Are Mukka Proteins Ltd latest results good or bad?

Mukka Proteins Ltd's latest financial results for Q2 FY26 reveal a notable increase in both net sales and consolidated net profit compared to the previous quarter and the same quarter last year. Specifically, net sales reached ₹244.58 crores, reflecting a quarter-on-quarter growth of 43.22% and a year-on-year increase of 63.93%. Similarly, the consolidated net profit stood at ₹5.88 crores, marking a significant quarter-on-quarter growth of 286.84% and a year-on-year rise of 182.69%. However, despite these headline figures, the company's operational performance presents challenges. The operating margin, excluding other income, was reported at 8.78%, which is slightly lower than the previous quarter's 8.82% but improved from 7.84% year-on-year. The profit after tax (PAT) margin of 2.91% shows improvement from 0.96% in the prior quarter but remains well below the 9.05% achieved in Q4 FY25, indicating volatility in profitability. The financial results also highlight pressures from elevated interest costs, which reached a record ₹12.82 crores in Q2 FY26, consuming a significant portion of operating profits. This interest expense represents a 16.12% increase from the previous quarter and a 47.02% rise year-on-year. Additionally, the company has shown a concerning dependence on non-operating income, which constituted a substantial portion of profit before tax, raising questions about the sustainability of its earnings. Furthermore, Mukka Proteins' return on equity (ROE) of 10.47% remains below the industry average, reflecting inefficiencies in capital utilization. The company's balance sheet indicates rising leverage, with a debt-to-EBITDA ratio of 4.50 times, suggesting high financial risk. Overall, while Mukka Proteins Ltd reported strong revenue growth, the underlying operational challenges, including high interest costs and inconsistent profitability, warrant careful consideration. The company saw an adjustment in its evaluation, reflecting these mixed financial trends.