Are Huhtamaki India latest results good or bad?

Huhtamaki India's latest financial results for Q2 FY26 present a complex picture of operational performance. The company reported a net profit of ₹36.77 crores, reflecting a significant sequential increase of 47.47% from the previous quarter. This improvement in profitability is underscored by a notable expansion in operating margins, which reached 9.17%, the highest in at least twelve quarters, driven by effective cost management and an improved product mix.
However, the revenue figures tell a different story. The company's net sales for Q2 FY26 amounted to ₹604.93 crores, which represents a modest sequential growth of 2.19% from the previous quarter but a decline of 4.69% compared to the same quarter last year. This marks the third consecutive quarter of year-on-year revenue contraction, indicating ongoing demand challenges in Huhtamaki's core packaging markets.

The operational efficiency improvements are evident as the operating profit before depreciation, interest, and tax surged to ₹55.48 crores, showcasing a robust year-on-year growth of 206.86%. Despite these positive profitability metrics, the persistent revenue decline raises concerns about the sustainability of the company's recent gains.

Additionally, the company's return on equity (ROE) of 5.92% remains below its historical average, highlighting challenges in capital efficiency. The balance sheet reflects a comfortable net cash position, but the quality assessment has been revised, indicating concerns about the sustainability of operational performance amid the current market environment.

Overall, while Huhtamaki India has demonstrated significant improvements in profitability and operational efficiency, the ongoing revenue challenges and adjustments in evaluation suggest a need for careful monitoring of future performance to assess the potential for recovery and growth.