Are Dhansafal Finserve Ltd latest results good or bad?

The latest financial results for Dhansafal Finserve Ltd reveal a company experiencing significant revenue growth, with net sales increasing by 27.54% quarter-on-quarter to ₹3.52 crores in Q3 FY26, and an impressive year-on-year growth of 198.31%. This growth trajectory indicates a strong sales momentum, as the company has scaled its revenue from ₹1.00 crore in FY24 to ₹4.00 crores in FY25. However, the company's profitability remains a concern, as evidenced by a net profit of ₹0.18 crores, translating to a PAT margin of only 5.11%. This margin, while a turnaround from a loss in the previous quarter, raises questions about the sustainability of profitability given the high operational costs, including a significant increase in employee expenses and interest costs. The operational efficiency metrics highlight challenges, particularly with an average return on equity (ROE) of just 2.63%, which suggests poor capital efficiency and raises concerns about long-term value creation for shareholders. The latest ROE figure of 0.18% further underscores these issues. Additionally, the company's return on capital employed (ROCE) is low at 0.75%, indicating fundamental operational inefficiencies. Despite these challenges, the company has seen an adjustment in its evaluation, reflecting the complexities of its financial performance. The valuation metrics present a stark contrast to industry averages, with a P/E ratio of 476 times trailing earnings, suggesting a significant disconnect between market valuation and operational realities. In summary, while Dhansafal Finserve Ltd has demonstrated notable revenue growth and a return to profitability, the underlying operational challenges and weak capital efficiency metrics highlight critical areas of concern that investors should monitor closely.