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

Veritas (India) Ltd's latest financial results for Q2 FY26 reveal a significant disparity between revenue growth and profitability. The company reported a net profit of ₹0.60 crores, which reflects a substantial decline of 97.52% compared to the previous quarter and a 98.36% drop year-on-year. This sharp reduction in net profit occurred despite a notable revenue increase of 71.55%, bringing total revenue to ₹1,006.40 crores, marking the second-highest quarterly revenue on record for the company. However, the operational margins have faced severe compression. The operating margin fell to 1.55%, down from 6.11% in the previous quarter, indicating a critical deterioration in profitability. Similarly, the profit after tax (PAT) margin plummeted to 0.06%, suggesting that the company is generating minimal profit relative to its sales, which raises concerns about its long-term viability in a competitive market. The financial performance highlights a troubling trend where the company is experiencing significant operational stress, as reflected in its return on capital employed (ROCE) of just 2.72% and return on equity (ROE) of 1.95%, both at multi-year lows. The balance sheet remains strong, with no long-term debt and adequate shareholder funds, but the rising current liabilities indicate potential working capital pressures. Overall, Veritas (India) Ltd's results indicate a challenging operational environment, with an alarming disconnect between revenue growth and profitability. The company has seen an adjustment in its evaluation, reflecting these operational challenges and the need for a strategic focus on restoring margins and profitability.