Are F A C T latest results good or bad?

The latest financial results for FACT (Fertilizers and Chemicals Travancore) for the quarter ended September 2025 indicate a notable recovery in net profit and revenue compared to the previous quarter. Specifically, the company reported a net profit of ₹20.86 crores, which reflects a significant increase of 387.38% quarter-on-quarter from ₹4.28 crores in June 2025. Additionally, net sales surged to ₹1,629.30 crores, marking a growth of 56.25% from ₹1,042.77 crores in the prior quarter.
Despite these headline figures, the operating margin remains a point of concern, with the operating margin (excluding other income) reported at just 2.42%, slightly up from 2.30% in the previous quarter. This stagnation in operational efficiency raises questions about the sustainability of profit levels, especially given the company's historical performance where margins were significantly higher.

The dependency on non-operating income is particularly alarming, as it constituted 241.85% of profit before tax in the latest quarter, indicating that the core operations are under pressure. Furthermore, the company's valuation metrics, including a price-to-earnings ratio of 716x and a price-to-book ratio of 42.34x, suggest that the stock is trading at a premium compared to industry averages, which may not be justified by its current operational performance.

Overall, while FACT has shown improvement in its quarterly results, the underlying challenges related to margin sustainability, reliance on non-operating income, and high valuation multiples warrant careful consideration. The company also experienced an adjustment in its evaluation, reflecting the complexities of its financial landscape.