Are Disa India latest results good or bad?

Disa India's latest financial results for the quarter ended September 2025 reveal a complex operational landscape. The company reported a net sales figure of ₹103.70 crores, reflecting a sequential growth of 1.70% from the previous quarter, which contrasts with a decline of 5.87% in the prior quarter. Year-on-year, this represents a notable increase of 19.55% compared to ₹86.74 crores in the same quarter last year. However, the net profit for the same period was ₹12.20 crores, which indicates a decline of 6.44% from the previous quarter and a slight decrease of 2.32% year-on-year.
The operating margin, excluding other income, contracted to 13.92%, down from 14.62% in the previous quarter and significantly lower than the 18.04% achieved in the same quarter last year. This margin compression suggests that the company is facing challenges related to rising operational costs and pricing pressures within the industrial manufacturing sector. The net profit margin also saw a contraction, falling to 11.76% from 12.79% in the previous quarter.

Despite the revenue growth, the results highlight concerns regarding profitability, as the company struggles to convert top-line growth into bottom-line expansion. The decline in operating cash flow to ₹31.00 crores in FY25 from ₹55.00 crores in FY24 further underscores potential operational challenges. Additionally, the deterioration in the debtors turnover ratio to 0.77 times indicates slower receivables collection, which may pose risks to working capital management.

Overall, while Disa India has demonstrated revenue growth, the persistent margin compression and declining profitability metrics raise questions about the sustainability of its operational performance. The company saw an adjustment in its evaluation, reflecting these underlying trends and challenges. Investors should closely monitor future performance to assess whether these issues are cyclical or indicative of deeper structural headwinds.