Are West Coast Paper Mills Ltd latest results good or bad?

West Coast Paper Mills Ltd's latest financial results present a complex picture. The company reported a record quarterly revenue of ₹1,049.78 crores for the quarter ended December 2025, reflecting a year-on-year growth of 3.34% and a quarter-on-quarter increase of 0.65%. However, this revenue growth is overshadowed by significant declines in profitability metrics. The operating margin, excluding other income, fell to 7.31%, a notable drop from previous levels, indicating challenges in maintaining operational efficiency. The company's net profit for the quarter was ₹26.86 crores, which marks a substantial quarter-on-quarter improvement of 53.57%, yet this figure represents a dramatic decline of 58.16% compared to the same quarter last year. This sharp year-on-year decrease raises concerns about the sustainability of profit generation. Moreover, the company's dependency on other income has become increasingly pronounced, with 94.36% of profit before tax derived from non-operating sources. This reliance suggests that the core business is struggling to generate adequate profits, which is further evidenced by the operating profit before other income plummeting to just ₹2.67 crores. West Coast Paper Mills also faces operational challenges reflected in its return on capital employed (ROCE) and return on equity (ROE), both of which have significantly declined from historical averages. These metrics indicate deteriorating capital efficiency and suggest that the company is generating insufficient returns on its investments. In light of these results, West Coast Paper Mills has experienced an adjustment in its evaluation, reflecting the current operational difficulties and market perceptions. The financial data indicates that while revenue growth is present, the underlying profitability issues and operational challenges warrant careful consideration moving forward.