Are SPML Infra Ltd latest results good or bad?

SPML Infra Ltd's latest financial results for Q2 FY26 present a mixed picture of operational performance. The company reported a net profit of ₹15.04 crores, reflecting a year-on-year growth of 15.16%, which indicates some resilience in profitability. However, this growth was significantly supported by non-operating income, which accounted for a substantial portion of the profit before tax, raising concerns about the sustainability of these earnings. Revenue for the quarter was ₹187.76 crores, showing a slight decline of 0.43% compared to the same quarter last year. This stagnation in revenue, coupled with a significant 37.81% drop in net sales for the first half of FY26 compared to the previous year, suggests challenges in project execution and order book management. The operating margin stood at 4.69%, which, while slightly improved from the previous quarter, remains considerably lower than the 6.80% achieved in Q2 FY25, highlighting ongoing cost pressures. The company's interest expenses have seen a dramatic reduction, which has positively impacted the profit margins. However, the average return on equity (ROE) and return on capital employed (ROCE) remain low, indicating inefficiencies in capital utilization. Additionally, the company's high debt levels, reflected in an elevated debt-to-EBITDA ratio, raise concerns about financial sustainability. Overall, SPML Infra is navigating a complex operational landscape characterized by declining revenues, reliance on non-operating income for profit growth, and significant debt levels. The company has experienced an adjustment in its evaluation, reflecting the ongoing challenges and the need for strategic focus on improving operational efficiency and revenue generation.