The results reveal a company grappling with significant quarter-on-quarter volatility whilst maintaining positive momentum over a longer timeframe. Net sales in Q3 FY26 stood at ₹1.25 crores, declining 29.78% from Q2 FY26's ₹1.78 crores but still representing a 20.19% improvement over Q3 FY25's ₹1.04 crores. This sequential revenue contraction drove the sharp profit decline, though margins remained robust at 32.00%, well above the 14.42% recorded in the year-ago quarter.
The company's operational efficiency shows dramatic swings across quarters, with the operating margin (excluding other income) falling from an exceptional 74.16% in Q2 FY26 to 50.40% in Q3 FY26, though this still represents a substantial improvement from 21.15% in Q3 FY25. Employee costs rose to ₹0.34 crores in Q3 FY26 from ₹0.24 crores in the previous quarter, contributing to margin compression. The tax rate normalised to 25.93% in Q3 FY26 after standing at 25.21% in Q2 FY26.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | Net Profit (₹ Cr) | QoQ Growth | PAT Margin |
|---|---|---|---|---|---|
| Dec'25 | 1.25 | -29.78% | 0.40 | -55.56% | 32.00% |
| Sep'25 | 1.78 | +53.45% | 0.90 | +164.71% | 50.56% |
| Jun'25 | 1.16 | +31.82% | 0.34 | +1600.00% | 29.31% |
| Mar'25 | 0.88 | -15.38% | 0.02 | -86.67% | 2.27% |
| Dec'24 | 1.04 | +6.12% | 0.15 | +15.38% | 14.42% |
| Sep'24 | 0.98 | +6.52% | 0.13 | -35.00% | 13.27% |
| Jun'24 | 0.92 | — | 0.20 | — | 21.74% |
Financial Performance: Volatility Masks Underlying Growth
Anupam Finserv's Q3 FY26 performance reveals a company experiencing significant operational fluctuations whilst maintaining a positive trajectory over longer periods. Net sales of ₹1.25 crores in Q3 FY26 declined sharply from the previous quarter's ₹1.78 crores, representing a 29.78% sequential contraction. This revenue volatility appears to be a recurring pattern, with quarterly sales swinging between ₹0.88 crores and ₹1.78 crores over the past seven quarters.
The year-on-year comparison provides a more encouraging perspective, with Q3 FY26 revenues growing 20.19% from Q3 FY25's ₹1.04 crores. For the nine-month period ending December 2025, the company generated total revenues of ₹4.19 crores compared to ₹2.94 crores in the corresponding period of the previous year, reflecting 42.52% growth. This suggests that whilst quarterly volatility remains a concern, the underlying business trajectory remains positive.
Profitability metrics demonstrate similar patterns of volatility overlaid on improving fundamentals. Net profit of ₹0.40 crores in Q3 FY26 fell 55.56% quarter-on-quarter but surged 166.67% year-on-year. The PAT margin contracted from 50.56% in Q2 FY26 to 32.00% in Q3 FY26, though this remains substantially above the 14.42% recorded in Q3 FY25. For the nine-month period, cumulative net profit stood at ₹1.64 crores versus ₹0.48 crores in the year-ago period, representing 241.67% growth.
Operating profit (PBDIT excluding other income) stood at ₹0.63 crores in Q3 FY26, down from ₹1.32 crores in Q2 FY26 but up from ₹0.22 crores in Q3 FY25. The operating margin of 50.40% in Q3 FY26, whilst lower than the exceptional 74.16% in Q2 FY26, remains robust and well above historical averages. Employee costs rose to ₹0.34 crores in Q3 FY26 from ₹0.24 crores in Q2 FY26, suggesting possible expansion in workforce or compensation adjustments.
The company's interest burden remains minimal at ₹0.02 crores in Q3 FY26, down from ₹0.04 crores in Q2 FY26, reflecting low leverage levels. Depreciation stood at ₹0.07 crores in Q3 FY26, marginally lower than ₹0.08 crores in the previous quarter. The tax rate normalised to 25.93% in Q3 FY26 after being 25.21% in Q2 FY26, indicating stable effective tax rates going forward.
Balance Sheet Quality: Conservative Capital Structure
Anupam Finserv maintains a conservative balance sheet with minimal leverage, a crucial strength for a micro-cap NBFC operating in a competitive environment. As of March 2025, shareholder funds stood at ₹28.45 crores, comprising share capital of ₹18.98 crores and reserves of ₹9.48 crores. The company carries no long-term debt, with current liabilities of ₹3.62 crores representing the primary external funding source.
Balance Sheet Strength
Debt-Free Capital Structure: Anupam Finserv operates with zero long-term debt, providing significant financial flexibility and reducing vulnerability to interest rate fluctuations. The debt-to-equity ratio of 0.11 ranks amongst the lowest in the NBFC peer group, though this conservative approach may limit growth acceleration opportunities.
Fixed assets totalled ₹1.70 crores as of March 2025, down from ₹2.24 crores in the previous year, suggesting limited capital expenditure during FY25. Current assets stood at ₹1.45 crores, marginally higher than ₹1.33 crores in March 2024. The book value per share stands at ₹1.50, with the stock trading at a price-to-book ratio of 1.64x, indicating a moderate premium to net asset value.
Return on equity (ROE) averaged 6.38% over the long term, with the latest ROE at 4.95%, reflecting weak capital efficiency relative to industry standards. This subdued ROE represents a significant concern, as it suggests the company generates limited returns on shareholder capital despite maintaining healthy margins. The five-year sales growth of 18.96% demonstrates reasonable top-line expansion, though EBIT growth of just 3.89% over the same period indicates margin compression or rising costs.
Profitability Concerns: Low Returns on Capital
Whilst Anupam Finserv demonstrates strong operational margins and improving absolute profitability, the company's return metrics raise questions about capital efficiency and long-term value creation. The average ROE of 6.38% ranks well below industry benchmarks, with the latest ROE of 4.95% indicating deteriorating capital productivity. For context, quality financial services companies typically generate ROE in excess of 15%, with top performers exceeding 20%.
Return on capital employed (ROCE) stands at just 2.71%, an alarmingly low figure that suggests the company struggles to generate meaningful returns from its total capital base. This metric is particularly concerning for an NBFC, where efficient capital deployment represents the core competency. The combination of low ROE and ROCE indicates that despite healthy margins, the company either operates with excess capital or faces challenges in scaling its business profitably.
Capital Efficiency Challenge
Weak Return Metrics: With ROE at 4.95% and ROCE at 2.71%, Anupam Finserv significantly underperforms industry standards for capital efficiency. These subdued returns suggest the company may be overcapitalised relative to its business scale, or faces structural challenges in deploying capital at attractive returns. This represents the primary concern limiting the investment case.
The company's quality grade of "Below Average" reflects these fundamental concerns about long-term financial performance. Whilst the business demonstrates positive financial trends in the near term and maintains a conservative balance sheet, the inability to generate adequate returns on capital deployed represents a significant structural weakness. Institutional holdings of just 0.01% further underscore the lack of professional investor confidence in the business model.
Peer Comparison: Valuation Discount Reflects Quality Concerns
Anupam Finserv trades at a significant discount to NBFC peers across most valuation metrics, though this discount appears justified given the company's weak return profile and micro-cap status. At a P/E ratio of 33.11x, the stock trades below the peer group average of approximately 56x, though above the industry P/E of 23x. The price-to-book ratio of 1.64x also sits below the peer average of around 2.90x, reflecting the market's scepticism about the company's ability to generate superior returns on equity.
| Company | P/E (TTM) | P/BV | ROE % | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Anupam Finserv | 33.11 | 1.64 | 6.38% | 0.11 | — |
| Indus Finance | 46.95 | 2.13 | 2.30% | 0.82 | 0.95% |
| Srestha Finvest | NA (Loss Making) | 0.29 | 3.70% | 0.29 | — |
| BSEL ALGO | NA (Loss Making) | 0.10 | 0.00% | 0.00 | — |
| Bridge Securities | 65.92 | 10.63 | 35.02% | 0.00 | — |
| Savani Financial | NA (Loss Making) | 1.38 | 0.79% | 1.31 | — |
The comparison reveals Anupam Finserv occupies a middle position within its micro-cap NBFC peer group. Whilst its ROE of 6.38% exceeds several peers (Indus Finance at 2.30%, Srestha Finvest at 3.70%, Savani Financial at 0.79%), it falls dramatically short of Bridge Securities' exceptional 35.02% ROE. The company's conservative debt-to-equity ratio of 0.11 ranks amongst the lowest in the group, providing financial stability but potentially limiting growth opportunities.
From a valuation perspective, Anupam Finserv's P/E of 33.11x appears reasonable relative to its quality profile, sitting between the extremes of Bridge Securities (65.92x, justified by superior ROE) and the loss-making peers. The P/BV ratio of 1.64x suggests the market assigns a moderate premium to book value, lower than the 2.13x for Indus Finance but substantially higher than distressed peers trading below book value.
Valuation Analysis: Fair Pricing for Below-Average Quality
Anupam Finserv's current valuation of ₹2.46 per share reflects a "Very Expensive" rating according to proprietary metrics, though this assessment must be contextualised within the company's micro-cap status and recent performance volatility. At a P/E ratio of 33.11x trailing twelve-month earnings, the stock trades at a premium to the NBFC industry average of 23x, though below several micro-cap peers. The price-to-book ratio of 1.64x represents a moderate premium to the book value of ₹1.50 per share.
The company's enterprise value metrics paint a mixed picture. EV/EBITDA of 21.76x and EV/EBIT of 26.44x suggest the market assigns a reasonable multiple to operating earnings, though these ratios appear elevated relative to the company's growth profile and return characteristics. EV/Sales of 10.12x indicates investors pay a significant premium for each rupee of revenue, justified only if substantial margin expansion materialises.
The stock's 52-week range of ₹1.25 to ₹3.40 demonstrates significant volatility, with the current price of ₹2.46 sitting 27.65% below the peak and 96.80% above the trough. This wide trading range reflects both the speculative nature of micro-cap stocks and the company's operational volatility. The absence of dividend yield removes a key component of total return for investors, making capital appreciation the sole return driver.
Historical valuation trends show the stock oscillating between "Expensive" and "Very Expensive" ratings since November 2024, suggesting persistent overvaluation relative to fundamentals. Given the company's below-average quality grade, weak return metrics (ROE of 6.38%, ROCE of 2.71%), and operational volatility, the current valuation appears to price in optimistic growth assumptions that may not materialise.
Shareholding Pattern: Stable Promoter Base, Minimal Institutional Interest
Anupam Finserv's shareholding structure reveals a stable promoter base maintaining majority control, though the near-complete absence of institutional investors raises questions about professional investor confidence in the business model. Promoter holdings stood at 51.75% as of December 2025, unchanged from September 2025 but marginally higher than the 51.63% recorded in June 2025 and March 2025. This stable promoter stake provides governance continuity and alignment of interests with minority shareholders.
| Quarter | Promoter % | QoQ Change | FII % | MF % | Other DII % | Non-Inst % |
|---|---|---|---|---|---|---|
| Dec'25 | 51.75% | 0.00% | 0.00% | 0.00% | 0.01% | 48.24% |
| Sep'25 | 51.75% | +0.12% | 0.00% | 0.00% | 0.01% | 48.24% |
| Jun'25 | 51.63% | 0.00% | 0.00% | 0.00% | 0.01% | 48.35% |
| Mar'25 | 51.63% | 0.00% | 0.00% | 0.00% | 0.01% | 48.35% |
The promoter group comprises five key individuals, with Pravin Nanji Gala holding the largest stake at 21.75%, followed by Nirmala Pravinchandra Gala at 11.86%, Nanji Bhuralal Gala at 8.69%, Siddharth Pravinchandra Gala at 7.73%, and Dhrumil Pravinchandra Gala at 1.71%. Importantly, no promoter shares are pledged, eliminating concerns about forced selling or governance issues arising from financial stress at the promoter level.
The institutional investor landscape presents a concerning picture, with foreign institutional investors (FIIs) and mutual funds holding precisely zero stake in the company. Other domestic institutional investors (DIIs) maintain a negligible 0.01% holding, unchanged across recent quarters. This complete absence of institutional participation suggests professional investors find the company's business model, scale, or governance unattractive, or simply too small to merit research coverage and investment.
Non-institutional investors hold 48.24% of the equity, representing primarily retail shareholders and non-institutional entities. The marginal decline in non-institutional holdings from 48.35% in June 2025 to 48.24% in December 2025 suggests modest retail selling, though the changes remain too small to indicate a significant shift in sentiment. The lack of institutional validation represents a key risk factor for potential investors, as it suggests limited research coverage and price discovery mechanisms.
Stock Performance: Strong Long-Term Gains Offset by Recent Volatility
Anupam Finserv's stock price performance demonstrates impressive long-term returns marred by significant volatility and recent underperformance. Over a one-year period, the stock has delivered 41.38% returns, substantially outperforming the Sensex's 10.36% gain and generating alpha of 31.02 percentage points. This outperformance extends to the five-year timeframe, with the stock returning 237.03% versus the Sensex's 63.40%, representing alpha of 173.63 percentage points.
| Period | Stock Return | Sensex Return | Alpha | Outperformance |
|---|---|---|---|---|
| 1 Week | 9.82% | 0.46% | +9.36% | ✓ |
| 1 Month | -13.07% | 0.75% | -13.82% | ✗ |
| 3 Month | 14.95% | 0.39% | +14.56% | ✓ |
| 6 Month | 9.82% | 4.46% | +5.36% | ✓ |
| YTD | -5.38% | -1.20% | -4.18% | ✗ |
| 1 Year | 41.38% | 10.36% | +31.02% | ✓ |
| 3 Years | 30.85% | 38.76% | -7.91% | ✗ |
| 5 Years | 237.03% | 63.40% | +173.63% | ✓ |
However, shorter-term performance reveals concerning trends. Year-to-date, the stock has declined 5.38% compared to the Sensex's 1.20% fall, generating negative alpha of 4.18 percentage points. The one-month return of -13.07% versus the Sensex's 0.75% gain highlights recent selling pressure, with alpha of -13.82 percentage points indicating significant underperformance. The one-week surge of 9.82% suggests some recovery momentum, though this follows the sharp monthly decline.
The stock's risk profile warrants careful consideration, with an adjusted beta of 1.50 indicating 50% higher volatility than the broader market. This high beta classification means the stock tends to amplify market movements in both directions, contributing to the wide 52-week trading range of ₹1.25 to ₹3.40. Annualised volatility stands at 70.92%, dramatically higher than the Sensex's 11.52%, classifying the stock as "HIGH RISK HIGH RETURN".
Risk-adjusted returns paint a nuanced picture. Whilst the stock's absolute one-year return of 41.38% appears attractive, the risk-adjusted return of 0.58 compares unfavourably to the Sensex's 0.90, suggesting investors receive insufficient compensation for the elevated volatility assumed. The positive Sharpe ratio indicates returns exceed the risk-free rate, though the magnitude remains modest given the substantial volatility.
Technical indicators present mixed signals. The stock currently trades below all key moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), suggesting weak near-term momentum. The overall technical trend classification of "Mildly Bullish" as of February 1, 2026, represents a downgrade from the previous "Bullish" trend, indicating deteriorating technical momentum. Immediate support sits at the 52-week low of ₹1.25, whilst resistance emerges at the 20-day moving average around ₹2.44.
Investment Thesis: Limited Upside Given Quality Concerns
Anupam Finserv's investment case rests on a foundation of improving near-term financial trends offset by structural concerns about capital efficiency and business quality. The company's proprietary Mojo Score of 47/100 places it firmly in "SELL" territory, reflecting the balance between positive operational momentum and fundamental weaknesses. This score represents a decline from the "HOLD" rating assigned on February 1, 2026, indicating deteriorating overall attractiveness.
The Mojo 4 Dots analysis reveals a company with mixed attributes across key parameters. Near-term drivers appear positive, supported by a "Positive" quarterly financial trend and "Mildly Bullish" technicals. However, the "Below Average" quality grade represents a significant structural weakness, reflecting the company's inability to generate adequate returns on capital despite healthy operating margins. The "Very Expensive" valuation assessment suggests current pricing fails to offer an adequate margin of safety given these quality concerns.
The primary limitation on the Mojo Score stems from weak long-term fundamental strength, with an average ROE of 6.38% falling dramatically short of quality benchmarks. This subdued return profile indicates the company either operates with excess capital relative to business opportunities or faces structural challenges in deploying capital at attractive returns. For an NBFC, where capital efficiency represents the core competency, this weakness proves particularly concerning.
Key Strengths & Risk Factors
✓ KEY STRENGTHS
- Strong YoY Growth: Net profit surged 166.67% YoY in Q3 FY26, with nine-month profit growing 241.67%, demonstrating improving operational performance over longer timeframes.
- Healthy Margins: PAT margin of 32.00% and operating margin of 50.40% in Q3 FY26 remain robust, indicating strong pricing power and operational efficiency.
- Debt-Free Balance Sheet: Zero long-term debt and minimal interest burden provide financial flexibility and reduce vulnerability to interest rate fluctuations.
- Stable Promoter Holdings: Promoter stake of 51.75% with no pledging demonstrates commitment and governance stability.
- Impressive Long-Term Returns: Five-year stock return of 237.03% and one-year return of 41.38% demonstrate substantial wealth creation for long-term holders.
- Positive Financial Trend: Latest six-month PAT higher than previous period, indicating improving near-term momentum.
- Conservative Leverage: Debt-to-equity ratio of 0.11 ranks amongst the lowest in the peer group, providing financial stability.
⚠ KEY CONCERNS
- Weak Return Metrics: ROE of 6.38% and ROCE of 2.71% indicate poor capital efficiency and inability to generate adequate returns on shareholder funds.
- Severe QoQ Volatility: Net profit fell 55.56% QoQ and revenue declined 29.78% QoQ in Q3 FY26, demonstrating unpredictable quarterly performance.
- Micro-Cap Liquidity: Market capitalisation of just ₹46.68 crores limits liquidity and increases vulnerability to volatile price swings.
- Zero Institutional Interest: Complete absence of FII and mutual fund holdings suggests professional investors find the business unattractive.
- Expensive Valuation: P/E of 33.11x and "Very Expensive" rating indicate limited margin of safety at current price levels.
- High Volatility: Beta of 1.50 and annualised volatility of 70.92% classify the stock as extremely risky relative to broader market.
- Below-Average Quality: Quality grade assessment reflects concerns about long-term sustainability of financial performance.
Outlook: What to Watch
POSITIVE CATALYSTS
- Sustained Revenue Growth: Consistent QoQ revenue expansion above 15-20% would indicate business momentum and reduce volatility concerns.
- Margin Stability: Maintaining PAT margins above 30% across multiple quarters would demonstrate sustainable profitability.
- ROE Improvement: Achieving ROE above 12-15% would signal better capital deployment and justify current valuation multiples.
- Institutional Entry: Any mutual fund or FII stake acquisition would provide validation and improve liquidity.
- Business Diversification: Expansion into complementary financial services could drive scale and improve return metrics.
RED FLAGS
- Continued QoQ Volatility: Further sharp quarterly profit swings would undermine confidence in business predictability.
- Margin Compression: Sustained decline in operating or PAT margins below 40% and 25% respectively would indicate competitive pressure.
- Deteriorating ROE: Further decline in ROE below 4% would signal worsening capital efficiency and value destruction.
- Promoter Stake Reduction: Any material decline in promoter holdings would raise governance concerns.
- Rising Leverage: Increase in debt levels without corresponding improvement in returns would stress the balance sheet.
The Verdict: Avoid Despite Near-Term Momentum
Score: 47/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst near-term financial trends appear positive with strong YoY growth, the combination of weak return metrics (ROE 6.38%, ROCE 2.71%), expensive valuation (P/E 33.11x), severe quarterly volatility, and complete absence of institutional validation creates an unfavourable risk-reward profile. The stock's high beta of 1.50 and volatility of 70.92% compound these concerns.
For Existing Holders: Consider reducing positions on any strength towards the ₹2.60-2.80 range. Whilst long-term returns have been impressive (237% over five years), the deteriorating Mojo Score, below-average quality grade, and expensive valuation suggest limited upside from current levels. The sharp 55.56% QoQ profit decline in Q3 FY26 highlights the unpredictability of quarterly performance.
Fair Value Estimate: ₹1.80-2.00 (18-27% downside from current levels), based on normalised earnings, peer comparison, and quality-adjusted multiples. Current pricing appears to discount optimistic growth assumptions that may not materialise given structural capital efficiency challenges.
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 does not guarantee future results, and all investments carry risk of loss.
