Are STL Global latest results good or bad?

STL Global's latest financial results indicate a complex operational landscape. In the quarter ended September 2025, the company reported a net profit of ₹0.28 crores, reflecting a significant year-on-year growth of 227.27%. This marks a notable recovery from the previous year, where the profit was effectively breakeven. The operating profit margin for the same period stood at 2.69%, which is the highest recorded margin in recent quarters, suggesting some improvement in operational efficiency.
However, despite these positive indicators, STL Global continues to face significant challenges. The average return on equity (ROE) remains low at 3.77%, which is below industry standards, indicating ongoing issues with capital efficiency. Additionally, the company's debt-to-EBITDA ratio of 11.45 times raises concerns about financial leverage and sustainability, as it suggests a high burden of debt relative to earnings.

The company has shown a revenue growth of 27.90% in FY25, reaching net sales of ₹110 crores, yet this growth has not translated into substantial profitability improvements. The operating margin for FY25 was only 0.90%, which, while an improvement from the previous year, remains significantly lower than historical performance levels.

Overall, STL Global's recent results reflect a mix of recovery signs alongside persistent structural weaknesses. The company has experienced an adjustment in its evaluation, highlighting the need for continued monitoring of its operational performance and financial health moving forward. The garment and apparel sector's competitive pressures and STL Global's high leverage will be critical factors influencing its future trajectory.