Are Rishi Techtex Ltd latest results good or bad?

Rishi Techtex Ltd's latest financial results reveal a complex picture of operational performance. In the quarter ended September 2025, the company reported a net profit of ₹0.91 crore, reflecting a 40% increase quarter-on-quarter and a 71.7% rise year-on-year. Revenue also showed significant growth, reaching ₹39.25 crore, which is a 29.62% increase compared to the previous quarter and a 26.25% increase year-on-year. However, this positive revenue trajectory did not translate into sustained profitability, as the operating margin contracted to 6.65%, down from 6.87% in the prior quarter and 7.01% a year ago. The subsequent quarter's results for December 2025 indicate a decline in both net sales and net profit, with net sales dropping by 11.46% and net profit decreasing by 49.45% compared to the previous quarter. This downturn raises concerns about the sustainability of the company's growth strategy, particularly in light of rising operational costs and margin pressures. The operating profit margin also saw a decrease, indicating challenges in maintaining profitability amidst fluctuating raw material costs. Rishi Techtex's operational challenges are compounded by a high effective tax rate of 34.78%, which has further constrained net profit expansion. Additionally, the company's return on capital employed (ROCE) and return on equity (ROE) remain below industry standards, suggesting inefficiencies in capital utilization. Overall, while Rishi Techtex Ltd demonstrated strong revenue growth in the earlier quarter, the subsequent results indicate significant operational hurdles that could impact future performance. The company has experienced an adjustment in its evaluation, reflecting the market's cautious stance regarding its ability to sustain profitability in the face of these challenges.