Are Sri Havisha latest results good or bad?

Sri Havisha's latest financial results for Q2 FY26 indicate significant operational challenges. The company reported net sales of ₹3.12 crores, reflecting a year-on-year decline of 29.73% from ₹4.44 crores in Q2 FY25, although there was a sequential improvement of 11.83% compared to Q1 FY26's ₹2.79 crores. This decline in revenue underscores a troubling erosion of top-line momentum, despite a historical five-year sales compound annual growth rate (CAGR) of 73.41%.
The operating margin has deteriorated sharply, with the latest figure at just 0.64%, down from 32.88% in the same quarter last year. This drastic reduction highlights severe operational difficulties, as the operating profit before depreciation, interest, tax, and other income was only ₹0.02 crores. Additionally, the company reported a net loss of ₹1.51 crores, translating to a negative profit after tax (PAT) margin of -48.40%, which is a stark contrast to the profit of ₹0.07 crores recorded in Q2 FY25.

The financial structure of Sri Havisha appears increasingly unsustainable, with high interest costs of ₹1.17 crores and depreciation of ₹0.62 crores overwhelming operational earnings. The company's average return on equity (ROE) has plunged to -17.16%, and the return on capital employed (ROCE) stands at -2.11%, indicating that the company is destroying value rather than creating it.

In light of these results, the company saw an adjustment in its evaluation, reflecting the ongoing concerns about its financial sustainability and operational viability. The absence of institutional investor interest, coupled with a high debt burden and negative cash generation, further complicates the outlook for Sri Havisha. Overall, the results depict a company grappling with significant financial and operational hurdles, necessitating substantial restructuring or capital infusion to navigate its current trajectory.