Starlineps Enter Q4 FY26 Results (BSE: 540492)
Signal: Loss widened
The read
Q4FY26 is a mixed bag: revenue doubled and operating margin turned positive for the first time in five quarters (+2262bps to 5.71%), but a massive ₹529 Lakh one-time write-off of capital work-in-progress turned the quarter into a net loss. The balance sheet was transformed by a ₹13,345 Lakh rights issue — moving from net debt to net cash of ₹12,335 Lakh. The core trading business is recovering volume-wise, but margins are still thin and the exceptional write-off raises questions about past capital allocation.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹28.02 Cr | 101.6% | 28.0% |
| EBIT | ₹2.73 Cr | 299.8% | |
| Net profit | ₹-2.06 Cr | -133.7% | |
| EPS | ₹-0.05 | -66.7% | |
| EBIT margin | 5.71% |
P&L walk
Top-line doubled YoY but core operating profit (before exceptionals) of ₹272.84 Lakh is modest on a revenue of ₹2,802 Lakh; the exceptional write-off of ₹529.36 Lakh of capital work-in-progress completely swamped the quarter, producing a net loss of ₹205.70 Lakh.
Segments
Single segment — diamond & jewellery trading. The entire business is one segment; no segment diversification.
Key positives
- Revenue doubled YoY to ₹2,802 Lakh (+101.6%), the highest quarterly revenue in at least 5 quarters.
- Operating margin (before exceptional items) turned positive to 5.71% after four consecutive quarters of contraction — +2262bps YoY.
- Strong operating leverage: fixed costs (employee + depreciation) grew ~2% while revenue surged 102%.
- Balance sheet transformed: ₹13,345 Lakh raised via rights issue; net cash of ₹12,335 Lakh vs net debt last year.
- Gross margin improved to 10.7% from 0.8% a year ago — first expansion in five quarters.
Key concerns
- Net loss of ₹205.70 Lakh due to a huge exceptional write-off of ₹529.36 Lakh (CWIP) — this one-time charge was not expected.
- Core operating profit (before exceptionals) of ₹272.84 Lakh is only 9.7% of revenue — still thin for the trading business.
- Receivable days stood at ~239 days based on Q4 revenue — high working capital intensity.
- Cash flow from operations deeply negative at -₹1,723.68 Lakh, driven by trade receivable build-up of ₹1,317 Lakh.
Research and educational content only. Not investment advice.