Are Xelpmoc Design and Tech Ltd latest results good or bad?

Xelpmoc Design and Tech Ltd's latest financial results for Q2 FY26 indicate significant challenges for the company. The reported net sales of ₹0.76 crores reflect a decline of 2.56% from the previous quarter and a substantial 53.37% decrease compared to the same quarter last year. This trend suggests ongoing difficulties in revenue generation, which has seen a dramatic drop from ₹14.00 crores in FY23 to just ₹3.00 crores in FY25, marking a 78.57% decline over two years. The company also reported a net loss of ₹1.93 crores for the quarter, which is an increase in the loss compared to the previous quarter. The operating margin was notably negative at -243.42%, indicating that the company's cost structure is misaligned with its revenue generation capabilities. Employee costs alone accounted for 227.63% of total revenue, underscoring a critical issue with operational viability. Additionally, the return on equity (ROE) for the latest quarter stood at -12.63%, reflecting persistent losses that erode shareholder value. The overall financial performance indicates a company struggling with fundamental business model challenges, and the lack of positive operating cash flow further complicates its situation. In light of these results, Xelpmoc experienced an adjustment in its evaluation, reflecting the ongoing operational difficulties and the need for significant changes to achieve sustainability. The current financial metrics highlight a pressing need for the company to either accelerate revenue growth or implement substantial cost restructuring to align its expenses with its revenue reality.