Arigato Universe Q3 Revenue Halved, Debt Surges Amidst Inventory Build-up

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AuthorAbhay Singh|Published at:
Arigato Universe Q3 Revenue Halved, Debt Surges Amidst Inventory Build-up
Overview

Arigato Universe Limited (formerly Saboo Brothers) reported a dismal Q3 FY26, with total income plummeting 51% YoY to ₹6.71 Cr. Net profit slumped 24.7% to ₹0.46 Cr, and EPS fell 25% to ₹0.75. The company saw a significant 50% QoQ revenue contraction, while total liabilities more than doubled due to a sharp rise in financial liabilities. Inventory levels also surged dramatically, raising concerns.

📉 The Financial Deep Dive

The Numbers: Q3 FY26 standalone results for Arigato Universe Limited (formerly Saboo Brothers Limited) showed a steep decline. Total Income fell 51.0% YoY to ₹6.71 Cr (₹671.48 Lakhs) from ₹13.69 Cr (₹1,368.69 Lakhs) in Q3 FY25. Profit Before Tax (PBT) decreased by 5.7% YoY to ₹0.68 Cr (₹68.06 Lakhs) from ₹0.72 Cr (₹72.20 Lakhs), despite a wider PBT margin of 10.13% vs 5.26% in the year-ago quarter. Net Profit saw a 24.7% YoY drop to ₹0.46 Cr (₹45.88 Lakhs) from ₹0.61 Cr (₹60.94 Lakhs). Earnings Per Share (EPS) declined 25.0% to ₹0.75 from ₹1.00. Sequentially (QoQ), Total Income dropped 50.1% to ₹6.71 Cr from ₹13.45 Cr, and Net Profit fell 24.7% to ₹0.46 Cr from ₹0.61 Cr, with EPS down 25.0%.

The Quality: While Net Profit Margins expanded to 6.85% in Q3 FY26 from 4.45% in Q3 FY25, this improvement was overshadowed by the drastic fall in top-line revenue. Expenses reduced by 53.5% YoY and QoQ, contributing to the margin improvement, but tax expenses nearly doubled (up 97.0% YoY and QoQ) to ₹0.22 Cr. The balance sheet reveals a concerning trend: Total Assets jumped from ₹17.44 Cr to ₹28.94 Cr, driven by a massive increase in Current Assets, specifically inventories which ballooned from ₹2.44 Cr to ₹17.63 Cr. Concurrently, Total Liabilities more than doubled from ₹10.18 Cr to ₹20.53 Cr, primarily due to a surge in financial liabilities, both non-current and current, totaling ₹20.31 Cr. This indicates a significant increase in leverage.

The Grill: No concall transcript provided.

🚩 Risks & Outlook

Specific Risks: The primary risk lies in the sharp decline in revenue and the substantial inventory build-up, which could signal weakening demand or potential obsolescence. The doubling of liabilities, largely financial, increases the company's debt burden and financial risk. The sharp increase in tax expense warrants further scrutiny to understand its drivers.

The Forward View: Investors should closely monitor inventory turnover and sales performance in the upcoming quarters to gauge demand recovery and the impact of the increased debt. The company's ability to manage its increased liabilities and control costs will be crucial.

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