Are Hazoor Multi Projects Ltd latest results good or bad?

Hazoor Multi Projects Ltd's latest financial results for Q3 FY26 reveal a complex operational landscape marked by both recovery and significant challenges. The company reported a net profit of ₹6.46 crores, a notable recovery from a loss in the previous quarter, and a year-on-year increase of 137.50%. However, net sales amounted to ₹139.04 crores, reflecting a 36.17% sequential improvement but a decline of 15.67% compared to the same quarter last year. The operating margin, excluding other income, reached 21.12%, marking the highest level in recent quarters and a substantial recovery from a negative margin in the previous quarter. This suggests improved project execution and cost management. However, the company's interest expense surged dramatically to ₹22.85 crores, a 287% increase from the prior quarter, raising concerns about debt management and financial sustainability. This increase in interest costs has overshadowed the operating profit gains, leading to questions about the company's ability to service its obligations from operating cash flows. Over the first nine months of FY26, Hazoor Multi Projects generated cumulative revenue of ₹421.17 crores but reported a cumulative loss of ₹3.47 crores, indicating a 24.15% deterioration from the previous year. The company’s cash flow dynamics also reflect operational strain, with negative cash flow from operations of ₹145 crores in FY25, funded through significant financing activities. In terms of capital efficiency, the average return on equity (ROE) of 7.34% remains below industry standards, despite a slight improvement to 8.31%. The company's debt-to-EBITDA ratio of 2.37 times and net debt-to-equity of 0.74 suggest moderate leverage, but these metrics do not account for the recent spike in interest expenses. The broader context of the real estate sector, characterized by regulatory changes and project execution delays, further complicates Hazoor Multi Projects' operational environment. The company’s performance relative to peers shows it lagging in key metrics, with a declining promoter stake from 19.82% to 16.92% over the past year, raising concerns about insider confidence. Overall, while Hazoor Multi Projects has shown some operational recovery in the latest quarter, the substantial increase in interest expenses, negative cash flows, and declining promoter confidence indicate underlying structural challenges. The company has experienced an adjustment in its evaluation, reflecting the complexities of its financial situation and market conditions.