Are Kothari Sugars & Chemicals Ltd latest results good or bad?

Kothari Sugars & Chemicals Ltd's latest financial results for Q2 FY26 reveal significant operational challenges. The company reported a net loss of ₹7.23 crores, a stark contrast to the profit of ₹1.25 crores in the previous quarter (Q1 FY26). This shift indicates a troubling decline in profitability. Revenue for the quarter was ₹68.04 crores, reflecting a marginal quarter-on-quarter growth of 2.02%, but a concerning year-on-year decrease of 33.02% compared to ₹101.59 crores in Q2 FY24. The operating margin fell sharply to -11.68%, marking the lowest performance in seven quarters, as the operating profit before depreciation, interest, and tax (excluding other income) turned negative at ₹-7.95 crores. This represents a significant decline from the operating profit of ₹10.63 crores recorded in the same quarter last year. The return on equity (ROE) also showed weakness, standing at just 2.48%, indicating challenges in generating adequate returns on shareholder capital. On a half-yearly basis, Kothari Sugars reported cumulative net sales of ₹134.73 crores for H1 FY26, with a net loss of ₹5.98 crores, contrasting unfavorably with the previous year's performance where the company had generated ₹191.21 crores in revenue and posted a net profit of ₹5.72 crores. The data suggests a sustained deterioration in the company's core business fundamentals, with operational losses deepening and capital efficiency declining. Overall, Kothari Sugars is facing critical operational pressures, and the company has seen an adjustment in its evaluation, reflecting these ongoing challenges. The outlook remains uncertain, with limited visible catalysts for recovery in the near term.