Are Century Plyboards (India) Ltd latest results good or bad?

Century Plyboards (India) Ltd's latest financial results for Q2 FY26 indicate a notable performance in terms of net profit and net sales. The consolidated net profit reached ₹68.90 crores, reflecting a year-on-year increase of 72.42% and a quarter-on-quarter rise of 32.86%. This growth in profit is accompanied by a significant increase in net sales, which amounted to ₹1,385.53 crores, marking a 17.06% year-on-year growth and an 18.49% increase sequentially from the previous quarter. The operating margin, excluding other income, expanded to 12.60%, up from 9.41% in the same quarter last year, indicating improved cost management and operational efficiencies. The profit after tax (PAT) margin also improved to 5.12%, up from 3.38% a year ago. However, while these results demonstrate strong revenue momentum, the company faces challenges related to cash flow, as it reported negative operating cash flow of ₹2.00 crores for FY25, a significant decline from the previous year. Additionally, the interest costs surged by 80.53% year-on-year, raising concerns about the sustainability of profit growth given the increased borrowing to fund capacity expansion. The interest coverage ratio has also declined, suggesting a tightening of financial flexibility. In summary, Century Plyboards has shown strong revenue and profit growth in its latest results, but the underlying operational challenges, particularly regarding cash flow and rising interest expenses, warrant careful monitoring. The company has experienced an adjustment in its evaluation, reflecting these mixed operational trends.