Are SC Agrotech Ltd latest results good or bad?

SC Agrotech Ltd's latest financial results for Q2 FY26 indicate a significant operational shift as the company attempts to revive its business after a prolonged period of inactivity. The reported net profit of ₹0.21 crores and revenue of ₹5.02 crores represent a notable sequential increase from the previous quarter, suggesting a restart of operations rather than organic growth. The operating margin improved to 5.78%, up from 1.40% in Q1 FY26, although this margin remains low for an FMCG company, indicating ongoing challenges in achieving operational scale. Despite the positive sequential growth, the company's historical performance raises concerns about sustainability. The revenue generation in Q2 FY26 follows multiple quarters of zero sales, highlighting the volatility of its operations. The return on equity (ROE) stands at 43.17%, but this figure is influenced by a small equity base due to accumulated losses, which distorts the perception of financial health. The company's balance sheet shows zero long-term debt, yet the complete exit of promoters and the absence of institutional investors signal a lack of confidence in the company's future prospects. This situation is compounded by a negative return on capital employed (ROCE) of -91.94%, indicating that the company is currently destroying shareholder value. Overall, while SC Agrotech has demonstrated a capacity to generate revenue in the latest quarter, the operational challenges, historical inconsistencies, and recent changes in shareholding raise fundamental questions about the viability of its business model. The company has seen an adjustment in its evaluation, reflecting the complexities of its financial situation and operational landscape.