Are Vivid Global Industries Ltd latest results good or bad?

Vivid Global Industries Ltd's latest financial results reflect a complex operational landscape characterized by significant revenue growth juxtaposed with persistent profitability challenges. In Q2 FY26, the company reported net sales of ₹13.92 crores, marking a year-on-year increase of 97.73% and a quarter-on-quarter growth of 32.19%. However, the net profit for the same period was ₹0.17 crores, which, while showing a year-on-year increase of 41.67%, indicates that the profit margins remain under pressure, with a PAT margin of just 1.22%. The operational performance also highlights a mixed trend. The operating profit margin (excluding other income) improved to 4.24% from 2.18% in the previous quarter, yet this remains below historical levels. The company experienced a notable surge in interest expenses, which escalated to ₹0.32 crores from ₹0.04 crores in the prior quarter, significantly impacting profitability. This increase in finance charges raises concerns about the company's working capital management and its ability to sustain operational efficiency. On a half-yearly basis, Vivid Global reported combined net sales of ₹24.45 crores for H1 FY26, up from ₹20.23 crores in H1 FY25, indicating a year-on-year growth of 20.86%. However, the net profit for the same period was modest at ₹0.28 crores, reflecting a 64.71% increase compared to the previous year, which is not commensurate with the revenue growth, suggesting rising cost pressures and operational inefficiencies. The quarterly performance trend reveals volatility in both revenue and profitability metrics, with net sales fluctuating significantly over recent quarters. The company's return on equity (ROE) and return on capital employed (ROCE) are notably low, indicating challenges in generating adequate returns on capital. The absence of institutional investor participation further underscores concerns regarding the company's investment appeal. Overall, Vivid Global Industries Ltd's recent results illustrate a company grappling with structural challenges in a competitive landscape, where revenue growth has not translated into sustainable profitability. The company has seen an adjustment in its evaluation, reflecting the ongoing operational difficulties and financial pressures it faces.