Whalesbook
📉 The Financial Deep Dive
The Numbers:
Harrisons Malayalam Limited has announced its unaudited financial results for the quarter and nine months ended December 31, 2025, revealing a stark contrast in performance. For the third quarter (Q3 FY26), revenue from operations saw a marginal decline of 0.81% year-on-year (YoY) to ₹14,109.42 lakhs from ₹14,224.56 lakhs in Q3 FY25. Profit Before Tax (PBT) and Profit After Tax (PAT) experienced a significant drop of 31.85% YoY, falling to ₹763.53 lakhs from ₹1,120.11 lakhs. This translated to a diluted Earnings Per Share (EPS) of ₹4.14 for the quarter, down from ₹6.07 in the prior year period.
However, the nine-month period (Nine Months FY26) demonstrated robust growth. Revenue from operations rose by 3.91% YoY to ₹39,195.60 lakhs. More impressively, PBT and PAT more than doubled, surging by 106.27% YoY to ₹2,001.89 lakhs from ₹970.81 lakhs. Consequently, the diluted EPS for the nine months stood at ₹10.85, a substantial increase from ₹5.26 in the comparable period last year.
The Quality:
The sharp decline in Q3 profitability was primarily attributed to a substantial increase in the cost of materials consumed (+26.75% YoY) and other operational expenses (+10.09% YoY), coupled with lower other income for the quarter. Despite these pressures, employee benefits expense was reduced, and tax expenses remained nil due to unabsorbed depreciation and carry-forward losses, allowing for deferred tax assets to be recognized.
The significant surge in nine-month PAT, despite the weaker Q3, was driven by a considerable increase in other income year-to-date and stronger performance in the 'Others' segment. Notably, while the rubber segment's profit before interest for the nine months decreased from ₹2,838.39 lakhs to ₹1,997.84 lakhs, the overall nine-month PBT growth indicates that the 'Others' segment and substantial 'other income' were the primary drivers of this impressive year-to-date profitability.
The Grill:
A critical point of attention is the company's balance sheet as of December 31, 2025, where current liabilities exceeded current assets. While the management expressed confidence in meeting financial obligations through expected cash flows and credit facilities, this situation warrants close monitoring by investors. Furthermore, the company faces a significant legal risk with a civil suit filed by the Government of Kerala challenging the ownership of land in the Wayanad district, which is currently pending resolution. An incremental liability of ₹104 lakhs for employee benefits due to the notification of new Labour Codes has also been noted.
The tea segment reported a loss before interest of ₹(113.29) lakhs for Q3 FY26, a reversal from a profit of ₹195.25 lakhs in Q3 FY25, adversely impacting quarterly results.