Are Thacker & Company Ltd latest results good or bad?

Thacker & Company Ltd's latest financial results present a mixed picture. The standalone performance showed notable resilience, with net sales for Q2 FY26 reaching ₹2.12 crores, reflecting a significant quarter-on-quarter growth of 76.67% from ₹1.20 crores and a year-on-year increase of 3.41% from ₹2.05 crores. Standalone net profit also demonstrated strong performance, climbing to ₹1.29 crores, which is a sequential improvement of 118.64% from ₹0.59 crores and a year-on-year rise of 5.74% from ₹1.22 crores. The operating profit margin (excluding other income) was exceptionally high at 361.11%, indicating strong profitability metrics, although this is based on a relatively low revenue base. However, the consolidated results reveal a different narrative, with consolidated net profit declining to ₹4.54 crores, marking a quarter-on-quarter decrease of 28.28% and a year-on-year drop of 26.77%. This divergence between standalone and consolidated results raises concerns about the performance of subsidiaries and the overall business model. The company operates one wholly owned subsidiary, and the lack of clarity regarding its performance adds to the uncertainty. The financial data also highlights a concerning trend in cash flow, with persistent negative operating cash flows recorded over the past few years, suggesting that reported profits are not translating into cash generation. Additionally, the company’s capital efficiency metrics, such as a return on capital employed (ROCE) of 2.66%, indicate that capital is not being utilized effectively to generate returns. Overall, while Thacker & Company Ltd exhibits strong standalone profitability and a solid balance sheet with no debt, the operational inconsistencies, declining consolidated profits, and negative cash flow dynamics warrant careful monitoring. The company has seen an adjustment in its evaluation, reflecting these complexities in its financial performance.