Are Nimbus Projects Ltd latest results good or bad?

Nimbus Projects Ltd's latest financial results present a complex picture that warrants careful analysis. In Q2 FY26, the company reported a consolidated net profit of ₹17.46 crores, a significant turnaround from a loss of ₹28.79 crores in the previous quarter. However, this profit was largely driven by other income, raising concerns about the sustainability of such gains. The company's revenue for the quarter was ₹3.90 crores, reflecting a stark year-on-year decline of 97.70% from ₹169.42 crores in Q2 FY25, indicating severe operational challenges. While there was a quarter-on-quarter growth of 12.05%, the overall revenue trajectory suggests a troubling trend of diminishing core business activity. The operating margin, excluding other income, was deeply negative at -904.10%, highlighting significant stress in the company's fundamental business model. On a half-yearly basis, Nimbus Projects reported total net sales of just ₹8.27 crores for H1 FY26, a collapse of 95.28% compared to the same period last year, with a consolidated net profit of negative ₹27.05 crores, contrasting sharply with a profit of ₹100.75 crores in H1 FY25. The company's reliance on non-operating income to achieve profitability raises questions about the quality and sustainability of its earnings. Additionally, the company's balance sheet shows a substantial increase in total debt and current liabilities, which surged from ₹20.62 crores to ₹592.67 crores in FY25. The debtors turnover ratio has also deteriorated to just 0.49 times, indicating challenges in converting sales into cash. Overall, while Nimbus Projects Ltd has shown a quarterly profit turnaround, the underlying operational performance remains concerning, characterized by a dramatic revenue decline and significant operational losses. The company saw an adjustment in its evaluation, reflecting these challenges. Investors should be cautious and closely monitor the company's ability to stabilize its core operations and improve cash flow sustainability moving forward.