HLV Ltd Reports Flat Quarterly Performance Amid Margin Pressures

Quarterly Revenue Growth Hits New High

HLV Ltd recorded net sales of ₹60.90 crores in the December 2025 quarter, marking the highest quarterly revenue in its recent history. This figure represents a notable improvement compared to previous quarters, contributing to an improved financial trend score that moved from -14 to -3 over the last three months. The shift from a negative to a flat financial trend indicates that the company has managed to halt the steep revenue declines seen earlier in the year.

However, while top-line growth is encouraging, it is important to contextualise this within the broader sector performance. The Hotels & Resorts industry has been gradually recovering from pandemic-induced disruptions, with many peers reporting steady revenue gains. HLV’s ability to reach a new revenue peak suggests some success in capitalising on this recovery, although the pace remains cautious.

Profitability Under Pressure Despite Revenue Gains

Contrasting the revenue growth, HLV’s profitability metrics have deteriorated in the same quarter. Profit Before Tax less Other Income (PBT less OI) fell by 17.11% to ₹5.96 crores, while Profit After Tax (PAT) declined by 14.5% to ₹8.78 crores. These contractions highlight margin compression, likely driven by rising operational costs or subdued pricing power in a competitive market.

The margin squeeze is a critical concern for investors, as it undermines the company’s ability to convert sales growth into earnings. This dynamic has contributed to the company’s current Mojo Grade of Strong Sell, an upgrade from Sell on 1 August 2025, reflecting a cautious stance despite some stabilisation in financial trends.

Stock Price and Market Performance

HLV’s stock price closed at ₹8.90 on 13 February 2026, down 1.66% from the previous close of ₹9.05. The stock has traded within a 52-week range of ₹7.77 to ₹16.02, indicating significant volatility over the past year. Intraday trading on the day saw a high of ₹9.23 and a low of ₹8.61, reflecting investor uncertainty amid mixed financial signals.

When compared to the broader market, HLV’s returns have lagged considerably. Over the past year, the stock has declined by 38.79%, while the Sensex gained 9.85%. The three-year and ten-year returns further illustrate this underperformance, with HLV down 18.50% and 47.65% respectively, against Sensex gains of 37.89% and 264.02%. Even the five-year return of 47.11% falls short of the Sensex’s 62.34% appreciation.

Financial Trend Improvement: From Negative to Flat

The company’s financial trend score, a composite indicator of recent performance, has improved markedly from -14 to -3 over the last quarter. This shift from a negative to a flat trend suggests that while HLV has not yet returned to growth, it has arrested the decline that characterised earlier periods. This is a positive signal for stakeholders, indicating potential for a turnaround if operational efficiencies and market conditions improve.

Nonetheless, the flat trend also implies that the company remains vulnerable to external shocks and internal inefficiencies. The Hotels & Resorts sector continues to face challenges such as fluctuating travel demand, rising input costs, and evolving consumer preferences, all of which could impact HLV’s ability to sustain momentum.

Sector and Industry Context

HLV operates within the Hotels & Resorts industry, a sector that has been gradually recovering from the severe disruptions caused by the COVID-19 pandemic. While many competitors have reported robust rebounds in occupancy rates and average daily rates, HLV’s mixed results highlight the uneven nature of this recovery. The company’s highest-ever quarterly sales demonstrate some success in capturing market share, but the margin contraction signals ongoing operational challenges.

Investors should also consider the company’s market capitalisation grade of 4, indicating a relatively modest size within the sector. This can limit access to capital and economies of scale, placing HLV at a competitive disadvantage compared to larger peers.

Outlook and Investor Considerations

HLV Ltd’s recent quarterly results present a mixed picture. The company’s ability to achieve its highest quarterly net sales is a positive development, signalling some resilience in a recovering sector. However, the decline in profitability metrics and the flat financial trend score suggest that operational challenges remain significant.

Investors should weigh these factors carefully, considering the company’s current Strong Sell Mojo Grade and the broader market context. The stock’s underperformance relative to the Sensex over multiple time horizons underscores the risks involved. Potential catalysts for improvement include cost control measures, strategic repositioning, and a sustained recovery in travel demand.

Given the competitive pressures and margin constraints, HLV’s path to a sustained turnaround may be gradual. Market participants are advised to monitor upcoming quarterly results closely for signs of margin stabilisation or expansion, as well as any strategic initiatives announced by management.

Comparative Performance Summary

To summarise, HLV Ltd’s key performance indicators for the December 2025 quarter are as follows:

• Net Sales: ₹60.90 crores (highest quarterly figure)
• PBT less Other Income: ₹5.96 crores, down 17.11%
• Profit After Tax: ₹8.78 crores, down 14.5%
• Financial Trend Score: Improved from -14 to -3 (negative to flat)
• Mojo Grade: Upgraded from Sell to Strong Sell on 1 August 2025
• Stock Price: ₹8.90 (closing on 13 Feb 2026), down 1.66% on the day
• 52-week Range: ₹7.77 to ₹16.02
• Relative Returns vs Sensex (1Y): -38.79% vs +9.85%

These figures highlight the company’s current challenges and the cautious outlook from market analysts.

Conclusion

HLV Ltd’s December 2025 quarterly results reflect a company at a crossroads. While revenue growth has stabilised and reached new highs, profitability pressures and a flat financial trend score temper optimism. The Strong Sell rating and underwhelming stock performance relative to the Sensex reinforce the need for investors to exercise caution.

Going forward, the company’s ability to improve margins and capitalise on sector recovery will be critical. Stakeholders should watch for operational improvements and strategic clarity in forthcoming quarters to reassess the investment thesis.

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