Are Sanghi Industrie latest results good or bad?

Sanghi Industries has reported its financial results for the quarter ending March 2025, showcasing a notable increase in net sales, which reached Rs 335.25 crore, reflecting a growth of 46.0% compared to the average net sales of Rs 229.58 crore from the previous four quarters. This marks the highest quarterly sales in the last five quarters, indicating a positive trend in sales performance.
However, the profitability metrics present a contrasting picture. The profit before tax (PBT), adjusted for other income, fell to Rs -127.65 crore, which is a significant decline compared to the average PBT of Rs -64.09 crore from prior quarters. Similarly, the profit after tax (PAT) decreased to Rs -116.91 crore, down from an average of Rs -66.39 crore in previous quarters. Additionally, interest expenses reached their highest level in five quarters at Rs 66.48 crore, indicating rising borrowing costs.

The quarterly results also show a quarter-on-quarter growth in net sales of 29.46%, although this is a reduction from the previous quarter's growth of 70.93%. The standalone net profit showed a decline of 20.58% compared to the prior quarter, which had a growth of 50.45%. The operating profit margin, excluding other income, slightly decreased to 10.86%, down from 11.70% in the previous quarter.

Overall, while Sanghi Industries has demonstrated strong sales growth, the significant challenges in profitability and rising interest expenses suggest that the company is facing considerable financial strain. Additionally, the company saw an adjustment in its evaluation based on these results.