Are Zodiac Clothing Company Ltd latest results good or bad?

Zodiac Clothing Company Ltd's latest financial results for the quarter ended September 2025 reflect a challenging operational environment. The company reported net sales of ₹36.51 crores, which represents a quarter-on-quarter decline of 6.62% and a year-on-year contraction of 14.80%. This decline is particularly concerning as the September quarter typically sees stronger sales due to seasonal demand for winter collections in the garment export sector. The company also posted a net loss of ₹11.82 crores, worsening sequentially by 26.82% from the previous quarter's loss of ₹9.32 crores. The operating margin, excluding other income, was recorded at -17.89%, marking the lowest performance in the past seven quarters. This indicates significant challenges in managing costs and achieving profitability. Zodiac Clothing's operational difficulties are compounded by rising interest costs, which reached ₹2.66 crores, the highest in recent quarters. The persistent negative operating leverage suggests that the company is struggling to achieve economies of scale, further exacerbating its financial distress. Investor confidence appears to have diminished, as evidenced by the absence of institutional investors and stagnant promoter holding at 71.40%. The company's financial metrics indicate a structural weakness, with return on equity at 0.0% and return on capital employed at -14.32%, highlighting chronic inefficiencies in capital utilization. Overall, the financial data indicates that Zodiac Clothing Company Ltd is facing significant operational challenges, with declining revenues, persistent losses, and negative margins, leading to an adjustment in its evaluation. The outlook remains uncertain, with the company needing substantial improvements in its operational execution and financial health to regain investor confidence and stabilize its performance.