Are Refex Industries Ltd latest results good or bad?

Refex Industries Ltd's latest financial results reflect a complex operational landscape. In the September 2025 quarter, the company reported consolidated net profit of ₹37.44 crores, which represents a significant sequential growth of 76.85% compared to the previous quarter. Year-on-year, this profit reflects a 20.54% increase, indicating a positive trend in profitability. However, net sales for the same quarter amounted to ₹426.85 crores, showing a sequential increase of 16.62%, yet a slight decline of 0.27% when compared to the same quarter last year.
The company's operating margin improved to 16.51%, up from 10.16% in the previous quarter, indicating enhanced operational efficiency. The profit after tax (PAT) margin also strengthened to 10.61%, suggesting that the profit growth was supported by margin expansion rather than solely by revenue growth.

Despite these positive indicators, the quarterly results also reveal significant volatility in revenue, with net sales fluctuating dramatically across quarters. The latest figures are notably below the ₹626.52 crores achieved in Q4 FY25 and the peak of ₹717.13 crores in Q3 FY24. This volatility raises concerns regarding the predictability and sustainability of the company's revenue streams, particularly in the refrigerant gas sector, which is subject to cyclical demand.

Moreover, the company has experienced a decline in its evaluation, reflecting a shift in market perception regarding its financial health and operational stability. The effective tax rate has also seen considerable fluctuations, which may indicate complexities in the company's tax structure.

On the balance sheet front, Refex Industries maintains a strong position with a net cash balance, minimal long-term debt, and a debt-to-equity ratio of just 0.08. However, the increase in working capital has led to negative cash flow from operations, which is a point of concern for future cash generation.

In summary, while Refex Industries Ltd has demonstrated strong profit growth and improved margins in its latest results, the underlying volatility in revenue and operational challenges suggest a cautious outlook. The company's recent adjustment in its evaluation underscores the need for sustained performance improvements to regain market confidence.