Are Garuda Construction and Engineering Ltd latest results good or bad?

Garuda Construction and Engineering Ltd's latest results for Q3 FY26 reflect a strong operational performance, characterized by record-high net profit of ₹32.90 crores and a quarterly revenue of ₹140.02 crores. The operating margin reached an all-time high of 32.22%, indicating effective cost management and pricing strategies in a competitive construction sector. The company reported a standalone net profit growth of 21.48% compared to the previous quarter, alongside a 20.26% increase in net sales. The company's return on equity stands at 22.24%, showcasing its ability to generate substantial returns relative to shareholder equity. Furthermore, the balance sheet remains robust, with minimal long-term debt, enhancing financial stability. However, it is noteworthy that the company generated negative operating cash flow of ₹110 crores for FY25, primarily due to an increase in working capital, which suggests challenges in cash collection despite strong profit figures. In terms of market performance, Garuda Construction has outperformed the broader construction sector significantly over the past year, with a one-year stock return of 75.33%. This performance has led to an adjustment in its evaluation, reflecting the market's recognition of its operational strengths. Overall, Garuda Construction's Q3 FY26 results highlight exceptional operational execution and profitability metrics, although the negative cash flow and recent trends in institutional holdings warrant careful monitoring as the company navigates its growth trajectory.