Are Waterbase latest results good or bad?

Waterbase's latest financial results reflect significant operational challenges. In the quarter ending September 2025, the company reported net sales of ₹81.72 crores, which represents a year-on-year growth of 31.59% from ₹62.10 crores in the same quarter last year. However, this growth was overshadowed by a sequential decline of 6.22% from the previous quarter's sales of ₹87.14 crores, indicating volatility in revenue generation.
The company's net loss for the same quarter was ₹5.41 crores, marking a substantial deterioration of 64.44% compared to the prior quarter's loss of ₹3.29 crores. This continued trend of losses has persisted for seven consecutive quarters, raising concerns about the company's ability to achieve profitability. The operating margin, excluding other income, was recorded at -5.64%, which is a decline from -3.11% in the previous quarter, further highlighting issues with operational efficiency.

Despite the positive year-on-year revenue growth, the company's operational performance remains under pressure, as indicated by the negative operating profit before depreciation, interest, tax, and other income (PBDIT) of ₹4.61 crores. The gross profit margin also deteriorated to -6.75%, reflecting challenges related to raw material costs and pricing power.

The financial metrics suggest that Waterbase is facing structural issues beyond cyclical fluctuations, with a return on equity (ROE) of -11.70% and a return on capital employed (ROCE) of -13.71%. The company has seen a revision in its evaluation, which now reflects concerns about its long-term financial performance and operational viability.

In summary, while Waterbase has shown some top-line growth, the persistent losses and deteriorating margins indicate significant operational challenges that need to be addressed for any potential turnaround. The absence of institutional interest and the company's performance relative to its peers further complicate its outlook.