's recent history, surpassing the previous peak recorded a year earlier. However, this topline growth is overshadowed by a sharp contraction in profitability metrics. The operating margin fell to 11.91%, down from 17.30% in the same quarter last year, indicating substantial cost pressures that have impacted operational efficiency. Additionally, net profit for the quarter decreased by 19.58% year-on-year to ₹17.37 crores, despite a sequential improvement from the previous quarter. The profit after tax margin also contracted significantly, highlighting the challenges in maintaining profitability amidst rising costs. Over the nine-month period ending December 2025, net profit grew by 26.31% to ₹42.78 crores; however, this growth was largely attributed to a weak base from the previous year, suggesting that underlying operational challenges persist. The company's return on equity (ROE) has also declined to 11.73%, indicating a decrease in capital efficiency. Furthermore, AVT Natural Products faces issues with working capital management, as evidenced by a negative operating cash flow of ₹32 crores due to a significant increase in working capital requirements. This raises concerns about liquidity and the company's ability to convert sales into cash effectively. In terms of market positioning, the company operates in a sector characterized by commodity price volatility and intense competition, which further complicates its operational landscape. The shareholding structure remains stable, with a strong promoter holding of 75%, but there is minimal institutional interest, which may limit liquidity and contribute to stock volatility. Overall, while AVT Natural Products Ltd achieved revenue growth in its latest results, the significant margin compression and declining profitability metrics warrant close scrutiny. The company has seen an adjustment in its evaluation, reflecting these ongoing operational challenges.