Are Trustedge Capital Ltd latest results good or bad?

Trustedge Capital Ltd's latest financial results for Q3 FY26 present a complex scenario. The company reported net sales of ₹1.31 crores, reflecting a sequential growth of 42.39% from the previous quarter and a significant year-on-year increase of 385.19%. This growth, however, comes from a very low revenue base, indicating that while the company is generating higher sales compared to previous periods, the overall revenue remains modest relative to its market capitalization of ₹115 crores.
On the profitability front, Trustedge Capital achieved a net profit of ₹0.14 crores, marking a return to profitability after two consecutive quarters of losses. This represents a substantial improvement compared to the previous quarter's loss of ₹0.08 crores. However, the profit margins are concerning; the profit after tax margin is reported at 10.69%, which is significantly lower than the 51.85% margin achieved in the same quarter last year. This decline is largely attributed to a dramatic increase in employee costs, which surged from ₹0.02 crores to ₹0.97 crores year-on-year, fundamentally altering the company's cost structure.

The operating margin, excluding other income, stands at 6.87%, a stark contrast to the 70.37% recorded in Q3 FY25. This sharp decline raises questions about the sustainability of the company's core operational earnings, especially since the return to profitability was supported by ₹0.10 crores in other income.

Overall, while Trustedge Capital has shown some operational momentum with increased sales and a return to profitability, the underlying financial metrics reveal significant challenges, particularly in terms of profitability and cost management. The company has seen an adjustment in its evaluation, reflecting these operational trends and the broader context of its performance within the NBFC sector.