Are Shreyas Intermediates Ltd latest results good or bad?

Shreyas Intermediates Ltd's latest financial results for Q2 FY26 indicate a company attempting to recover from a previous operational shutdown. The reported net sales of ₹10.37 crores represent a significant sequential growth of 64.08% from the prior quarter, reflecting a resumption of revenue generation after a complete absence in FY25. However, despite this revenue growth, the company continues to report a net loss of ₹0.24 crores, which is an improvement from the previous quarter's loss, indicating a 29.41% reduction in losses. The operating profit, excluding other income, was marginally positive at ₹0.07 crores, leading to an operating margin of 0.68%. This suggests that while the company has resumed operations, its profitability remains a challenge, as the operating profit is insufficient to cover depreciation costs. The persistent net losses and a negative return on equity averaging 0.0% raise concerns about the company's long-term viability and competitive positioning within the commodity chemicals sector. Additionally, the company’s accumulated losses have resulted in a negative reserve position, which has been deteriorating over the years. The balance sheet reflects shareholder funds of ₹16.39 crores, with a debt-to-equity ratio of 0.47, indicating a moderate level of financial leverage. However, the low promoter holding of 10.03% and the fact that all shares are pledged raise concerns about promoter commitment and financial stability. Overall, while Shreyas Intermediates has shown some operational recovery in Q2 FY26, the underlying financial metrics suggest significant challenges remain. The company has experienced an adjustment in its evaluation, reflecting the ongoing concerns about its ability to achieve sustainable profitability and maintain investor confidence.