Are Howard Hotels Ltd latest results good or bad?

Howard Hotels Ltd's latest financial results for Q3 FY26 reflect significant operational fluctuations characteristic of its seasonal business model. The company reported a net profit of ₹1.17 crore, a notable recovery from a loss in the previous quarter, while revenue surged to ₹5.35 crore, marking a substantial quarter-on-quarter growth of 99.63%. This increase in revenue aligns with the typical winter demand surge, although year-on-year growth remained modest at 1.33%, indicating ongoing competitive pressures within the hospitality sector. The operating margin improved dramatically to 28.79%, recovering from a negative margin in Q2 FY26, which underscores the operational leverage during peak seasons. However, this margin is still below the 33.52% achieved in Q3 FY25, suggesting challenges in maintaining profitability amidst competitive dynamics. Despite the positive quarterly results, the company continues to face structural challenges, including weak return metrics, with an average return on equity (ROE) of 3.74% and return on capital employed (ROCE) of 3.19%. These figures highlight inefficiencies in capital utilization and profitability relative to the capital deployed in hotel assets. The financial performance indicates that while Howard Hotels experienced a rebound in profitability during the peak season, the underlying operational weaknesses and seasonal volatility remain significant concerns for long-term value creation. Additionally, the company has seen an adjustment in its evaluation, reflecting the mixed nature of its financial health amidst the broader market context.