Are Nexus Surgical and Medicare Ltd latest results good or bad?

Nexus Surgical's latest financial results for Q2 FY26 present a complex picture. The company reported a net profit of ₹0.17 crores, reflecting a sequential increase of 13.33% from the previous quarter, while revenue for the same period was ₹1.17 crores, which marked a significant decline of 32.37% compared to Q1 FY26. Year-over-year, however, revenue showed an improvement of 18.18% from ₹0.99 crores in Q2 FY25. Operating margins have expanded notably, reaching 20.51%, up from 12.14% in the prior quarter, indicating enhanced efficiency in operations. The profit after tax (PAT) margin also improved to 14.53%, up from 8.67% in Q1 FY26. This margin expansion, despite the revenue contraction, raises questions about the sustainability of the company's business model, especially given its low promoter holding of 18.73% and lack of institutional backing. The financial performance indicates a volatility in revenue, with past quarters showing significant fluctuations, suggesting potential instability in the company's order book. The balance sheet reveals a fragile equity base, with shareholder funds of just ₹1.06 crores and accumulated losses of ₹4.41 crores, which could pose risks to the company’s operational sustainability. Overall, while Nexus Surgical has demonstrated some operational improvements in terms of margins, the underlying revenue volatility and balance sheet weaknesses present significant challenges. The company saw an adjustment in its evaluation, reflecting these mixed operational trends.