Are Nexome Cap. Mkt. latest results good or bad?

Nexome Capital Markets' latest financial results for Q2 FY26 reveal a complex operational landscape characterized by significant revenue volatility and mixed profitability metrics. The company reported a net profit of ₹1.00 crore, reflecting a notable year-on-year growth of 300.00% compared to ₹0.25 crore in Q2 FY25. However, this figure represents a sequential decline of 21.26% from the previous quarter's profit of ₹1.27 crore, indicating challenges in sustaining profitability.
Net sales for the quarter totaled ₹8.32 crore, which is up 31.23% year-on-year but down sharply by 50.18% from ₹16.70 crore in Q1 FY26. This drastic sequential drop underscores the inconsistency in revenue generation, a recurring issue for Nexome attributed to its reliance on merchant banking and securities trading, sectors that are highly sensitive to market conditions.

The company's PAT margin improved to 12.02% from 3.94% in the same quarter last year, driven by enhanced operational efficiency and favorable other income contributions. However, the reliance on other income, which accounted for a significant portion of operating profit, raises concerns about the sustainability of this profitability.

Return on equity (ROE) remains low at 0.95%, highlighting capital inefficiency, while the return on capital employed (ROCE) is negative at -1.48%, indicating value destruction with deployed capital. This performance places Nexome among the weaker entities in the non-banking financial company (NBFC) sector.

The company has experienced an adjustment in its evaluation, reflecting the disconnect between its market valuation and underlying financial performance. The absence of institutional interest further complicates the investment landscape, as it suggests skepticism regarding the company's business model and growth prospects.

Overall, Nexome Capital Markets' results depict a firm grappling with fundamental operational challenges, characterized by erratic revenue patterns and low returns on equity, which raise questions about its long-term viability and strategic direction.