Are Sangal Papers Ltd latest results good or bad?

Sangal Papers Ltd's latest financial results for Q2 FY26 indicate significant operational challenges. The company reported net sales of ₹48.35 crores, reflecting a year-on-year decline of 5.55% compared to ₹51.19 crores in Q2 FY25, despite a slight sequential increase of 1.64% from the previous quarter. This revenue contraction is coupled with a substantial drop in net profit, which fell to ₹0.30 crores, an 81% decrease year-on-year, highlighting severe profitability pressures. The operating margin, which stood at 2.38%, represents a considerable decline of 413 basis points from the previous year's margin of 6.51%. This low margin suggests that the company is facing significant pricing pressures or rising input costs. Furthermore, the return on equity (ROE) has been reported at 6.00%, which is considered below average, indicating that the company is generating insufficient returns relative to the capital invested. In terms of operational performance, the latest quarter shows a modest improvement in net profit to ₹0.35 crores for the quarter ended December 2025, reflecting a 16.67% increase from the previous quarter's ₹0.30 crores. However, net sales for the same period experienced a decline of 3.41% compared to the previous quarter, underscoring ongoing challenges in maintaining revenue levels. Overall, Sangal Papers Ltd's financial results reveal a company grappling with significant operational difficulties, as evidenced by declining sales and profitability metrics. The company has seen an adjustment in its evaluation, reflecting these ongoing challenges and the need for operational improvements to stabilize its financial performance.