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

Century Plyboards (India) Ltd's latest financial results for the quarter ending September 2025 indicate a notable recovery in revenue, which rose to ₹1,385.53 crores, reflecting an 18.49% sequential increase and a 17.06% year-on-year growth. This growth is attributed to improved demand conditions across its product portfolio, particularly driven by the festive season and ongoing real estate activities. The company reported a consolidated net profit of ₹68.90 crores, marking a significant 72.42% increase year-on-year and a 32.86% rise sequentially. Operating profit, excluding other income, stood at ₹174.62 crores, leading to an operating margin of 12.60%, which is an improvement from 9.41% in the same quarter last year. However, while the operating margin showed some year-on-year expansion, it only improved marginally from the previous quarter, indicating ongoing challenges related to rising raw material costs and competitive pressures. Despite the positive revenue and profit figures, the company faces challenges with rising interest costs, which surged to ₹31.09 crores from ₹17.22 crores year-on-year, reflecting an 80.55% increase. This rise in interest expenses is a concern as it consumes a larger portion of operating profits, now accounting for 31.76% of operating profit compared to 15.47% a year ago. Additionally, the company's long-term debt has increased significantly, raising concerns about its financial leverage and capital efficiency. The financial performance also highlights a decline in return on equity (ROE) to 9.39%, down from an average of 15.97% over the past five years, indicating that recent investments have yet to yield adequate returns. The company's evaluation has seen an adjustment, reflecting the mixed signals from strong topline growth but deteriorating interest coverage and working capital metrics. Overall, Century Plyboards demonstrates strong market leadership and operational recovery amid a challenging environment, but it must navigate rising costs and leverage concerns to sustain its growth trajectory.