Are Bannari Amman Sugars Ltd latest results good or bad?

Bannari Amman Sugars Ltd reported its Q3 FY26 results, showcasing a notable performance with record figures in both revenue and net profit. The company achieved net sales of ₹644.11 crores, reflecting a quarter-on-quarter growth of 12.68% and a year-on-year increase of 52.84%. This marks the highest quarterly revenue in the company's history, driven by favorable sugar prices and enhanced operational efficiency. Net profit for the quarter reached ₹48.39 crores, which is a 13.33% increase compared to the previous quarter and a significant 68.00% rise from the same quarter last year. The profit after tax (PAT) margin improved slightly to 7.51%, up from 7.47% in the prior quarter. However, the operating margin showed a contraction, coming in at 12.84%, down 24 basis points from the previous quarter and 173 basis points year-on-year, indicating rising input costs that have impacted profitability. For the nine-month period ending December 2025, the company reported total revenues of ₹1,634.38 crores, which is a 26.72% increase year-on-year, and a cumulative net profit of ₹106.34 crores, reflecting a 53.91% growth compared to the same period last year. Despite these strong quarterly results, the company faces structural challenges in the sugar industry, including regulatory constraints and limited pricing power. Additionally, the company's long-term growth trajectory remains modest, with a five-year sales growth rate of 2.97% and declining operating profits. The company also experienced a revision in its evaluation following these results, reflecting the market's assessment of its performance against the backdrop of ongoing industry challenges. Overall, while Bannari Amman Sugars Ltd has demonstrated impressive short-term operational results, the underlying structural issues and valuation concerns suggest a cautious outlook moving forward.