Are 63 Moons Tech. latest results good or bad?

The latest financial results for 63 Moons Technologies reveal a complex picture characterized by significant operational challenges despite some revenue growth. In the quarter ending June 2025, the company reported net sales of ₹30.45 crores, reflecting a substantial year-on-year growth of 162.05%. However, this was accompanied by a net profit of ₹3.08 crores, which represents a notable decline of 72.00% quarter-on-quarter.
The operational metrics indicate persistent difficulties, as the operating profit (excluding other income) was deeply negative at -₹54.89 crores, resulting in an alarming operating margin of -180.98%. This trend underscores a structural profitability crisis, with employee costs surpassing total revenues, highlighting severe operational inefficiencies that have persisted over several quarters.

Moreover, the company's reliance on other income, which contributed ₹64.17 crores in the latest quarter, raises concerns regarding the sustainability of its core business operations. The dependency on non-operating income to offset significant operating losses suggests that the underlying software consulting business is struggling with fundamental viability issues.

In terms of return on equity, the average ROE of 1.46% falls well below industry standards, indicating capital inefficiency and value destruction for shareholders. The company has also shown extreme volatility in revenues, with net sales fluctuating dramatically across recent quarters, suggesting client concentration risks and inconsistent project execution.

Overall, while 63 Moons Technologies has demonstrated some revenue recovery, the underlying operational distress, negative cash flows, and reliance on other income highlight critical challenges that need to be addressed. Additionally, the company experienced an adjustment in its evaluation, reflecting the market's response to these ongoing issues.