Are Last Mile Enterprises Ltd latest results good or bad?

Last Mile Enterprises Ltd has reported its financial results for Q2 FY26, revealing a significant disparity between its revenue growth and profitability metrics. The company achieved net sales of ₹785.64 crores, reflecting an extraordinary year-on-year growth of 2,378.36%. This impressive revenue surge is notable, especially when compared to the previous year's performance. However, the net profit for the same quarter declined sharply to ₹2.48 crores, representing a 74.03% decrease from the prior year. The company's profitability challenges are further highlighted by a drastic compression in its PAT margin, which fell to 0.39% from 30.13% in the corresponding quarter last year. This indicates difficulties in translating top-line growth into sustainable bottom-line performance. Additionally, the operating profit margin, excluding other income, stood at a mere 0.42%, down from 24.51% year-on-year, showcasing severe pressure on core business profitability. Despite the substantial revenue growth, the financial results raise critical concerns regarding the quality of earnings, as over 51% of profit before tax was derived from non-operating income. The return on equity (ROE) of 4.28% is also below average, indicating inefficiencies in capital utilization. The company has experienced a notable adjustment in its evaluation, reflecting the market's response to these operational challenges. The stock has underperformed significantly, trading well below its 52-week high, and has delivered negative returns across various timeframes. In summary, while Last Mile Enterprises Ltd has demonstrated remarkable revenue growth, the accompanying decline in profitability, coupled with concerns over earnings quality and operational sustainability, presents a complex financial picture. The company faces significant challenges that will need to be addressed to restore investor confidence and improve its financial standing.