Are Venkys (India) Ltd latest results good or bad?

Venkys (India) Ltd has reported a notable recovery in its financial performance for the quarter ended Q3 FY26. The company achieved net sales of ₹960.15 crores, reflecting a sequential growth of 19.89% and an 8.91% increase year-on-year. This marks the highest quarterly revenue in recent periods, driven by improved realization and volume growth across its integrated poultry operations. The net profit for the quarter stood at ₹48.58 crores, a significant turnaround from a loss of ₹26.53 crores in the previous quarter, indicating a positive shift in profitability metrics. The operating margin improved to 7.28%, a recovery from the negative margin experienced in Q2 FY26, while the PAT margin also expanded to 5.06%. However, these margins remain below the levels achieved in the same quarter of the previous year, highlighting ongoing challenges in maintaining profitability within the competitive poultry industry. The cost structure showed stability, with employee costs remaining consistent despite revenue growth, suggesting improved operational leverage. Interest costs also declined slightly, reflecting prudent financial management. However, the company faces concerns regarding margin volatility, as operating margins have fluctuated significantly over recent quarters. Despite the strong quarterly performance, Venkys (India) faces structural challenges, including a weak return on equity of 9.58% and a declining return on capital employed, which was notably low at 3.38% for the latest half-yearly period. Additionally, the company has experienced persistent underperformance in the stock market, trailing both the Sensex and the broader FMCG sector over various timeframes. The overall evaluation of Venkys (India) has seen an adjustment, reflecting the complexities of its operational recovery amidst longer-term structural challenges. The company maintains a strong balance sheet with zero long-term debt, providing financial flexibility, but the lack of institutional interest and ongoing margin pressures raise questions about the sustainability of its recent performance.