Are H.G. Infra Engineering Ltd latest results good or bad?

H.G. Infra Engineering Ltd's latest financial results for Q3 FY26 present a mixed picture of operational performance amid significant financial pressures. The company reported a net profit of ₹94.28 crore, which reflects an 18.15% decline year-on-year, contrasting with a notable sequential increase of 80.68% from the previous quarter. This decline in net profit highlights the impact of rising interest costs, which surged to ₹129.18 crore, marking a 72.55% increase compared to the same quarter last year. On the revenue front, H.G. Infra achieved ₹1,421 crore in net sales, demonstrating a 12.36% year-on-year growth and a substantial 57.12% increase from the previous quarter. This growth is indicative of the company's effective project execution and order book conversion, typical of the seasonal uptick in the construction sector during the October-December period. However, the operating margin saw a contraction to 21.73%, down from 22.80% in the prior quarter, reflecting the pressures from escalating interest expenses. Despite achieving the highest operating profit excluding other income in recent quarters at ₹308.79 crore, the overall profitability remains under strain. The company's aggressive expansion strategy has led to a significant increase in long-term debt, which rose by 187.58% year-on-year, resulting in a debt-to-equity ratio of 1.84 times. This elevated leverage raises concerns regarding the company's financial stability, especially in light of the negative operating cash flow reported for FY25. Overall, while H.G. Infra Engineering Ltd has demonstrated strong revenue growth and operational efficiency, the mounting financial pressures and declining net profit margins suggest challenges ahead. The company has experienced an adjustment in its evaluation, reflecting these underlying trends and concerns.