Are Apeejay Surrendra Park Hotels Ltd latest results good or bad?

Apeejay Surrendra Park Hotels Ltd's latest financial results for the quarter ended December 2025 reveal a complex operational landscape. The company achieved its highest-ever quarterly revenue of ₹200.06 crores, reflecting a robust sequential growth of 19.54% from the previous quarter and a year-on-year increase of 12.72%. This performance indicates strong demand in the hospitality sector, driven by improved occupancy rates and effective pricing strategies. However, despite this topline growth, the company's net profit contracted significantly, declining 24.75% year-on-year to ₹24.20 crores. This decline is primarily attributed to a combination of surging interest expenses, which rose to ₹10.11 crores—a 78.62% increase from the previous year—and an elevated tax burden of 42.43%, which further compressed net profit margins. The operating margin also saw a decrease, falling to 35.30%, down 101 basis points from the previous year, highlighting the challenges in managing operational costs amidst rising expenses. The interest coverage ratio deteriorated to 6.99 times, marking a four-quarter low, which raises concerns about the company's financial flexibility and ability to service its debt obligations. The balance sheet reflects a concerning trend in long-term debt, which has increased sharply, although it remains below levels seen in prior years. In terms of investor sentiment, there has been a noticeable decline in institutional holdings, with foreign institutional investors reducing their stake significantly. This trend suggests waning confidence in the company's near-term prospects. Overall, while Apeejay Surrendra Park Hotels has demonstrated strong revenue growth, the substantial decline in profitability and rising cost pressures indicate critical operational challenges that may impact the company's future performance. The company saw an adjustment in its evaluation, reflecting these mixed results and underlying concerns regarding its financial health and operational efficiency.