Are Saj Hotels Ltd latest results good or bad?

Saj Hotels Ltd's latest financial results for Q3 FY26 present a complex picture, characterized by both sequential improvements and year-on-year declines. The company reported net sales of ₹4.60 crores, reflecting a 16.46% increase compared to the previous quarter, which indicates some operational momentum, particularly during the festive season. However, this figure represents a 4.56% decline from the same quarter last year, raising concerns about the company's ability to maintain its market share in a competitive hospitality landscape. In terms of profitability, Saj Hotels achieved a net profit of ₹1.02 crores for the quarter, marking a 21.43% increase quarter-on-quarter. This is a positive development, yet it is important to note that the net profit has decreased by 14.29% year-on-year, highlighting ongoing challenges in sustaining profitability over a longer period. The operating margin expanded to 37.83%, driven by improved operational efficiency, which is a noteworthy achievement compared to the previous quarter's margin of 35.19%. Despite these sequential improvements, the nine-month performance ending December 2025 shows a concerning decline of 36.21% in net profit compared to the same period last year. This decline underscores the significant challenges faced during the earlier part of the fiscal year, particularly in Q1 FY26, when net profit fell drastically. The company's reliance on other income has also increased, contributing nearly 19% to total revenue in Q3 FY26, which raises questions about the sustainability of its core hospitality operations. Furthermore, the return on equity (ROE) remains low at 3.23%, indicating poor capital efficiency, while the return on capital employed (ROCE) is similarly weak at 3.56%. Overall, while Saj Hotels has shown some positive trends in its quarterly performance, the year-on-year declines and ongoing operational challenges suggest that the company is navigating a difficult environment. The company has seen an adjustment in its evaluation, reflecting these mixed operational results and the broader context of its performance relative to the hospitality sector.