Are Rishi Techtex Ltd latest results good or bad?

Rishi Techtex Ltd's latest financial results indicate a complex picture of operational performance. For the fiscal year ending March 2025, the company reported net sales of ₹125.00 crores, reflecting a year-on-year growth of 12.6%, marking the sixth consecutive year of revenue growth. However, despite this revenue growth, the profitability remains a concern, with a net profit of ₹2.00 crores, resulting in a profit after tax (PAT) margin of only 1.6%, which shows a slight improvement from the previous year's margin of 0.9%. In terms of operational efficiency, the return on equity (ROE) for FY25 was reported at 8.64%, which, while an improvement, still falls below industry standards. The company's return on capital employed (ROCE) stands at 10.02%, which also indicates challenges in capital efficiency. The financial data reveals that total expenditures accounted for 93.6% of revenues, highlighting persistent cost pressures. In the most recent quarterly results for September 2025, Rishi Techtex experienced a quarter-on-quarter growth in net sales of 29.62%, alongside a 40% increase in standalone net profit compared to the previous quarter. This suggests a potential turnaround in operational performance, although the overall profitability metrics remain thin. The company has seen an adjustment in its evaluation, reflecting the ongoing challenges in profitability and capital returns despite the positive revenue trends. The absence of institutional holdings and the company's micro-cap status further complicate its market positioning, indicating limited investor interest and liquidity issues. Overall, while Rishi Techtex Ltd demonstrates consistent revenue growth, the underlying profitability and capital efficiency metrics raise concerns that need to be addressed for sustainable operational success.