Are Lexus Granito (India) Ltd latest results good or bad?

Lexus Granito (India) Ltd's latest financial results for Q2 FY26 present a mixed picture. The company reported a net profit of ₹0.37 crores, which reflects a significant year-on-year growth of 119.79% compared to the same quarter last year. This improvement in profitability comes alongside a notable revenue increase, with net sales reaching ₹22.10 crores, marking a 27.23% growth year-on-year. This suggests a recovery in demand within the vitrified tiles segment, as evidenced by a sequential revenue growth of 22.51% from the previous quarter. However, despite the positive revenue trajectory, the company's operating margin has contracted to 11.86% from 17.35% in the prior quarter, indicating challenges in maintaining operational efficiency. This decline in margins raises concerns about the company's ability to manage costs effectively, especially given the persistent burden of interest and depreciation expenses. Additionally, the company's debt-to-equity ratio stands at a critically high 14.90 times, highlighting significant leverage that poses risks to financial stability. The high debt levels, coupled with negative return ratios—such as a return on equity (ROE) of -14.91%—underscore ongoing operational inefficiencies and capital destruction. Overall, while Lexus Granito has shown some signs of revenue recovery and profitability improvement, the underlying operational challenges and high debt levels present substantial risks. The company has experienced an adjustment in its evaluation, reflecting these mixed operational trends and financial metrics.