Are Creative Newtech Ltd latest results good or bad?

Creative Newtech Ltd's latest financial results for the quarter ending December 2025 showcase significant operational growth, with net sales reaching ₹914 crores, reflecting a year-on-year increase of 38.68%. This growth is notable compared to the previous year’s performance, indicating strong demand in the peripherals distribution segment. The company also reported a consolidated net profit of ₹23.37 crores, which represents a year-on-year increase of 36.91%, although this growth rate is lower than the previous year's 47.79%. Despite the strong revenue and profit figures, the company's profitability metrics suggest some underlying challenges. The operating profit margin, excluding other income, was reported at 2.91%, which, while improved from 1.85% in the same quarter last year, shows a decline from 3.49% in the preceding quarter. This sequential margin compression raises concerns about competitive pressures and operational costs that need to be monitored closely. Additionally, the company's return on equity stands at 20.64%, indicating effective capital deployment, although the interest costs have risen significantly, reflecting higher working capital requirements. The company's balance sheet shows a lean capital structure, with a reduction in long-term debt, which is a positive sign of financial management. Overall, Creative Newtech's results demonstrate a robust top-line growth trajectory, yet the margin pressures and rising costs highlight the need for careful operational management moving forward. The company has seen an adjustment in its evaluation, reflecting the mixed signals from its financial performance.