Are Supreme Petrochem Ltd latest results good or bad?

Supreme Petrochem Ltd's latest financial results for Q2 FY2026 indicate a significant sequential decline across multiple key metrics. The company reported net sales of ₹1,117.76 crores, which reflects a contraction of 20.27% compared to the previous quarter. This marks the lowest quarterly sales figure in recent periods, raising concerns about demand and operational performance.
Net profit also saw a notable decline, falling to ₹48.29 crores, a decrease of 40.98% quarter-on-quarter. This represents the steepest quarterly profit drop in the company's recent history. The operating margin decreased to 7.08%, down 125 basis points from the previous quarter, while the PAT margin contracted to 4.36%, a decline of 151 basis points. These changes suggest that the company is facing operational headwinds, likely influenced by raw material price volatility and competitive pressures.

Despite these challenges, Supreme Petrochem maintains a strong balance sheet, characterized by a negative net debt-to-equity ratio, indicating a net cash position. The company continues to exhibit healthy return metrics, although there has been a decline in return on equity (ROE) from its historical averages.

In light of these results, the company saw an adjustment in its evaluation, reflecting the current operational challenges while still retaining strong long-term fundamentals. The recent performance highlights the need for close monitoring of the company's ability to recover and stabilize margins in the upcoming quarters.