Are Star Housing Finance Ltd latest results good or bad?

Star Housing Finance Ltd's latest financial results highlight significant challenges within the company. For the quarter ending December 2025, the company reported a net profit of ₹0.49 crores, marking a substantial decline of 76.0% quarter-on-quarter and a decrease of 72.6% year-on-year. This represents the lowest quarterly profit in over two years, indicating a troubling shift in its financial performance. Despite a year-on-year net sales growth of 9.59%, reaching ₹25.82 crores, this revenue increase has not translated into profitability. The profit after tax (PAT) margin has contracted dramatically to 1.90%, down from 8.66% in the same quarter last year. This compression in margins raises concerns about operational efficiency and cost management, particularly as operating profit before depreciation, interest, and tax (PBDIT) also fell to its lowest level in recent quarters. Additionally, the return on equity (ROE) stands at a weak 5.59%, significantly below peer averages, suggesting inefficient use of shareholder capital. The company's debt-to-equity ratio of 2.67 indicates high financial leverage, which could amplify risks in a challenging economic environment. The shareholding dynamics reveal a gradual decline in promoter holdings, which may signal concerns regarding the company's future prospects. Furthermore, the absence of institutional support, with no mutual fund or foreign institutional investor holdings, raises questions about market confidence in Star Housing Finance. Overall, the financial data reflects a company grappling with severe profitability issues, margin compression, and operational challenges, leading to an adjustment in its evaluation. Investors may need to closely monitor future performance to assess whether these trends can be reversed.