Are Hariyana Ship Breakers Ltd latest results good or bad?

The latest financial results for Hariyana Ship Breakers Ltd indicate a company grappling with significant operational challenges. The reported consolidated net profit for Q2 FY26 was ₹2.25 crores, marking a notable increase from the previous quarter, driven primarily by non-operating income, which constituted a substantial portion of the profit before tax. However, the underlying operational performance remains concerning, with net sales reported at only ₹1.30 crores, reflecting minimal activity compared to historical figures where the company generated ₹148 crores in annual sales during FY24. In the subsequent quarter ending December 2025, the company reported net sales of ₹2.20 crores, indicating a sequential growth of 69.23% from the prior quarter. This growth, while positive, comes after a prolonged period of near-zero sales, highlighting the ongoing struggle to return to meaningful operational levels. The consolidated net profit for this quarter increased to ₹6.82 crores, which is a significant rise, yet it is essential to note that this profit is heavily reliant on non-operating income. The operating profit margin, excluding other income, was reported at 81.82%, which appears strong but is based on a very low revenue base, rendering traditional profitability metrics less meaningful. The company has faced six consecutive quarters of minimal or zero sales, raising questions about its operational viability and sustainability. Furthermore, the financial structure reveals a company transitioning into an investment holding entity rather than an active player in ship-breaking, with a significant portion of its income derived from investments rather than core operations. The balance sheet shows a negative working capital position, which could pose liquidity challenges moving forward. Overall, while there has been a recent adjustment in the company's evaluation, the persistent operational difficulties and reliance on non-operating income suggest that the path to recovery remains fraught with challenges. The ship-breaking industry itself is facing headwinds, including regulatory pressures and fluctuating market conditions, which further complicate the outlook for Hariyana Ship Breakers Ltd.