Are Scoobee Day Garments India Ltd latest results good or bad?

The latest financial results for Scoobee Day Garments India Ltd for Q3 FY26 indicate significant operational challenges. The company reported a net loss of ₹2.55 crores, which reflects a deepening of losses compared to the previous year. While there was a sequential recovery in revenue, which rose to ₹6.42 crores, this figure remains substantially lower than the ₹10.94 crores recorded in the same quarter of the previous year, highlighting a year-over-year decline of 41.32%. The operating margin, excluding other income, was reported at -24.45%, indicating persistent operational inefficiencies. This negative margin suggests that the company is struggling to cover its operating costs, which is further evidenced by the negative operating profit before depreciation, interest, and tax (PBDIT) of ₹-1.57 crores. The profit after tax (PAT) margin was also notably negative at -39.72%, marking severe profitability erosion. The financial performance over recent quarters shows volatility, with revenue fluctuating significantly, indicating instability in order flows and production capacity. The cost structure reveals high employee costs, which accounted for 58.41% of net sales in Q3 FY26, suggesting potential overstaffing issues relative to revenue generation. In terms of balance sheet health, the company operates with high leverage, as evidenced by a debt-to-equity ratio of 14.92 times, which raises concerns about its financial stability. Additionally, the cash flow situation is troubling, with operating cash flows turning negative at ₹4.00 crores in FY25, a stark contrast to the positive cash flow of ₹10.00 crores in FY24. Overall, the results reflect a company facing critical operational and financial challenges, necessitating urgent strategic intervention to address its ongoing issues. Furthermore, the company saw an adjustment in its evaluation, reflecting the ongoing struggles to establish sustainable profitability amidst these challenges.