Are Purple Finance latest results good or bad?

Purple Finance's latest financial results for Q2 FY26 present a complex picture of growth coupled with ongoing challenges. The company reported a significant revenue increase of 79.61% quarter-on-quarter, reaching ₹11.10 crores, which marks the highest quarterly performance in its history. This growth is further underscored by a remarkable year-on-year revenue growth of 311.11%.
Despite this strong revenue performance, the company continues to face difficulties in achieving profitability. The net loss for the quarter narrowed to ₹1.63 crores, reflecting a 66.32% improvement from the previous quarter's loss of ₹4.84 crores. Operating margins turned positive for the first time in eight quarters, reaching 11.62%, a substantial recovery from the negative 55.18% in Q1 FY26. However, the operating profit before depreciation, interest, and tax was modest at ₹1.29 crores, insufficient to cover the rising interest expenses of ₹2.94 crores, which increased by 15.75% from the prior quarter.

The company’s operational challenges are compounded by high employee costs, which accounted for nearly 70% of total revenue, indicating a need for cost management as it scales. Additionally, the financial foundation appears constrained, with a debt-to-equity ratio of 0.74 and significant current liabilities exceeding current assets, raising concerns about liquidity.

The shareholding pattern has also changed, with a notable decline in promoter holding from 72.11% to 50.24% over a nine-month period, suggesting a potential lack of confidence from insiders. This, combined with zero institutional investor interest, reflects broader concerns about the company's future prospects.

Overall, while Purple Finance demonstrates robust revenue growth, the persistent losses, high operational costs, and liquidity challenges indicate that the path to sustainable profitability remains uncertain. The company has seen an adjustment in its evaluation, reflecting these mixed operational trends.