Last Mile Enterprises Ltd Faces Sharp Financial Downturn Amidst Revenue and Profit Declines

Quarterly Revenue and Profitability Take a Hit

In the quarter ended December 2025, Last Mile Enterprises recorded net sales of ₹375.02 crores, representing a sharp contraction of 36.8% compared to its average sales over the previous four quarters. This decline is particularly striking given the company’s impressive six-month net sales growth of 1,024.02%, which had previously suggested robust expansion. The sudden reversal signals potential challenges in sustaining top-line momentum amid a volatile market environment.

Profit before tax excluding other income (PBT less OI) also plunged dramatically, falling by 75.5% to just ₹0.87 crore in the latest quarter. This steep drop in core profitability underscores operational pressures that have intensified over recent months. The net profit after tax (PAT) reached a low of ₹2.14 crore, the lowest quarterly figure recorded in recent history, further highlighting the company’s struggle to maintain earnings quality.

Margins and Earnings Per Share Under Pressure

Margins have contracted noticeably, with the company’s earnings per share (EPS) dropping to a quarterly low of ₹0.06. This decline in EPS reflects the combined impact of shrinking revenues and rising costs, which have eroded shareholder value. Additionally, non-operating income now constitutes a substantial 73.39% of the profit before tax, indicating that the company’s core business operations are underperforming and that earnings are increasingly reliant on ancillary income streams.

Liquidity Concerns Emerge

Cash and cash equivalents at the half-year mark have dwindled to ₹0.64 crore, the lowest level recorded in recent periods. This reduction in liquidity raises questions about the company’s ability to fund ongoing operations and meet short-term obligations without resorting to external financing. The liquidity squeeze could constrain strategic initiatives and limit flexibility in a challenging economic backdrop.

Market Performance and Investor Sentiment

Last Mile Enterprises’ stock price closed at ₹6.25, down 0.95% from the previous close of ₹6.31, hovering near its 52-week low of ₹6.00. This contrasts sharply with its 52-week high of ₹28.26, reflecting significant market depreciation over the past year. The stock’s year-to-date return stands at -29.54%, markedly underperforming the Sensex’s modest decline of 2.89% over the same period. Over the past year, the stock has suffered a severe 78.53% loss, while the Sensex gained 8.98%, underscoring the widening gap between the company’s performance and broader market trends.

Financial Trend Shift and Rating Downgrade

The company’s financial trend parameter has shifted from positive to negative, with the score plummeting from +6 to -6 over the last three months. This sharp reversal has prompted a downgrade in the company’s Mojo Grade from Sell to Strong Sell as of 3 December 2025, reflecting heightened caution among market analysts. The Mojo Score currently stands at 17.0, signalling significant risk factors that investors should weigh carefully.

Despite the negative quarterly results, the company’s long-term returns remain noteworthy. Over the past five and ten years, Last Mile Enterprises has delivered cumulative returns of 174.12% and 308.50% respectively, outperforming the Sensex’s 58.83% and 256.84% returns over the same periods. However, the recent underperformance and deteriorating fundamentals suggest that sustaining this historical outperformance may be increasingly challenging.

Sector Context and Competitive Landscape

Operating within the NBFC sector, Last Mile Enterprises faces intense competition and regulatory scrutiny, factors that have contributed to its recent financial strain. The sector itself has experienced mixed performance, with some peers maintaining steady growth while others grapple with asset quality and liquidity issues. The company’s current market capitalisation grade of 4 indicates a mid-tier valuation relative to its sector peers, but the downgrade in financial health may pressure its standing further.

Investor Takeaways and Outlook

Investors should approach Last Mile Enterprises with caution given the recent financial setbacks. The steep decline in quarterly sales and profitability, coupled with shrinking cash reserves and reliance on non-operating income, signals operational challenges that could persist in the near term. While the company’s historical returns are impressive, the current trend reversal and negative outlook warrant a reassessment of risk exposure.

Market participants may want to monitor upcoming quarterly results closely for signs of stabilisation or further deterioration. Additionally, comparing Last Mile Enterprises with its NBFC peers could provide valuable insights into relative performance and potential investment alternatives.

Comparative Returns Highlight Volatility

Examining the stock’s returns relative to the Sensex reveals a volatile trajectory. While the stock outperformed the benchmark over the long term, recent short-term returns have been disappointing. Over the past week, Last Mile Enterprises marginally outperformed the Sensex with a 0.16% gain versus a 1.56% decline in the benchmark. However, over the last month and year-to-date periods, the stock has underperformed significantly, with losses of 17.65% and 29.54% respectively, compared to the Sensex’s declines of 0.97% and 2.89%. This volatility underscores the heightened risk profile investors face when holding this stock in the current environment.

Valuation and Price Movement

The stock’s current price of ₹6.25 is close to its 52-week low of ₹6.00, reflecting diminished investor confidence. The 52-week high of ₹28.26, recorded earlier, highlights the steep correction the stock has undergone. Today’s trading range between ₹6.19 and ₹6.31 indicates limited intraday volatility but continued downward pressure. Given the company’s financial challenges and sector headwinds, the stock may remain under pressure until clear signs of recovery emerge.

Conclusion: A Cautious Approach Recommended

Last Mile Enterprises Ltd’s recent quarterly results mark a clear inflection point, with deteriorating financial metrics and a downgraded rating signalling caution. While the company’s historical performance and long-term returns have been strong, the current negative trend and liquidity concerns suggest that investors should carefully evaluate their positions. Monitoring future earnings releases and sector developments will be critical to assessing whether the company can regain its footing or if further downside lies ahead.

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