Are Lovable Lingerie Ltd latest results good or bad?

Lovable Lingerie Ltd's latest financial results for the quarter ending December 2025 reveal a complex operational landscape. The company reported a year-on-year revenue growth of 26.26%, reaching ₹10.53 crores, which marks a notable recovery from previous declines. However, this topline growth is accompanied by significant concerns regarding profitability. The operating profit margin, excluding other income, stands at a mere 0.19%, indicating that the core business is barely profitable and remains close to breakeven. The net profit for the quarter was ₹2.70 crores, a substantial turnaround from a loss in the same quarter last year, reflecting a 120.38% year-on-year growth. Despite this positive shift, it is critical to note that over half of the profit before tax (56.72%) was derived from non-operating income, raising questions about the sustainability and quality of earnings generated from core operations. The operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) was only ₹0.02 crores, which, while an improvement from prior losses, highlights ongoing operational challenges. The company's return on equity (ROE) remains low at 1.17%, and the return on capital employed (ROCE) is negative at -7.57%, indicating that the company is not generating adequate returns for its shareholders. Additionally, Lovable Lingerie's five-year sales growth has been negative, with a significant decline in market share, suggesting that the company faces intense competition and operational inefficiencies. The stock has also shown persistent underperformance compared to broader market indices, reflecting investor skepticism regarding the company's long-term prospects. In summary, while Lovable Lingerie Ltd has shown some improvements in revenue and a return to profitability, the heavy reliance on non-operating income and minimal operating margins signal fundamental weaknesses in its business model. The company has experienced an adjustment in its evaluation, reflecting the ongoing challenges it faces in achieving sustainable operational profitability and market competitiveness.