Are Abhinav Capital latest results good or bad?

Abhinav Capital's latest financial results for Q2 FY26 present a complex picture. The company reported net sales of ₹1.07 crores, reflecting a sequential growth of 9.18% from the previous quarter, yet this figure represents a significant decline of over 61% compared to ₹2.79 crores in the same quarter last year. This substantial year-on-year revenue erosion raises concerns about the company's operational viability and competitive positioning in the NBFC sector.
On the profitability front, Abhinav Capital demonstrated a notable increase in net profit, which surged 58.33% quarter-on-quarter to ₹0.76 crores. This improvement was accompanied by a substantial rise in the PAT margin to 71.03%, indicating effective cost management. However, the sustainability of such margins is questionable, particularly in light of the declining revenue base.

The company's return on equity (ROE) for the latest quarter stands at a mere 2.03%, which is significantly lower than its historical average, highlighting challenges in capital efficiency. Moreover, the elimination of interest costs, which fell to zero, suggests a potential shift in the company's lending strategy or a contraction in its lending operations, raising further questions about its future growth prospects.

Overall, while Abhinav Capital has shown some sequential improvements in profitability metrics, the underlying operational challenges, particularly the dramatic revenue decline and weak ROE, indicate a precarious situation. The company has experienced an adjustment in its evaluation, reflecting the market's response to these mixed financial indicators and ongoing concerns about its business model.