Are T T Ltd latest results good or bad?

T T Limited's latest financial results for Q2 FY26 indicate a challenging operational environment characterized by significant declines in both net sales and net profit. The company reported net sales of ₹45.67 crores, reflecting a quarter-on-quarter contraction of 5.19% and a year-on-year decrease of 15.91%. This trend of declining sales is concerning, especially as it follows a previous quarter where sales also fell sharply. Net profit for the quarter was recorded at ₹0.18 crores, which represents a substantial decline of 58.14% compared to the prior quarter and a 63.27% drop year-on-year. This sharp reduction in profitability raises questions about the sustainability of the company's earnings, particularly given that a significant portion of the profit was derived from other income, which accounted for more than eight times the net profit figure. The operating margin, excluding other income, decreased to 4.18%, down from 5.85% in the previous quarter, indicating a compression in operational efficiency. This margin contraction, combined with the revenue decline, suggests thaT T T Limited is facing pressures from rising input costs and possibly pricing challenges in a competitive market. Additionally, the company's return on equity (ROE) has shown a concerning trend, with the latest figure indicating a negative return, which suggests a deterioration in capital efficiency. The reliance on other income for profitability, coupled with high interest costs, further complicates the financial outlook. Overall, T T Limited's financial performance in the latest quarter reflects a company grappling with significant operational challenges, leading to an adjustment in its evaluation. The ongoing decline in sales and margins, along with the reliance on non-operating income, points to potential structural issues within the business model that require close monitoring.