Are Creative Newtech latest results good or bad?

Creative Newtech's latest financial results for Q2 FY26 reveal a significant surge in both revenue and net profit, indicating strong operational momentum. The company reported net sales of ₹655.75 crores, reflecting a year-on-year growth of 59.39% compared to ₹411.42 crores in Q2 FY25. This growth is particularly noteworthy as it marks the highest quarterly revenue in at least seven quarters, driven by robust demand across technology distribution channels.
Net profit for the quarter reached ₹18.95 crores, which represents a year-on-year increase of 43.34% from ₹13.22 crores in the same quarter last year. Additionally, the operating profit margin (excluding other income) improved to 3.49%, up from 2.98% in Q2 FY25, indicating enhanced operational efficiency despite the low-margin nature of the technology distribution sector.

The company also reported a strong return on equity (ROE) of 18.06%, showcasing effective capital deployment. However, it is important to note that Creative Newtech has faced challenges in the market, with its stock declining 26.83% over the past year, which contrasts with the Sensex's gain of 7.39%. This decline reflects investor concerns regarding valuation sustainability and competitive pressures within the industry.

Overall, Creative Newtech's recent performance highlights a strong operational foundation with significant revenue and profit growth, although it is accompanied by ongoing market challenges. The company has seen an adjustment in its evaluation, reflecting the evolving dynamics of its operational performance and market conditions.