Are Kalyan Capitals Ltd latest results good or bad?

Kalyan Capitals Ltd's latest financial results present a complex picture. For the quarter ending December 2025, the company reported net sales of ₹9.87 crores, reflecting a year-on-year increase of 123.81% and a sequential growth of 15.17%. This marks the highest quarterly revenue recorded by the company. However, profitability faced significant challenges, as the consolidated net profit fell to ₹0.59 crores, which is a 48.25% decrease compared to the previous quarter, despite a year-on-year increase of 180.95%. The operational metrics indicate that while the company achieved a strong top-line performance, this growth was overshadowed by escalating interest expenses, which surged to ₹7.29 crores, consuming 73.85% of net sales. This resulted in a profit after tax (PAT) margin of 8.31%, down from 15.99% in the prior quarter, highlighting a concerning trend of margin compression. The financial performance underscores a fundamental tension in Kalyan Capitals' business model, where aggressive revenue expansion is being funded by high-cost debt. The company’s debt-to-equity ratio stands at 4.97 times, indicating a high level of leverage that raises questions about the sustainability of its growth trajectory. The interest coverage ratio is weak at 1.45 times, suggesting limited capacity to service debt obligations. In terms of overall evaluation, the company saw an adjustment in its evaluation, reflecting the structural concerns arising from its high leverage and declining profitability margins. The trajectory of profitability has been troubling, with PAT margins declining from 27.41% in Q1 FY26 to 8.31% in Q3 FY26, indicating that the current growth model may not be sustainable. In summary, while Kalyan Capitals Ltd has achieved impressive revenue growth, the accompanying rise in interest expenses and the resulting pressure on profitability raise significant concerns about the viability of its business model moving forward.