Are Modern Dairies Ltd latest results good or bad?

Modern Dairies Ltd's latest financial results for Q3 FY26 present a complex picture. The company reported a sequential revenue growth of 6.73%, with net sales reaching ₹87.48 crores, up from ₹81.96 crores in the previous quarter. However, this growth in revenue did not translate into profitability, as net profit fell to ₹1.22 crores, reflecting a significant decline of 27.81% compared to the prior quarter. The operating margin contracted to 2.73%, down from 3.33% in Q2 FY26, indicating increasing pressure on profitability. Similarly, the profit after tax (PAT) margin also saw a reduction, dropping to 1.39% from 2.06% in the previous quarter. These figures highlight ongoing challenges in maintaining operational efficiency amidst rising costs that have outpaced revenue growth. Year-on-year comparisons reveal further difficulties, as revenue declined by 1.44% from ₹88.76 crores in Q3 FY25, suggesting a struggle to sustain growth in a competitive market. The company's performance over the nine-month period of FY26 shows total revenue of ₹247.74 crores, which underscores the challenges faced throughout the fiscal year. The operational metrics indicate a company grappling with structural issues, as evidenced by a five-year sales growth rate of negative 14.08%. This trend raises concerns about the sustainability of its business model in the highly competitive FMCG dairy products segment. Furthermore, the company has experienced a revision in its evaluation, reflecting the underlying financial trends and operational challenges. Overall, while there are signs of revenue growth, the significant decline in profitability and ongoing margin pressures present a challenging outlook for Modern Dairies Ltd.