Are Primo Chemicals Ltd latest results good or bad?

Primo Chemicals Ltd's latest financial results for Q3 FY26 reveal significant challenges in maintaining profitability amidst a difficult operational environment. The company reported consolidated net sales of ₹140.14 crores, reflecting a quarter-on-quarter growth of 4.01% from ₹134.74 crores in the previous quarter, although this represents a year-on-year decline of 2.58% from ₹143.85 crores in Q3 FY25. This mixed revenue performance highlights the ongoing difficulties in the caustic soda industry, characterized by volatile demand. However, the profitability metrics indicate a concerning trend. The consolidated net profit for the quarter fell sharply to ₹1.05 crores, a decline of 74.76% from the previous quarter and 54.15% year-on-year. The operating margin, excluding other income, contracted to 9.69%, down from 11.35% in Q2 FY26, marking a significant compression that underscores the pressures on the company's core business profitability. Additionally, the company's profit before tax was adversely affected by elevated interest costs and depreciation charges, leading to a negative operating profit before other income of ₹-4.01 crores. The reliance on other income, which constituted an extraordinary 1,078.05% of profit before tax, raises fundamental concerns about the sustainability of the company’s financial health, as it suggests that the core operations are currently unprofitable. On a nine-month basis for FY26, the company reported a consolidated net profit of ₹9.29 crores, which is an improvement compared to ₹3.96 crores in the same period of FY25. However, this positive performance is overshadowed by the sharp deterioration in the latest quarter, raising questions about the sustainability of such profitability. Overall, the financial results reflect a company grappling with severe operational challenges, leading to an adjustment in its evaluation. The persistent dependence on non-operating income and the decline in key profitability metrics suggest that Primo Chemicals Ltd is facing a critical juncture in its operational viability.