Are Arihant Capital Markets Ltd latest results good or bad?

Arihant Capital Markets Ltd has reported significant challenges in its latest financial results for the quarter ended December 2025. The company experienced a net profit of ₹5.18 crore, reflecting a substantial year-on-year decline of 57.71%. Revenue for the same period was ₹49.05 crore, which also marked a contraction of 5.29% compared to the previous year. This decline in revenue is indicative of a reversal from the company's historical growth trajectory, particularly concerning given the broader capital markets sector's performance, which has generally benefited from increased retail participation and trading volumes. The operational metrics reveal a concerning trend, with the operating margin falling to 28.40%, down from 42.16% in the previous quarter, representing the lowest level in eight quarters. Similarly, the profit after tax margin decreased to 10.56%, a significant drop from 22.96% sequentially. These figures suggest that the company is facing structural issues, potentially due to pricing pressures or elevated operating costs, which have limited its ability to maintain profitability amidst declining revenues. On a nine-month basis for FY26, net sales totaled ₹156.80 crore, down 21.98% from the same period in FY25, while net profit for the nine months was ₹30.96 crore, reflecting a 34.26% decline year-on-year. This sustained decline over multiple quarters indicates that the challenges faced by Arihant Capital are not merely cyclical but may reflect deeper competitive or operational difficulties. Furthermore, the company has seen a reduction in promoter stake from 69.81% to 67.67% during this period, raising questions about insider confidence amid operational challenges. The lack of institutional interest, with negligible holdings from mutual funds and foreign institutional investors, further complicates the company's situation. Overall, Arihant Capital's latest results highlight a critical need for monitoring as the company navigates significant operational pressures and competitive challenges in a growing market. The company saw an adjustment in its evaluation, reflecting the ongoing concerns regarding its financial performance and market positioning.