Are Eveready Inds. latest results good or bad?

Eveready Industries' latest financial results for Q2 FY26 present a complex picture of operational performance. The company reported net sales of ₹386.78 crores, marking a year-on-year growth of 6.67% compared to ₹362.61 crores in the same quarter last year. This indicates a strong top-line performance, reaching the highest quarterly revenue level in recent history. However, this revenue growth did not translate into profitability, as the company faced a net loss of ₹7.91 crores, a significant decline from the profit of ₹30.23 crores reported in the previous quarter and a stark contrast to the profit of ₹29.56 crores in the year-ago quarter.
The operating margin also experienced compression, falling to 12.69% from 14.35% in Q1 FY26, reflecting ongoing cost pressures that revenue growth has not been able to offset. The gross profit margin saw a dramatic decline to 1.75%, down from 11.59% in the previous quarter, highlighting severe pricing pressures or input cost inflation that the company has struggled to manage effectively.

Additionally, the extraordinary tax charge of ₹7.48 crores on a pre-tax loss raised concerns about the sustainability of the reported figures, indicating potential accounting anomalies that require clarification. The company’s return on capital employed (ROCE) has also deteriorated, dropping to 5.66% in H1 FY26 from 15.96% in FY25, suggesting that capital is being deployed less efficiently.

In terms of evaluation, Eveready Industries saw an adjustment in its evaluation, reflecting the challenges presented by the latest results. The overall financial performance indicates a troubling disconnect between revenue growth and profitability, raising questions about the company's operational efficiency and ability to navigate competitive pressures in the FMCG sector. Investors will need to monitor upcoming quarters closely for signs of recovery or further deterioration in performance metrics.