Are Lakshmi Mills Company Ltd latest results good or bad?

Lakshmi Mills Company Ltd's latest financial results for the quarter ended December 2025 present a mixed picture of operational performance. The company reported net sales of ₹61.90 crores, reflecting an 11.65% increase year-on-year and a sequential growth of 5.58% from the previous quarter. This growth indicates some resilience in revenue generation despite a challenging operating environment. However, the net profit for the same quarter was ₹2.04 crores, which represents a 19.05% decline compared to the previous quarter's profit of ₹2.52 crores. This decline raises concerns about the company's ability to convert revenue growth into sustainable profitability, especially given that net profit margins have compressed to 3.30% from 4.30% in the prior quarter. The operating margin, on the other hand, reached a multi-quarter high of 13.44%, suggesting improved cost management and operational efficiency. The financial results also highlight significant challenges in capital efficiency, with the company's return on equity (ROE) at a low 0.93% and return on capital employed (ROCE) at just 0.48%. These metrics indicate that Lakshmi Mills is struggling to generate adequate returns on its capital, which is a critical concern for investors. In summary, while Lakshmi Mills has shown some positive trends in revenue and operating margins, the decline in net profit and the company's ongoing capital efficiency issues suggest that it faces significant challenges moving forward. Additionally, the company experienced an adjustment in its evaluation, reflecting the complexities of its operational performance and market conditions.