Are Saptarishi Agro Industries Ltd latest results good or bad?

Saptarishi Agro Industries Ltd has demonstrated a significant turnaround in its financial performance, transitioning from a history of losses to profitability. For the first half of FY26, the company reported a net profit of ₹1.85 crores, reflecting a substantial year-on-year growth of 424.56%. Revenue for the same period reached ₹40.45 crores, marking an 81.39% increase compared to the previous year. This follows a strong fiscal year 2025, where the company achieved revenues of ₹79.00 crores, up 92.70% year-on-year, and a net profit of ₹2.00 crores, contrasting sharply with the break-even results of prior years. Despite these positive indicators, there are operational challenges that raise concerns about sustainability. The operating profit before depreciation, interest, and tax (PBDIT) turned negative in Q2 FY26, recording the lowest level on record at ₹-0.58 crores. This volatility in quarterly performance suggests that while the company has returned to profitability, maintaining this momentum may be difficult. The balance sheet reflects a dramatic increase in current liabilities, which surged from ₹11.73 crores in FY24 to ₹52.22 crores in FY25, primarily due to a significant rise in trade payables. This 572% increase raises questions about the company's working capital management and its ability to finance growth sustainably. Return on equity (ROE) stands at a strong 38.71%, indicating effective capital utilization, although this figure is influenced by the company's leveraged capital structure. The return on capital employed (ROCE) is at 7.25%, below the five-year average, suggesting a decline in the company's ability to generate returns from its total capital base. The company has seen an adjustment in its evaluation, reflecting the mixed nature of its recent performance. While long-term returns have been impressive, recent quarterly results and operational pressures indicate a need for careful monitoring of future performance. Overall, Saptarishi Agro Industries Ltd's financial results present a complex picture of recovery intertwined with significant risks that warrant attention.