Are Sigachi Industries Ltd latest results good or bad?

The latest financial results for Sigachi Industries Ltd indicate significant operational challenges. In Q2 FY26, the company reported a net profit of ₹10.69 crores, which reflects a year-on-year decline of 50.92%. Revenue for the same period was ₹110.48 crores, marking an 11.55% decrease compared to the previous year and a 13.86% decline from the prior quarter. This sequential revenue contraction raises concerns about demand and market positioning in the pharmaceutical excipients sector. Operating margins have also come under pressure, collapsing to 6.82%, the lowest level in at least eight quarters, down from 18.79% in Q1 FY26. This sharp decline in operating profitability is further evidenced by a significant drop in operating profit before depreciation, interest, tax, and other income (PBDIT), which fell to ₹7.53 crores, down 68.76% quarter-on-quarter. The company's return on equity (ROE) for the half-year period stands at 4.37%, a multi-year low, suggesting a severe erosion in capital efficiency. Additionally, the debt-to-equity ratio surged to 2.86 times, indicating heightened financial risk. The reliance on other income, which constituted a substantial portion of profit before tax, raises questions about the sustainability of the company's core operations. In light of these results, Sigachi Industries Ltd has experienced an adjustment in its evaluation, reflecting the deteriorating financial and operational metrics. The company faces a critical juncture where management will need to demonstrate effective turnaround strategies to address these challenges and restore investor confidence.