The second quarter results reveal a company grappling with severe operational challenges. While revenue growth of 22.88% year-on-year appears encouraging on the surface, the sequential 60.46% decline in net sales from Q1 FY26's ₹577.36 crores highlights extreme volatility in the business. More concerning is the collapse in profitability metrics across the board, with operating margins compressing to a mere 0.42% and profit after tax margins shrinking to an alarming 0.03%.
The coal trading sector's inherent cyclicality and margin pressures are clearly evident in Anmol India's quarterly performance, raising questions about the sustainability of earnings and the company's ability to navigate challenging market conditions. With promoter shareholding at 38.28%—of which the entire stake is pledged—and virtually no institutional participation, the company faces additional credibility concerns in the eyes of sophisticated investors.
| Quarter | Sep'25 | Jun'25 | Mar'25 | Dec'24 | Sep'24 | Jun'24 | Mar'24 |
|---|---|---|---|---|---|---|---|
| Net Sales (₹ Cr) | 228.29 | 577.36 | 314.23 | 253.32 | 185.78 | 520.93 | 402.88 |
| QoQ Growth | -60.46% | +83.74% | +24.04% | +36.35% | -64.34% | +29.30% | — |
| Net Profit (₹ Cr) | 0.07 | 5.72 | 1.60 | 0.38 | 1.01 | 4.00 | 3.91 |
| Operating Margin | 0.42% | 1.76% | 1.42% | 0.88% | 1.42% | 1.26% | 0.60% |
| PAT Margin | 0.03% | 0.99% | 0.51% | 0.15% | 0.54% | 0.77% | 0.97% |
Financial Performance: A Quarter of Severe Margin Compression
Anmol India's Q2 FY26 financial performance tells a story of operational distress masked by topline growth. Net sales in Q2 FY26 stood at ₹228.29 crores, representing a 22.88% increase year-on-year from ₹185.78 crores in Q2 FY25. However, the sequential picture is far more troubling—revenue collapsed 60.46% from the preceding quarter's ₹577.36 crores, indicating extreme quarterly volatility that is characteristic of commodity trading businesses operating with thin margins.
The company's operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) plummeted to just ₹0.97 crores in Q2 FY26, marking the lowest level in the past eight quarters. This translated to an operating margin of merely 0.42%, down sharply from 1.76% in Q1 FY26 and representing the weakest profitability in recent memory. The margin compression was driven by a combination of factors including elevated interest costs of ₹3.27 crores and an inability to pass on cost pressures to customers in a competitive coal trading environment.
Profit before tax came in at a minuscule ₹0.09 crores, supported primarily by other income of ₹2.57 crores. Alarmingly, non-operating income constituted 2,855.56% of profit before tax, highlighting the company's inability to generate sustainable operating profits from its core business activities. After accounting for tax of ₹0.02 crores at an effective rate of 22.22%, net profit stood at just ₹0.07 crores—a staggering 98.78% decline from Q1 FY26's ₹5.72 crores and 93.07% lower than Q2 FY25's ₹1.01 crores.
The quality of earnings remains questionable, with the company's earnings per share (EPS) for Q2 FY26 falling to just ₹0.01—the lowest recorded in recent quarters. The dramatic quarter-to-quarter swings in both revenue and profitability underscore the challenges inherent in the coal trading business, where margins are wafer-thin and subject to volatile commodity prices, foreign exchange fluctuations, and intense competition.
Operational Challenges: Deteriorating Efficiency Metrics
Beyond the headline numbers, Anmol India's operational metrics paint a concerning picture of deteriorating business fundamentals. The company's operating profit to net sales ratio hit a nadir at 0.42% in Q2 FY26, reflecting severe pressure on pricing power and operational efficiency. The operating profit to interest coverage ratio collapsed to just 0.30 times, indicating that the company's core operations are barely generating enough to service its debt obligations—a red flag for financial sustainability.
On a more positive note, the company has historically demonstrated strong return on capital employed (ROCE), averaging 32.98% over the long term, though the latest quarterly ROCE has moderated to 8.14%. Similarly, return on equity (ROE) averaged a healthy 21.00% historically, with the latest figure at 8.10%. These metrics suggest that during favourable market conditions, Anmol India can generate attractive returns on invested capital. However, the current quarter's performance indicates that the company is operating in a challenging environment where these returns are under significant pressure.
The balance sheet reveals moderate leverage with a debt-to-equity ratio of 0.76 and long-term debt of ₹40.83 crores as of March 2025. While not excessively leveraged compared to industry peers, the debt burden becomes concerning when viewed against the company's current profitability levels. Interest costs of ₹3.27 crores in Q2 FY26 consumed virtually all of the operating profit, leaving little room for error and highlighting the company's vulnerability to any further deterioration in operating margins.
⚠️ Critical Operational Concerns
Operating Profit to Interest Coverage: At just 0.30 times in Q2 FY26, the company's core operations are barely generating enough to service debt obligations—the lowest level recorded in recent quarters.
Non-Operating Income Dependency: Other income constituted 2,855.56% of profit before tax, indicating the company is not generating sustainable profits from its core coal trading business.
Margin Sustainability: Operating margins of 0.42% and PAT margins of 0.03% are unsustainably low and raise questions about the viability of the business model in current market conditions.
Industry Context: Coal Trading Sector Headwinds
The coal import and supply industry in India operates in a highly competitive and margin-constrained environment. Companies in this sector typically function as intermediaries, importing coal from international markets (primarily Indonesia, Australia, and South Africa) and supplying it to domestic power plants, cement manufacturers, and industrial consumers. The business is characterised by high working capital requirements, thin operating margins typically in the 1-2% range, and significant exposure to commodity price volatility and foreign exchange fluctuations.
Anmol India's Q2 FY26 performance must be viewed against this backdrop of structural industry challenges. The company's 0.42% operating margin falls well below the sector norm, suggesting either aggressive pricing to maintain market share or operational inefficiencies that are eroding profitability. The extreme revenue volatility—with sales swinging from ₹577.36 crores in Q1 FY26 to ₹228.29 crores in Q2 FY26—is indicative of lumpy order flows and the absence of long-term supply contracts that could provide revenue stability.
The broader miscellaneous sector, in which Anmol India is classified, has faced headwinds over the past year, declining 22.30%. However, Anmol India's 45.41% decline over the same period significantly underperforms the sector by 23.11 percentage points, indicating company-specific challenges beyond general sector weakness. This underperformance has been accompanied by high volatility, with the stock exhibiting a beta of 1.50, meaning it moves 50% more than the broader market—amplifying both gains and losses.
Peer Comparison: Valuation Attractive but Quality Concerns Persist
When compared to peers in the miscellaneous sector, Anmol India presents an interesting valuation paradox. The company trades at a price-to-earnings ratio of 10.55x based on trailing twelve-month earnings, significantly below the peer average of approximately 30x and well below sector leaders like Yash Chemex (57.33x) and Alkosign (22.04x). Similarly, its price-to-book value of 0.86x is notably lower than peers such as Yash Chemex (2.56x) and Alkosign (2.52x), suggesting the market is pricing in significant concerns about future profitability and asset quality.
| Company | P/E (TTM) | P/BV | ROE % | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Anmol India | 10.55 | 0.86 | 21.00% | 0.76 | — |
| Yash Chemex | 57.33 | 2.56 | 7.89% | 0.29 | — |
| Sundaram Multi | NA (Loss Making) | 1.03 | 2.10% | 0.13 | — |
| Alkosign | 22.04 | 2.52 | 3.43% | 0.28 | — |
| Mohini Health | 14.65 | — | — | — | — |
However, Anmol India does stand out positively on return on equity, with a historical average of 21.00% that comfortably exceeds peers like Yash Chemex (7.89%), Alkosign (3.43%), and Sundaram Multi (2.10%). This suggests that during normal operating conditions, the company has been efficient in generating returns for shareholders. The challenge lies in the sustainability and consistency of these returns, given the recent quarterly performance and the inherent volatility of the coal trading business.
The company's debt-to-equity ratio of 0.76 is higher than most peers, indicating greater financial leverage. While this can amplify returns during good times, it also increases risk during periods of operational stress—precisely the situation Anmol India finds itself in currently. The absence of dividend payments and zero institutional holdings further distinguish Anmol India from higher-quality peers, reflecting concerns about governance, transparency, and long-term business sustainability.
Valuation Analysis: Deep Discount Reflects Quality Concerns
Anmol India's current valuation metrics present a classic value trap scenario—the stock appears statistically cheap on traditional metrics, but the underlying business quality and earnings sustainability raise significant red flags. At a P/E ratio of 10.55x, the stock trades at a substantial 68% discount to the sector average P/E of approximately 33x. The price-to-book value of 0.86x implies the market values the company's net assets at a 14% discount, suggesting scepticism about the company's ability to generate returns above its cost of capital.
The company's enterprise value to EBITDA multiple of 8.94x and EV to EBIT of 9.19x appear reasonable on the surface. However, these metrics are calculated based on trailing twelve-month performance, which includes stronger quarters. Given the sharp deterioration in Q2 FY26, forward-looking multiples are likely to expand significantly unless the company can demonstrate a rapid turnaround in profitability.
From a technical perspective, the stock has been in a prolonged downtrend, declining 48.40% from its 52-week high of ₹30.29 to the current level of ₹15.63. The stock trades below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—indicating sustained selling pressure and a lack of buying interest. The overall technical trend is classified as "mildly bearish," with multiple technical indicators flashing warning signals including bearish MACD and RSI patterns on monthly timeframes.
Valuation Dashboard
P/E Ratio (TTM): 10.55x (68% discount to sector)
Price-to-Book: 0.86x (Trading below book value)
EV/EBITDA: 8.94x
Dividend Yield: Nil (No dividends paid)
Overall Assessment: Attractive valuation offset by deteriorating fundamentals and quality concerns
Shareholding Pattern: Promoter Pledging Raises Red Flags
Anmol India's shareholding pattern reveals concerning trends that amplify the investment risks. Promoter holding stands at 38.28% as of September 2025, having increased from 33.66% in March 2025 through a 4.62 percentage point jump in June 2025. While increasing promoter stake might typically be viewed positively, the critical concern is that 100% of the promoter holding is pledged—a major red flag indicating potential financial stress at the promoter level.
| Quarter | Sep'25 | Jun'25 | Mar'25 | Dec'24 | Sep'24 |
|---|---|---|---|---|---|
| Promoter % | 38.28% | 38.28% | 33.66% | 33.66% | 33.66% |
| QoQ Change | 0.00% | +4.62% | 0.00% | 0.00% | — |
| FII % | 0.00% | 0.00% | 0.01% | 0.04% | 0.00% |
| Mutual Fund % | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional % | 49.80% | 49.80% | 42.90% | 42.87% | 42.92% |
The complete absence of institutional investors—zero holdings from foreign institutional investors, mutual funds, insurance companies, and other domestic institutional investors—is highly unusual and signals a lack of confidence from sophisticated investors who typically conduct thorough due diligence. The marginal FII holding that existed in December 2024 (0.04%) and March 2025 (0.01%) has been completely liquidated, suggesting institutional investors have actively exited their positions.
Non-institutional holdings have increased from 42.90% in March 2025 to 49.80% currently, likely comprising retail investors and non-institutional entities. This shift in ownership structure towards less sophisticated investors, combined with 100% promoter pledging and zero institutional participation, creates a precarious situation where the stock lacks the support of quality long-term investors who could provide stability during periods of volatility.
Stock Performance: Severe Underperformance Across All Timeframes
Anmol India's stock price performance has been dismal across virtually all timeframes, with the stock significantly underperforming both the broader market and its sector peers. Over the past year, the stock has plummeted 45.41%, generating negative alpha of 53.91 percentage points compared to the Sensex's 8.50% gain. The year-to-date performance is equally troubling, with the stock down 39.65% compared to the Sensex's 7.72% gain, resulting in negative alpha of 47.37 percentage points.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -4.52% | +1.15% | -5.67% |
| 1 Month | +3.10% | +2.61% | +0.49% |
| 3 Months | -0.06% | +4.44% | -4.50% |
| 6 Months | -16.73% | +3.50% | -20.23% |
| Year-to-Date | -39.65% | +7.72% | -47.37% |
| 1 Year | -45.41% | +8.50% | -53.91% |
| 2 Years | -74.09% | +29.63% | -103.72% |
| 3 Years | -50.43% | +36.59% | -87.02% |
The medium-term picture is even more concerning, with the stock down 74.09% over two years and 50.43% over three years, dramatically underperforming the Sensex's gains of 29.63% and 36.59% respectively over the same periods. The only bright spot in the performance data is the five-year return of 174.21%, which significantly outperformed the Sensex's 92.89% gain with positive alpha of 81.32 percentage points. However, this long-term outperformance appears to be entirely attributable to a strong period several years ago, with the stock in sustained decline since then.
From a risk-adjusted perspective, Anmol India falls into the "high risk, low return" category—the worst possible combination for investors. The stock's one-year volatility of 47.73% is nearly four times the Sensex's volatility of 12.26%, while simultaneously delivering negative absolute returns. The risk-adjusted return of -0.95 and negative Sharpe ratio indicate that investors are being penalised rather than rewarded for taking on the stock's elevated risk profile.
"With a beta of 1.50, Anmol India amplifies market movements by 50%—but in the current environment, this high beta has worked entirely against shareholders, magnifying losses rather than gains."
Investment Thesis: Multiple Red Flags Outweigh Valuation Appeal
Anmol India's investment proposition is fraught with contradictions. On one hand, the company trades at attractive valuation multiples with a P/E of 10.55x and price-to-book of 0.86x, both significantly below sector averages. The company has also demonstrated the ability to generate strong returns on equity (21.00% average) and return on capital employed (32.98% average) over longer timeframes. These metrics suggest that during favourable market conditions, the business model can be profitable.
However, the weight of evidence points overwhelmingly towards significant fundamental challenges that make the stock unsuitable for most investors. The Q2 FY26 results revealed severe operational distress with operating margins collapsing to 0.42% and net profit plummeting to just ₹0.07 crores. The company's dependence on non-operating income—which constituted over 2,800% of profit before tax—indicates an inability to generate sustainable profits from core operations. The operating profit to interest coverage ratio of just 0.30 times raises serious questions about the company's ability to service its debt obligations if conditions worsen further.
From a quality perspective, Anmol India scores poorly across multiple dimensions. The company carries a "below average" quality grade, with institutional holdings at zero and 100% of promoter shares pledged—both major red flags. The extreme quarterly revenue volatility, swinging from ₹577.36 crores to ₹228.29 crores, indicates a lack of business stability and the absence of long-term contracts that could provide earnings visibility.
Mojo Investment Parameters
Valuation: Attractive (P/E: 10.55x, P/BV: 0.86x)
Quality Grade: Below Average (Zero institutional holdings, 100% promoter pledge)
Financial Trend: Negative (Q2 FY26 marked by severe margin compression)
Technical Trend: Mildly Bearish (Below all moving averages, negative momentum)
Overall Score: 20/100 (STRONG SELL category)
Key Strengths & Risk Factors
KEY STRENGTHS ✓
- Attractive Valuation: P/E of 10.55x represents 68% discount to sector average, providing margin of safety
- Strong Historical ROE: Average return on equity of 21.00% demonstrates ability to generate shareholder returns during normal conditions
- Robust ROCE: Average return on capital employed of 32.98% indicates efficient capital allocation historically
- Revenue Growth: 22.88% year-on-year sales growth in Q2 FY26 shows market share gains
- Long-term Track Record: Five-year sales CAGR of 16.74% demonstrates growth trajectory
KEY CONCERNS ⚠
- Profit Collapse: Net profit plummeted 98.78% QoQ to just ₹0.07 crores, raising sustainability concerns
- Margin Compression: Operating margins at 0.42% and PAT margins at 0.03% are unsustainably low
- Weak Interest Coverage: Operating profit to interest ratio of 0.30x indicates inability to service debt from operations
- 100% Promoter Pledging: Entire promoter stake pledged signals potential financial stress
- Zero Institutional Holdings: Complete absence of FII/MF participation reflects quality concerns
- Extreme Volatility: Revenue swings of 60%+ quarter-to-quarter indicate business instability
- Technical Weakness: Stock below all moving averages with sustained selling pressure
Outlook: Critical Monitoring Points Ahead
Looking ahead, Anmol India faces a challenging path to recovery. The coal trading business remains inherently volatile and margin-constrained, with limited pricing power and exposure to commodity price fluctuations and foreign exchange risks. For the company to stage a meaningful turnaround, it would need to demonstrate consistent quarter-on-quarter improvement in operating margins, stabilisation of revenue, and a return to sustainable profitability levels.
POSITIVE CATALYSTS
- Stabilisation of operating margins above 1.5% for two consecutive quarters
- Operating profit to interest coverage improving above 2.0x
- Reduction in promoter pledging below 25%
- Entry of institutional investors (FII/MF participation)
- Consistent quarterly revenue above ₹400 crores with reduced volatility
RED FLAGS TO WATCH
- Further decline in operating margins below 0.4%
- Operating profit to interest coverage falling below 0.25x
- Any increase in promoter pledging above current 100% (invocation risk)
- Continued absence of institutional participation for more than two quarters
- Working capital deterioration leading to cash flow stress
- Stock breaking below ₹14.04 (52-week low) on high volumes
The Q3 FY26 results, expected in early 2026, will be critical in determining whether Q2 FY26 represented a temporary aberration or the beginning of a more sustained period of operational distress. Investors should monitor margin trends, interest coverage ratios, and any developments on the promoter pledging front. Until the company can demonstrate a clear path to sustainable profitability and address the governance concerns reflected in 100% promoter pledging and zero institutional participation, the investment case remains highly speculative.
The Verdict: High-Risk Value Trap—Exit Recommended
Score: 20/100
For Fresh Investors: Avoid entirely. Despite attractive valuation multiples, the combination of collapsing profitability, 100% promoter pledging, zero institutional participation, and unsustainably low margins creates an unacceptable risk-reward profile. The stock exhibits classic value trap characteristics where statistical cheapness masks fundamental deterioration.
For Existing Holders: Consider exiting positions on any technical bounce towards ₹16-17 levels. The Q2 FY26 results revealed severe operational distress that goes beyond normal quarterly volatility. With operating margins at 0.42%, interest coverage at 0.30x, and net profit at just ₹0.07 crores, the business model's sustainability is in serious question. The absence of institutional investors and 100% promoter pledging amplify downside risks.
Fair Value Estimate: ₹12-13 (21-23% downside from current levels) based on normalised earnings and elevated risk premium for quality concerns, governance issues, and business volatility.
Note— ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results, and all investments carry risk of loss.
