Are Shradha AI Tech latest results good or bad?

Shradha AI Technologies has released its financial results for the quarter ending March 2025, which reflect a complex operational landscape. The company reported a Profit After Tax (PAT) of Rs 5.43 crore for the latest six months, indicating a year-on-year growth of 43.65%. This suggests a notable performance in profitability, although it is important to consider the context of this growth.
However, the financial snapshot for the quarter ending March 2025 reveals challenges. The company experienced a decline in net sales, with a quarter-over-quarter change of -40.62%, contrasting with a previous growth of 46.05% in December 2024. Additionally, the standalone net profit also saw a decline of -30.84% compared to the previous quarter's growth of 23.94%.

Operating profit, excluding other income, decreased by -47.62%, indicating a significant drop in operational efficiency. Furthermore, the operating profit margin, excluding other income, fell by -8.61%, which may raise concerns regarding the company's core business performance.

It is noteworthy that a substantial portion of the company's income, specifically 35.12% of Profit Before Tax, is derived from non-operating activities. This reliance on non-business income raises questions about the sustainability of its business model moving forward.

In light of these results, Shradha AI Technologies has seen an adjustment in its evaluation, reflecting the complexities of its operational performance amidst the recent growth in profitability. The company faces the challenge of addressing these operational declines while leveraging its recent PAT growth to navigate its future.