Are IL&FS Engineering & Construction Co Ltd latest results good or bad?

IL&FS Engineering & Construction Co Ltd's latest financial results for Q3 FY26 reveal a complex situation characterized by both revenue growth and ongoing operational challenges. The company reported a net profit of ₹1.78 crores, which, while positive, was largely supported by other income rather than core operational strength. The operating profit margin, excluding other income, remained negative at -5.04%, indicating persistent difficulties in generating sustainable profits from its primary business activities. Revenue for the quarter was ₹62.36 crores, reflecting a sequential increase of 14.36% from the previous quarter. However, this figure is still 8.17% lower than the revenue reported in Q3 FY25, highlighting ongoing struggles in project execution and revenue stability. Over the nine-month period ending December 2025, the company experienced a consolidated net loss of ₹7.02 crores, which represents a year-on-year decline of 27.91%. The balance sheet presents significant concerns, with negative shareholder equity of ₹-3,189.28 crores and a book value per share of ₹-243.23. This situation raises serious questions about the company's financial health and ability to sustain operations. Additionally, the company has reported negative cash flow from operations, amounting to ₹-48.00 crores for FY25, further underscoring the challenges it faces in converting revenue into cash. Despite a marginal improvement in operating losses compared to the previous quarter, the overall financial performance indicates that IL&FS Engineering is grappling with fundamental issues that hinder its recovery. The company has seen an adjustment in its evaluation, reflecting the ongoing operational and financial difficulties it faces. Investors should closely monitor the company's ability to generate positive cash flow and restore operational profitability in the coming quarters.