Ansal Housing Q3 FY26: Losses Deepen Amid Revenue Decline and Operational Struggles

The quarter was characterised by a steep 45.59% sequential decline in net sales to ₹66.09 crores—the lowest quarterly revenue in recent periods—alongside contracting margins and mounting operational challenges. With the stock in a confirmed bearish technical trend and the company's proprietary Mojo score at a dismal 17 out of 100, Ansal Housing faces significant headwinds as it navigates a difficult operating environment in the real estate sector.

The company's financial performance has been on a downward trajectory throughout FY26, with Q3 marking the weakest quarter in terms of revenue generation. The sequential contraction in sales from ₹121.47 crores in Q2 FY26 to ₹66.09 crores represents a dramatic 45.59% decline, whilst the year-on-year comparison shows a 25.00% drop from ₹88.12 crores in Q3 FY25. This revenue compression, coupled with a shift to loss-making operations, underscores the structural challenges facing the micro-cap realty player.

Financial Performance: Revenue Volatility and Margin Instability

Ansal Housing's Q3 FY26 financial performance reveals deep-seated operational challenges. Net sales of ₹66.09 crores represented the lowest quarterly revenue in the trailing twelve-month period, declining 45.59% sequentially from Q2 FY26's ₹121.47 crores and 25.00% year-on-year from Q3 FY25's ₹88.12 crores. This dramatic revenue contraction reflects the lumpy nature of real estate revenue recognition and suggests significant project execution challenges or delayed completions.

Operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) stood at ₹7.42 crores, translating to an operating margin of 11.23%—a notable improvement from Q2 FY26's 4.19% but still below the 16.29% achieved in Q1 FY26. The quarter-on-quarter margin expansion of 7.04 percentage points, despite the revenue decline, indicates some success in cost management, though the absolute operating profit fell from ₹5.09 crores in the previous quarter.

The company's profit trajectory turned sharply negative in Q3 FY26. After accounting for depreciation of ₹9.56 crores and minimal interest costs of ₹0.19 crores, the company posted a loss before tax of ₹2.93 crores. Following a tax credit of ₹1.00 crore (representing an effective tax rate of 34.13%), the net loss for the quarter stood at ₹1.93 crores. This compares unfavourably with a net profit of ₹1.33 crores in Q3 FY25, marking a 245.11% year-on-year deterioration.

The quality of earnings remains concerning. Employee costs rose to ₹4.71 crores from ₹4.49 crores in Q2 FY26, representing 7.13% of net sales—a proportion that has been climbing as revenue contracts. Depreciation charges of ₹9.56 crores exceeded the operating profit, highlighting the capital-intensive nature of the business and the burden of ageing assets. Other income contributed a modest ₹0.44 crores, down from ₹1.15 crores in the previous quarter, indicating limited non-operating income cushion.

Operational Challenges: Weak Returns and High Leverage

Ansal Housing's operational metrics paint a troubling picture of capital efficiency and profitability. The company's return on capital employed (ROCE) averaged just 4.33% over the past five years, with the latest half-yearly figure plummeting to a negative 0.04%—the lowest on record. This dismal capital efficiency indicates that the company is destroying value rather than creating it, earning far below its cost of capital. The return on equity (ROE) tells a similarly distressing story, averaging a meagre 0.91% over five years, with the latest annual figure at 2.61%. These anaemic returns reflect fundamental operational weaknesses and poor asset utilisation.

The company's balance sheet reveals significant leverage concerns. As of March 2025, shareholder funds stood at ₹139.12 crores, comprising share capital of ₹69.64 crores and reserves of ₹69.49 crores. However, the company carries long-term debt of ₹88.49 crores, down from ₹111.63 crores a year earlier, alongside massive current liabilities of ₹1,269.26 crores. The average net debt to equity ratio of 2.16 times indicates high financial leverage, whilst the average debt to EBITDA ratio of 61.93 times suggests the company would take over six decades to repay its debt from current earnings—an untenable position.

Fixed assets have been declining steadily, falling from ₹18.22 crores in March 2024 to ₹15.21 crores in March 2025, reflecting depreciation charges outpacing capital expenditure. Current assets stood at ₹1,444.87 crores as of March 2025, down from ₹1,711.32 crores a year earlier, suggesting working capital compression. The company's book value per share of ₹19.98 provides some downside cushion, with the stock trading at a price-to-book ratio of just 0.48x, though this discount reflects market scepticism about asset quality and future profitability.

The Realty Sector Context: Navigating a Challenging Environment

Ansal Housing operates in India's highly cyclical and capital-intensive real estate sector, which has seen significant consolidation in recent years favouring larger, better-capitalised players. The micro-cap company, with a market capitalisation of just ₹63.00 crores, faces structural disadvantages compared to larger peers in terms of access to capital, brand recognition, and project execution capabilities. The company's promoter holding stands at 24.99%, unchanged over the past five quarters, indicating stable but limited promoter commitment with no meaningful increase in skin in the game.

The broader real estate sector has delivered modest returns of 1.46% over the past year, which Ansal Housing has significantly underperformed with a negative 25.50% return during the same period—a 26.96 percentage point underperformance. This divergence suggests company-specific challenges beyond sector headwinds. The stock's high beta of 1.27 indicates greater volatility than the broader market, with risk-adjusted returns deeply negative at -0.50 compared to the Sensex's positive 0.89.

Institutional participation in Ansal Housing remains virtually non-existent, with FII and mutual fund holdings at 0.00% and insurance holdings similarly absent. Only 0.01% of shares are held by other domestic institutional investors. This complete lack of institutional interest reflects the company's micro-cap status, poor financial performance, and limited liquidity. The non-institutional shareholding of 75.00% has remained static, suggesting a largely retail investor base with limited trading activity.

Peer Comparison: Lagging on Quality Metrics

When benchmarked against peers in the realty sector, Ansal Housing's fundamental weaknesses become starkly apparent. The company's return on equity of 0.91% ranks at the bottom of its peer group, significantly trailing competitors like Vivid Mercantile (17.66% ROE) and Prerna Infrastructure (7.60% ROE). This massive gap in profitability metrics underscores Ansal Housing's operational inefficiencies and capital allocation challenges.

Ansal Housing's price-to-earnings ratio of 18.32x appears reasonable compared to some peers, but this metric is misleading given the company's deteriorating profitability and recent losses. The price-to-book ratio of 0.48x represents a significant discount to peers, with Vivid Mercantile trading at 1.38x and Skyline Millars at 3.40x. However, this valuation discount reflects justified market concerns about asset quality, execution capability, and the sustainability of the business model. The company's high debt-to-equity ratio of 2.16x stands in stark contrast to several peers operating with negative net debt positions, highlighting Ansal Housing's financial vulnerability.

Valuation Analysis: Deep Discount Reflects Fundamental Concerns

Ansal Housing's current valuation metrics present a mixed picture, with significant discounts offset by deteriorating fundamentals. Trading at ₹9.03 as of February 12, 2026, the stock commands a trailing twelve-month P/E ratio of 18.32x—well below the industry average of 38x. However, this apparent valuation discount must be viewed in context of the company's negative financial trend, recent quarterly losses, and structural challenges. The price-to-book ratio of 0.48x suggests the market values the company's assets at less than half their book value, reflecting scepticism about asset quality and future earning power.

The enterprise value metrics paint an even more concerning picture. With an EV/EBITDA multiple of 11.81x and an EV/Sales ratio of 0.86x, the company trades at a meaningful discount to historical norms. However, the negative EV/EBIT ratio of -98.48x underscores the company's current inability to generate sustainable operating profits. The EV/Capital Employed ratio of 0.83x suggests the market values the entire enterprise below the capital employed in the business—a clear vote of no confidence in management's ability to generate adequate returns.

The stock's valuation grade has fluctuated between "Fair" and "Attractive" in recent months, currently sitting at "Fair" as of October 2025. However, this assessment appears overly generous given the company's Q3 FY26 results and deteriorating trend. The stock has declined 37.68% from its 52-week high of ₹14.49, whilst trading 18.50% above its 52-week low of ₹7.62. The lack of dividend payments (last dividend of ₹0.60 per share paid in September 2016) eliminates any income component from the investment proposition.

Shareholding Pattern: Static Structure, Zero Institutional Interest

The shareholding pattern of Ansal Housing has remained remarkably static over the past five quarters, with no meaningful changes across any investor category. Promoter holding has stayed constant at 24.99% from December 2024 through December 2025, indicating neither increased commitment nor any reduction. The promoter group, led by the Ansal family including late Deepak Ansal (4.61%), Ansal Development Pvt Ltd (4.60%), and Ansal Construction Private Limited (4.60%), maintains a relatively modest stake for a promoter group, with no pledging of shares—one of the few positive signals in an otherwise challenging picture.

The complete absence of foreign institutional investors (0.00%), mutual funds (0.00%), and insurance companies (0.00%) speaks volumes about institutional perception of the company's prospects. Only 0.01% is held by other domestic institutional investors, leaving a massive 75.00% in the hands of non-institutional investors—predominantly retail shareholders. This investor composition creates significant liquidity challenges and limits the stock's ability to attract serious capital. The presence of just two mutual funds in the shareholder registry, with negligible holdings, underscores the lack of institutional conviction.

Stock Performance: Severe Underperformance Across Timeframes

Ansal Housing's stock performance has been dismal across most relevant timeframes, with particularly acute underperformance over the past year. The stock has declined 25.50% over the past twelve months, whilst the Sensex gained 10.18%—resulting in a negative alpha of 35.68 percentage points. This massive underperformance reflects the market's loss of confidence in the company's ability to execute its business plan and return to sustainable profitability. Year-to-date, the stock is down 8.88% compared to the Sensex's 1.52% decline, indicating continued weakness in 2026.

The medium-term picture is equally concerning, with the stock down 9.70% over three months and 9.06% over six months, consistently underperforming the benchmark. Over two years, the stock has plummeted 46.15% whilst the Sensex rose 18.09%, representing a staggering 64.24 percentage point underperformance. The only bright spot appears in the three-year timeframe, where the stock gained 125.19% compared to the Sensex's 38.30% rise, though this largely reflects a recovery from extremely depressed levels rather than sustained operational improvement.

The stock's technical position reinforces the bearish fundamental outlook. Trading in a confirmed bearish trend since January 22, 2026, the stock is below all key moving averages—5-day (₹8.82), 20-day (₹8.66), 50-day (₹9.28), 100-day (₹9.54), and 200-day (₹10.21). Technical indicators including MACD, RSI, Bollinger Bands, and KST all flash bearish or mildly bearish signals on weekly and monthly timeframes. With high volatility of 50.67% and a negative risk-adjusted return of -0.50, the stock falls squarely into the "high risk, low return" category—an unattractive combination for investors.

Investment Thesis: Multiple Red Flags Outweigh Limited Positives

The investment thesis for Ansal Housing is overwhelmingly negative, with the company's proprietary Mojo score of 17 out of 100 placing it firmly in "STRONG SELL" territory. The score reflects a confluence of negative factors across all four key assessment parameters: valuation (risky), quality (below average), financial trend (negative), and technicals (bearish). The company's quality grade of "Below Average" is based on weak long-term financial performance, with average ROCE of just 4.33% and ROE of 0.91%—figures that indicate chronic value destruction.

The financial trend turned negative in Q3 FY26, driven by a 90.60% decline in profit before tax (excluding other income) compared to the previous four-quarter average, alongside the lowest quarterly net sales at ₹66.09 crores. The half-yearly ROCE hitting a record low of -0.04% signals that the business is actively destroying capital. The technical trend, bearish since late January 2026, confirms market participants' negative sentiment, with the stock trading below all key moving averages and momentum indicators pointing downward.

Key Strengths & Risk Factors

Outlook: What Lies Ahead

The path forward for Ansal Housing appears fraught with challenges. The company needs to demonstrate consistent revenue generation, return to profitability, and improve capital efficiency to regain investor confidence. However, given the structural issues—high leverage, weak returns, volatile revenue, and limited institutional backing—a meaningful turnaround appears unlikely in the near to medium term. The micro-cap status and illiquidity further constrain the company's ability to raise capital or execute strategic initiatives.