Are Hindustan Hardy Ltd latest results good or bad?

Hindustan Hardy Ltd's latest financial results for the quarter ended September 2025 present a mixed picture. The company reported net sales of ₹25.33 crores, reflecting a year-on-year growth of 27.16% compared to ₹19.92 crores in the same quarter last year. However, this represents a sequential decline of 5.31% from ₹26.75 crores in the previous quarter, indicating potential volatility in demand. Net profit remained stable at ₹1.94 crores, unchanged from the year-ago quarter, but it saw a significant sequential decline of 34.90% from ₹2.98 crores in the previous quarter. This decline in profitability is concerning, especially given the stable revenue levels, and is attributed to a notable compression in operating and PAT margins. The operating margin fell to 10.42%, down 525 basis points from the prior quarter, while the PAT margin decreased to 7.66%, down 348 basis points sequentially. These changes suggest rising cost pressures that are impacting operational efficiency. Despite these challenges, the company maintains strong return metrics, with an average return on equity (ROE) of 23.25%, which is significantly above industry peers. The balance sheet remains conservative, with minimal long-term debt, indicating financial flexibility. However, there are concerns regarding working capital management, as operating cash flow dropped to ₹1.00 crore from ₹6.00 crores in the previous year, suggesting tighter liquidity. Overall, while Hindustan Hardy Ltd has demonstrated robust year-on-year revenue growth, the recent quarter's results highlight operational challenges, particularly in profitability and margin compression. The company saw an adjustment in its evaluation, reflecting these mixed operational trends. Investors may want to monitor future performance closely, especially regarding margin recovery and working capital management.