Are Peria Kara. Tea latest results good or bad?

Peria Karamalai Tea's latest financial results for Q2 FY26 reveal significant operational challenges, marked by a net loss of ₹5.12 crores, a stark contrast to the profit of ₹1.96 crores reported in the previous quarter. This represents a sharp decline in profitability, with the operating margin collapsing to negative 34.53%, the lowest recorded for the company. The net sales for the quarter were ₹10.57 crores, which is a 4.78% decrease from the previous quarter and 24.00% below the average of the last four quarters.
The company's performance highlights severe operational stress, particularly in its core tea business, as evidenced by a loss of ₹3.65 crores in operating profit before depreciation, interest, and tax (PBDIT), compared to a profit of ₹4.06 crores in Q1 FY26. Elevated employee costs, which accounted for 67.17% of net sales, further exacerbated the financial strain, indicating challenges in cost management amidst declining revenues.

On a half-yearly basis, while the company reported a consolidated net profit of ₹2.73 crores for H1 FY26, this was largely due to the strong performance in Q1 FY26, which has now been overshadowed by the poor results in Q2. The overall operational metrics suggest a troubling trend, raising concerns about the sustainability of the business model in the face of ongoing industry headwinds.

Additionally, the company experienced an adjustment in its evaluation, reflecting the deteriorating financial trends and operational performance. The absence of institutional interest and the high volatility of the stock further complicate the investment landscape for Peria Karamalai Tea, making it a high-risk proposition for investors.