Are Kemp & Co. latest results good or bad?

Kemp & Co's latest financial results for Q2 FY26 reveal a challenging operational environment characterized by significant losses and declining revenues. The company reported net sales of ₹0.67 crores, reflecting a quarter-on-quarter decline of 10.67% and a year-on-year decrease of 2.90%. This decline in revenue has been accompanied by a net loss of ₹0.28 crores, which represents a 12.00% deterioration from the previous quarter and a substantial 75.00% increase in losses compared to the same quarter last year.
The operating margin for the quarter was recorded at -61.19%, marking the worst performance in the last seven quarters. This negative margin indicates severe operational inefficiencies, as employee costs accounted for over 53% of total revenue, creating a structural profitability challenge that has not been effectively addressed by management. The return on equity (ROE) stood at -0.77%, further highlighting the company's struggle to generate positive returns for shareholders.

Kemp & Co's operating profit before depreciation, interest, and tax (PBDIT) was reported at ₹-0.41 crores, indicating a significant operational loss. The company has faced five consecutive quarters of losses since March 2024, underscoring ongoing challenges in achieving profitability. The financial trajectory is concerning, with a notable decline in shareholder funds, which fell by 38.84% over the past year.

In light of these results, the company saw an adjustment in its evaluation, reflecting the ongoing operational difficulties and lack of clear pathways to recovery. The overall financial performance suggests that Kemp & Co is grappling with fundamental business viability issues, requiring decisive management action to stabilize operations and return to profitability.