Are Prec. Electronic latest results good or bad?

Precision Electronics reported its financial results for the quarter ended September 2025, showcasing a significant year-on-year revenue growth of 48.38%, reaching net sales of ₹15.55 crores. This growth reflects the company's ability to secure project wins in a competitive telecom infrastructure market. However, the results also reveal notable challenges, particularly in profitability metrics. The company recorded a net loss of ₹1.40 crores, which marks a deterioration from the previous quarter and highlights ongoing struggles with operational efficiency.
The operating margin turned negative at -1.54%, a sharp decline from the positive margin of 3.46% in the prior quarter. This margin compression indicates that rising operational costs, including increased employee expenses and elevated interest costs, have outpaced revenue growth. The interest expenses for the quarter stood at ₹0.90 crores, further straining profitability and reflecting the company's high debt burden, which has nearly tripled over the past year.

Despite the robust revenue growth, the company's average return on equity (ROE) remains low at 2.76%, indicating weak capital efficiency and challenges in generating adequate returns for shareholders. The financial performance suggests that while Precision Electronics has managed to grow its top line, it faces significant hurdles in translating this growth into sustainable profitability.

Additionally, the company experienced an adjustment in its evaluation, reflecting the complexities of its financial health amidst these operational challenges. The overall financial picture indicates that Precision Electronics is navigating a difficult landscape, characterized by high leverage and inconsistent profitability, which could impact its future growth prospects.