Are Anka India Ltd latest results good or bad?

Anka India Ltd's latest financial results for Q2 FY26 present a complex picture characterized by significant revenue growth but ongoing challenges in profitability. The company reported net sales of ₹5.61 crores, reflecting a remarkable year-on-year growth of 419.44% compared to ₹1.08 crores in Q2 FY25. This surge indicates a successful pivot to IT solutions and larger contracts. However, on a sequential basis, net sales declined by 4.75% from ₹5.89 crores in Q1 FY26, suggesting potential volatility in project execution or client engagement.
Despite the impressive revenue increase, net profit was reported at ₹0.10 crores, which represents a substantial year-on-year decline of 128.57%. This highlights ongoing concerns regarding the company's ability to convert revenue growth into meaningful profitability. The operating margin improved to 6.95% from 2.90% year-on-year, indicating some operational efficiency gains, yet the net profit margin remains low at 1.78%, only slightly better than the previous year's 1.66%.

Anka India's employee costs have significantly risen, comprising 83.78% of revenue in Q2 FY26, which constrains the company's margin expansion potential. The return on equity (ROE) stands at a low 0.89%, and the return on capital employed (ROCE) is negative at -1.57%, raising concerns about capital efficiency and long-term sustainability.

Additionally, the company experienced a dramatic reduction in promoter shareholding from 55.00% to 16.42%, which raises governance concerns and indicates a lack of confidence from insiders. The absence of institutional ownership further compounds these concerns, as it suggests that sophisticated investors are wary of the company's fundamentals.

Overall, Anka India Ltd's financial results illustrate a scenario of extraordinary revenue growth juxtaposed with significant profitability challenges and governance issues. The company saw an adjustment in its evaluation, reflecting these underlying operational trends and events.