Are Bhagiradha Chem. latest results good or bad?

Bhagiradha Chemicals' latest financial results for the quarter ending September 2025 indicate a significant operational turnaround following a challenging previous quarter. The company reported a net profit of ₹5.50 crores, reflecting a notable sequential growth of 38.19% compared to the prior quarter. Additionally, revenue reached ₹140.10 crores, marking a 13.18% increase quarter-on-quarter and a substantial 35.06% increase year-on-year, which is the highest quarterly revenue recorded by the company.
The operating margin improved to 10.75%, up from 7.27% in the previous quarter, suggesting enhanced cost management and operational efficiency. However, while these improvements are encouraging, they must be viewed in the context of the company's performance over the past fiscal year, where annual net profit declined to ₹13.00 crores from ₹18.00 crores in FY24. The current quarter's recovery leaves the company still trailing behind its historical profitability levels.

Despite the positive trends in revenue and margins, the company faces ongoing challenges, particularly related to working capital management and cash flow. The balance sheet shows significant stress, with a reported negative operating cash flow of ₹52.00 crores in FY25, raising concerns about the sustainability of its earnings. Furthermore, the rising interest costs, which increased to ₹4.06 crores in Q2 FY26, reflect the company's expanded borrowing to support working capital and capital expenditures.

Overall, while Bhagiradha Chemicals demonstrated operational improvements in the latest quarter, the company is still navigating significant financial challenges that warrant careful monitoring. Additionally, there has been an adjustment in its evaluation, reflecting the complexity of its current financial situation.