Are Chartered Capital & Investment Ltd latest results good or bad?

Chartered Capital & Investment Ltd's latest financial results for Q3 FY26 reveal a complex picture characterized by strong profit growth despite negligible revenue generation. The company reported a net profit of ₹2.46 crores, reflecting a year-on-year increase of 47.31%, while net sales remained minimal at ₹0.01 crores. This highlights a significant reliance on non-operating income, which accounted for a substantial portion of the operating profit before depreciation, interest, and tax (PBDIT) of ₹2.97 crores, marking a sequential improvement of 65.00%. The results indicate that while the absolute profit figures appear robust, they are largely driven by other income rather than core merchant banking operations. This raises concerns about the sustainability and quality of earnings, especially given the company's historical average return on equity (ROE) of just 1.54%, which is significantly below industry standards. The latest ROE of 4.00% shows marginal improvement but still suggests poor capital efficiency. Additionally, the company's cash flow dynamics are troubling, with operating cash flows recorded at negative ₹13.00 crores for FY25, indicating that reported profits are not translating into actual cash generation. This persistent negative cash flow, combined with the absence of institutional interest, points to potential structural issues within the business model. Furthermore, Chartered Capital's evaluation has seen an adjustment, reflecting the mixed signals from its financial performance. The company maintains a debt-free balance sheet, which is a positive aspect, yet the minimal revenue generation and high dependency on non-core income raise fundamental questions about its operational viability and future growth prospects. In summary, Chartered Capital & Investment Ltd's latest results depict a scenario of strong profit growth overshadowed by significant operational challenges, particularly concerning revenue generation and capital efficiency. The company's reliance on non-operating income and the persistent negative cash flows warrant careful consideration of its long-term sustainability and investment potential.