Are Khandwala Securities Ltd latest results good or bad?

Khandwala Securities Ltd's latest financial results for the third quarter of FY26 reflect significant operational challenges. The company reported net sales of ₹1.06 crores, which represents a substantial decline of 68.82% compared to the previous quarter and a year-on-year decrease of 60.74% from ₹2.70 crores in Q3 FY25. This sharp revenue drop indicates severe disruptions in its core institutional dealing and investment banking activities. The operating profit before depreciation, interest, tax, and other income (PBDIT) turned negative at ₹-1.01 crores, contrasting sharply with a positive ₹0.26 crores in Q3 FY25. The operating margin, excluding other income, deteriorated to -95.28%, highlighting that the company's core operations are incurring significant losses rather than generating returns. Employee costs remained high at ₹0.90 crores, accounting for 84.91% of total revenue, which underscores the unsustainable cost structure amid declining revenues. Khandwala Securities also reported a net loss of ₹0.49 crores for the quarter, a stark contrast to a profit of ₹0.54 crores in the same quarter last year. This resulted in a negative return on equity of -6.52%, indicating that the company is not effectively utilizing its capital to generate value for shareholders. On a nine-month basis for FY26, net sales totaled ₹5.60 crores, reflecting a 33.01% decline from the previous year, with a cumulative net loss of ₹0.84 crores. This persistent weakness suggests that the challenges faced by the company are structural rather than merely the result of temporary market conditions. The company has also experienced a notable decline in its stock performance, down 32.63% over the past year, while the broader market, represented by the Sensex, has gained 9.85%. This underperformance highlights the specific difficulties faced by Khandwala Securities in capitalizing on favorable market conditions. In light of these results, the company saw an adjustment in its evaluation, reflecting the ongoing operational difficulties and the need for significant corrective actions to restore financial stability. Overall, Khandwala Securities Ltd's financial performance in this quarter indicates a critical need for management to address its revenue sustainability and cost structure to navigate through these challenging times effectively.