Are One Mobikwik Systems Ltd latest results good or bad?

One Mobikwik Systems Ltd's latest financial results for the quarter ended December 2025 indicate a significant milestone as the company achieved its first quarterly profit after several periods of losses. The net profit for Q3 FY26 was reported at ₹4.05 crores, marking a notable turnaround from previous losses. This quarter also saw net sales reach ₹288.95 crores, reflecting a quarter-on-quarter growth of 6.94%, which contrasts with a slight decline in the prior quarter. The operating profit before depreciation, interest, and tax (excluding other income) improved to ₹6.70 crores, a substantial recovery from a negative figure in the previous quarter, resulting in an operating margin of 2.32%, the highest in seven quarters. This improvement suggests enhanced operational efficiency and cost management, particularly as employee costs decreased. However, while the reported profit is a positive development, it is important to note that the sustainability of this profitability remains in question. A significant portion of the profit was supported by non-operating income, which constituted over 200% of profit before tax, highlighting that core operations have yet to achieve consistent profitability. The company’s return on equity remains at 0.0%, indicating challenges in generating returns on shareholder capital. Additionally, One Mobikwik's balance sheet shows a decline in long-term debt, now at zero, but current liabilities have increased, raising concerns about liquidity. The cash flow analysis reveals negative operating cash flow for the previous fiscal year, suggesting ongoing operational challenges despite recent improvements. The company has experienced an adjustment in its evaluation, reflecting the mixed signals from its financial performance. While the growth in revenue and the achievement of profitability are noteworthy, the reliance on non-operating income and the weak return metrics present significant concerns for long-term investors. The competitive landscape in the fintech sector further complicates the outlook, as One Mobikwik continues to navigate challenges in establishing a sustainable business model.