Are Krishival Foods Ltd latest results good or bad?

Krishival Foods Ltd's latest financial results for Q2 FY26 present a mixed picture. The company reported a consolidated net profit of ₹5.63 crores, reflecting a year-on-year growth of 68.06%, alongside a significant revenue increase of 128.32% compared to the same quarter last year, reaching net sales of ₹66.67 crores. This remarkable revenue growth indicates strong market traction and effective capacity expansion efforts in the cashew processing sector. However, the results also highlight challenges in profitability, as the operating margin contracted to 11.13% from 13.50% in the same quarter last year. This decline suggests rising input costs or operational inefficiencies that could impact future earnings. The PAT margin also decreased to 8.70% from 11.08%, further emphasizing the pressures on profitability despite the robust revenue growth. In terms of cash flow, Krishival Foods demonstrated a turnaround with positive operating cash flow of ₹46.00 crores in FY25, a significant improvement from the previous year. The company also maintained a low debt-to-equity ratio of 0.09, indicating financial flexibility for growth investments. However, the sharp increase in current liabilities raises concerns about working capital management. Overall, while Krishival Foods Ltd has shown impressive revenue growth and improved cash flow dynamics, the compression in margins and rising working capital requirements warrant close attention. The company has experienced an adjustment in its evaluation, reflecting the complexities of balancing rapid growth with sustainable profitability. Investors should monitor future performance closely, particularly regarding margin stabilization and operational efficiencies.