Are Aarvi Encon Ltd latest results good or bad?

Aarvi Encon Ltd's latest financial results for the quarter ended September 2025 reflect a notable operational performance characterized by significant revenue and profit growth. The company's net sales reached ₹158.85 crores, marking a year-on-year increase of 31.32%, which indicates sustained demand for its technical staffing services. This growth is complemented by a substantial net profit of ₹4.80 crores, representing a remarkable year-on-year growth of 127.49%. The operating profit before depreciation, interest, tax, and other income (PBDIT) also reached a record high of ₹5.59 crores, showcasing the company's ability to enhance profitability while managing costs effectively. The operating margin, excluding other income, improved to 3.52%, reflecting better operational efficiency and pricing power. Despite these positive trends, the company reported a negative operating cash flow of ₹2.00 crores for FY25, primarily due to working capital challenges associated with rapid revenue growth. This aspect highlights the importance of effective cash flow management as the company scales its operations. In terms of evaluation, Aarvi Encon experienced an adjustment in its evaluation, reflecting the mixed signals across various performance metrics. The company's promoter holding remains stable at 73.47%, indicating strong management commitment, although the absence of institutional participation may limit liquidity and research coverage. Overall, Aarvi Encon's recent results underscore its operational strengths and growth potential, while also presenting challenges that require careful monitoring as the company continues to navigate its expansion in the competitive staffing sector.