Are SRG Housing Finance Ltd latest results good or bad?

The latest financial results for SRG Housing Finance Ltd reveal a complex picture of operational growth coupled with challenges in profitability and valuation. In the quarter ending December 2025, the company reported net sales of ₹47.54 crores, reflecting a year-on-year growth of 28.35% from ₹37.04 crores in the same quarter last year. This performance marks the highest quarterly revenue on record for the company, indicating strong loan disbursement momentum in its core market of Rajasthan. Additionally, the net profit for the same period was ₹8.21 crores, which represents a significant year-on-year increase of 43.00% from ₹5.74 crores. However, despite these positive growth metrics, there are notable concerns regarding profitability margins. The net profit showed a slight sequential decline of 0.49% from the previous quarter, suggesting some margin pressure. The operating profit margin, while at a healthy 65.69%, has also seen fluctuations, indicating rising operational costs that may impact future profitability. The company's return on equity (ROE) stands at 13.64% on average, but the latest figure indicates a deterioration to 9.66%, raising concerns about capital efficiency. Furthermore, the absence of institutional investor participation and the high price-to-earnings (P/E) ratio of 16.00x relative to the sector average suggest that the company's valuation may be perceived as expensive given its current financial performance. Overall, while SRG Housing Finance Ltd has demonstrated strong top-line growth, the underlying challenges in profitability, capital efficiency, and valuation metrics warrant careful consideration. The company has experienced an adjustment in its evaluation, reflecting the mixed signals from its financial performance and market positioning. Investors should monitor these trends closely, as they could significantly impact the company's future trajectory.