Are Shriram Asset Management Co Ltd latest results good or bad?

The latest financial results for Shriram Asset Management Co Ltd reveal a complex situation characterized by significant operational challenges. In the third quarter of FY26, the company reported a net loss of ₹5.19 crores, which reflects a worsening from the previous quarter's loss. This marks the seventh consecutive quarter of losses, underscoring persistent profitability issues. On a more positive note, the company achieved revenue of ₹3.50 crores in Q3 FY26, which represents a notable year-on-year growth of 150.00% compared to ₹1.40 crores in the same quarter of the previous year. Sequentially, revenue also increased by 17.85% from ₹2.97 crores in Q2 FY26. However, this revenue growth has been overshadowed by escalating operational costs, particularly employee expenses, which amounted to ₹5.79 crores in the latest quarter, exceeding revenue by a substantial margin. The operating margin for Q3 FY26 was reported at -145.43%, indicating a lack of operational efficiency, while the profit after tax (PAT) margin was at -148.29%. These figures highlight the company's struggle to convert revenue growth into profitability, as operational losses continue to mount despite the increase in sales. Additionally, the company has seen a decline in shareholder funds, which dropped to ₹63.00 crores as of March 2025 from ₹77.56 crores in March 2024, primarily due to accumulated losses. The return on equity (ROE) and return on capital employed (ROCE) are both negative, reflecting severe capital inefficiency. Overall, while Shriram Asset Management has demonstrated impressive revenue growth, the underlying issues related to cost management and profitability present significant challenges. The company has experienced an adjustment in its evaluation, reflecting the ongoing concerns regarding its operational viability and financial health.