Are ANI Integrated Services Ltd latest results good or bad?

The latest financial results for ANI Integrated Services Ltd reveal a complex operational landscape characterized by contrasting trends in revenue and profitability. In the quarter ending December 2025, the company reported net sales of ₹64.87 crores, reflecting a year-on-year growth of 10.55%, which indicates a continued ability to generate revenue. However, this growth was accompanied by a significant decline in net profit, which fell to ₹1.87 crores, marking a year-on-year decrease of 26.67%. The operating margin also faced challenges, contracting to 4.33% from 6.15% in the same quarter last year, highlighting issues related to cost management, particularly in employee expenses, which constituted 82.3% of revenue. This increase in costs has contributed to a negative operating leverage scenario, where rising expenses outpace revenue growth. Additionally, interest costs surged by 66% year-on-year, further straining profitability. The company's return on equity (ROE) averaged 9.10%, indicating that it is struggling to generate adequate returns relative to the capital employed. The nine-month performance for FY2026 shows cumulative sales of ₹189.50 crores, up approximately 13% from the same period last year, but the decline in profitability raises concerns about the sustainability of this growth. In light of these results, ANI Integrated Services has experienced an adjustment in its evaluation, reflecting the ongoing challenges in maintaining profitability amidst rising costs and operational inefficiencies. The divergence between revenue growth and profit decline suggests that while the company is capable of generating sales, it faces significant hurdles in translating that revenue into sustainable profit, warranting careful observation of its future performance.