Are Yogi Ltd latest results good or bad?

Yogi Ltd's latest financial results for Q2 FY26 reflect significant operational growth, with net sales reaching ₹134.59 crores, representing a quarter-on-quarter increase of 49.06% from ₹90.29 crores in Q1 FY26. This growth trajectory is notable, especially considering the company's previous revenue levels, which were minimal prior to FY25. The net profit for the quarter also showed a sequential increase, climbing to ₹9.29 crores from ₹6.32 crores, marking a 46.99% improvement.
However, while the company demonstrated strong revenue and profit growth, the PAT margin experienced a slight contraction to 6.90% from 7.00% in the previous quarter, indicating that the rapid revenue expansion may be impacting profitability efficiency. Operating profit, excluding other income, rose to ₹12.73 crores, up 65.54% from the prior quarter, with the operating margin improving to 9.46% from 8.52%. This suggests that Yogi Ltd is achieving better operational leverage, although the absolute margin remains modest for its sector.

The financial performance is contrasted by concerns regarding the company's balance sheet. Current liabilities surged dramatically, raising questions about working capital management and sustainability. Additionally, the company reported negative operating cash flow of ₹72 crores for FY25, despite showing profitability, which highlights potential issues with cash generation.

In terms of market perception, Yogi Ltd's stock has seen substantial appreciation over the past year, but this has led to elevated valuation multiples that may not be sustainable. The company has experienced an adjustment in its evaluation, reflecting the complexities of its financial position amidst strong operational results.

Overall, Yogi Ltd's latest results indicate a company in transition, showcasing impressive growth metrics but also revealing underlying risks that warrant careful consideration.