The quarter marked a pivotal inflection point for the proptech specialist, formerly known as Majesco Limited, as revenue momentum accelerated sharply on both sequential and annual bases. The 20.61% quarter-on-quarter growth represented the strongest sequential expansion in over two years, driven by increased client engagement and project wins in the company's core real estate technology solutions business. Operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) jumped to ₹21.25 crores, reflecting robust operational leverage as the company scaled its revenue base whilst maintaining disciplined cost control.
Financial Performance: Revenue Surge Drives Margin Expansion
Aurum Proptech's Q2 FY26 financial performance demonstrated clear evidence of operational turnaround, with net sales of ₹82.50 crores marking a significant acceleration from ₹68.40 crores in Q1 FY26 and ₹63.96 crores in Q2 FY25. The 28.99% year-on-year growth represented the company's strongest annual revenue expansion since Q2 FY24, when sales grew 46.94%. On a sequential basis, the 20.61% quarter-on-quarter increase reflected improving business momentum and successful execution of client projects.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Operating Margin | Net Loss (₹ Cr) |
|---|---|---|---|---|---|
| Sep'25 | 82.50 | 20.61% | 28.99% | 25.76% | -8.56 |
| Jun'25 | 68.40 | -2.85% | 5.41% | 19.46% | -9.42 |
| Mar'25 | 70.41 | 9.03% | 17.72% | 22.18% | -7.20 |
| Dec'24 | 64.58 | 0.97% | 12.69% | 18.02% | -6.60 |
| Sep'24 | 63.96 | -1.43% | 21.21% | 17.06% | -9.55 |
| Jun'24 | 64.89 | 8.49% | 46.94% | 12.08% | -10.70 |
The margin profile improved substantially, with operating profit margin (excluding other income) expanding to 25.76% from 17.06% in Q2 FY25 and 19.46% in Q1 FY26. This 870 basis point year-on-year improvement reflected the company's ability to leverage its fixed cost base as revenue scaled, alongside improved project mix and pricing discipline. Operating profit before depreciation, interest, and tax (PBDIT excluding OI) reached ₹21.25 crores, the highest quarterly level recorded in the available data series.
However, the company remained unprofitable at the net level, posting a consolidated net loss of ₹8.56 crores for Q2 FY26. Whilst this represented a 10.37% improvement from the ₹9.55 crore loss in Q2 FY25, the sequential comparison showed a marginal deterioration from the ₹9.42 crore loss in Q1 FY26. The persistent bottom-line losses stemmed primarily from high depreciation charges of ₹25.55 crores and interest expenses of ₹7.82 crores, which together consumed the entire operating profit and more.
Employee costs remained well-controlled at ₹20.18 crores in Q2 FY26, virtually flat compared to ₹20.01 crores in Q2 FY25, demonstrating operational efficiency as the company grew revenue by nearly 29% without proportional increases in headcount expenses. This disciplined cost management contributed significantly to the margin expansion witnessed during the quarter.
Operational Challenges: Heavy Depreciation Burden Weighs on Profitability
Whilst Aurum Proptech's operational performance showed encouraging improvement, the company's path to sustainable profitability remains constrained by a substantial depreciation burden that continues to erode operating gains. Depreciation charges of ₹25.55 crores in Q2 FY26 represented 30.97% of net sales, reflecting the capital-intensive nature of the company's technology infrastructure and past investments in platform development.
⚠️ Critical Concern: Profitability Pathway Unclear
The company's depreciation burden of ₹25.55 crores per quarter, combined with interest costs of ₹7.82 crores, creates a combined fixed charge of ₹33.37 crores that must be covered before achieving net profitability. At current operating profit levels of ₹21.25 crores (excluding other income), the company requires either a 57% increase in operating profit or a significant reduction in depreciation and interest charges to reach breakeven.
Interest expenses of ₹7.82 crores in Q2 FY26 reflected the company's debt burden, which stood at ₹76.49 crores in long-term borrowings as of March 2025. The debt-to-equity ratio of 0.48 indicated moderate leverage, though the company's negative cash flows and persistent losses raised questions about debt serviceability over the medium term. The interest coverage ratio remained deeply negative, as operating profit before interest and tax was insufficient to cover interest obligations.
Balance sheet quality presented a mixed picture. Total shareholder funds stood at ₹274.35 crores as of March 2025, providing a reasonable equity cushion. However, accumulated losses continued to erode reserves, with reserves and surplus declining from ₹229.92 crores in FY25. Current assets of ₹91.11 crores exceeded current liabilities of ₹178.55 crores, indicating working capital pressure that could constrain operational flexibility.
The company's cash flow profile remained challenging, with operating cash flow of ₹27.00 crores for FY25 representing a positive development after years of cash burn. However, this improvement came primarily from working capital adjustments rather than core profitability, raising sustainability concerns. Cash flow from investing activities consumed ₹43.00 crores in FY25, reflecting continued capital expenditure requirements, whilst financing activities provided ₹18.00 crores through additional borrowings.
Industry Context: Proptech Sector Faces Consolidation Pressures
Aurum Proptech operates in the specialised proptech (property technology) segment of India's broader IT services industry, providing technology solutions for real estate developers, brokers, and property management companies. The sector has witnessed increased digitisation momentum post-pandemic, with real estate firms accelerating adoption of CRM systems, project management platforms, and customer engagement tools. However, the market remains highly fragmented with intense competition from both specialised proptech players and larger IT services firms expanding into vertical-specific solutions.
The company's revenue growth of 28.99% year-on-year in Q2 FY26 compared favourably to the broader IT services sector, which has experienced subdued growth amid global economic uncertainties and client budget constraints. This outperformance suggested Aurum's niche positioning in proptech provided some insulation from broader sectoral headwinds, though the company's micro-cap status and limited scale posed challenges in competing for larger enterprise deals.
Competitive Positioning: Niche Focus Provides Differentiation
Aurum Proptech's specialisation in real estate technology solutions offers differentiation in a crowded IT services market. The company's domain expertise and established client relationships in the property sector create switching costs and provide a defensible competitive moat. However, limited scale and persistent losses constrain the company's ability to invest in product development and sales expansion compared to better-capitalised competitors.
Peer Comparison: Valuation Premium Unjustified by Fundamentals
A comparison with peers in the IT software sector revealed Aurum Proptech's valuation anomaly. Trading at a price-to-book value ratio of 4.33x, the company commanded a premium to most profitable peers despite posting consistent losses. This valuation disconnect reflected either market optimism about the company's turnaround prospects or insufficient price discovery in this thinly traded micro-cap stock.
| Company | P/E (TTM) | P/BV | ROE | Debt/Equity | Dividend Yield |
|---|---|---|---|---|---|
| Aurum Proptech | NA (Loss Making) | 4.33 | -12.40% | 0.75 | 0.00% |
| IZMO | 27.57 | 3.91 | 14.19% | -0.05 | 0.00% |
| InfoBeans Tech | 21.38 | 3.50 | 11.69% | -0.43 | 0.21% |
| Ivalue Infosolutions | 18.15 | 3.39 | 18.66% | -0.27 | 0.00% |
| Dynacons Systems | 15.99 | 5.15 | 31.34% | 0.15 | 0.05% |
Aurum's negative return on equity of -12.40% contrasted sharply with profitable peers posting ROEs ranging from 11.69% to 31.34%. The company's debt-to-equity ratio of 0.75 was higher than most peers, who operated with negative net debt positions (cash exceeding debt). Most concerning, Aurum remained the only loss-making company in this peer set, yet traded at a premium price-to-book multiple, suggesting valuation risk.
Valuation Analysis: Premium Pricing for Unproven Turnaround
At the current market price of ₹178.05, Aurum Proptech's market capitalisation of ₹1,198 crores implied an enterprise value-to-sales multiple of 5.55x based on trailing twelve-month revenue of approximately ₹263 crores. This represented a substantial premium for a loss-making micro-cap company, particularly when compared to profitable IT services peers trading at lower multiples.
The company's price-to-book value ratio of 4.66x appeared elevated given the negative return on equity and uncertain profitability trajectory. With book value per share at ₹49.62, the current market price of ₹178.05 implied investors were paying nearly 3.6 times book value for a company that has consistently destroyed shareholder value through accumulated losses. The EV/EBITDA multiple of 28.82x further underscored the rich valuation, particularly considering the sustainability questions around operating profitability.
The stock's 52-week range of ₹148.10 to ₹264.00 reflected significant volatility, with the current price 32.56% below the high and 20.22% above the low. This wide trading range underscored the uncertainty surrounding the company's turnaround prospects and the speculative nature of the investment proposition. Technical indicators showed a mildly bearish trend, with the stock trading below its 100-day and 200-day moving averages, suggesting momentum had turned negative despite the recent 7.55% single-day rally.
Shareholding Pattern: Promoter Reduction Raises Questions
Shareholding pattern changes revealed concerning trends, with promoter holding declining to 47.04% in September 2025 from 49.91% in December 2024, representing a reduction of 287 basis points over three quarters. The most significant decline occurred between June and September 2025, when promoters reduced their stake by 277 basis points. Whilst promoters maintained a majority position and no shares were pledged, the steady reduction in holding raised questions about management confidence in the company's near-term prospects.
| Quarter | Promoter | QoQ Change | FII | Non-Institutional |
|---|---|---|---|---|
| Sep'25 | 47.04% | -2.77% | 0.36% | 52.60% |
| Jun'25 | 49.81% | -0.03% | 0.38% | 49.81% |
| Mar'25 | 49.89% | -0.01% | 0.38% | 49.72% |
| Dec'24 | 49.91% | — | 0.38% | 49.70% |
Institutional participation remained minimal, with FII holding at just 0.36% and no mutual fund or insurance company presence. The absence of institutional investors reflected the company's micro-cap status, persistent losses, and limited analyst coverage. Non-institutional holdings increased to 52.60% in September 2025, absorbing the promoter stake reduction and suggesting retail investor accumulation, though this often indicates speculative interest rather than informed institutional conviction.
Stock Performance: Significant Underperformance Across Timeframes
Aurum Proptech's stock performance painted a picture of substantial underperformance across most relevant timeframes. Year-to-date, the stock declined 24.63%, massively underperforming the Sensex's 6.82% gain by 31.45 percentage points. The one-year return of -13.99% similarly lagged the benchmark's 2.41% gain by 16.40 percentage points, placing the stock in the bottom quartile of performers.
| Period | Stock Return | Sensex Return | Alpha | Quartile |
|---|---|---|---|---|
| 1 Day | 7.55% | 1.04% | +6.51% | — |
| 1 Week | 7.55% | 1.58% | +5.97% | — |
| 1 Month | 4.43% | 1.32% | +3.11% | — |
| 3 Months | -8.08% | 1.01% | -9.09% | 3rd Quartile |
| 6 Months | 2.53% | 8.34% | -5.81% | — |
| YTD | -24.63% | 6.82% | -31.45% | 4th Quartile |
| 1 Year | -13.99% | 2.41% | -16.40% | 4th Quartile |
| 2 Years | 37.86% | 26.15% | +11.71% | 2nd Quartile |
| 3 Years | 40.70% | 44.11% | -3.41% | 4th Quartile |
The longer-term picture showed mixed results. Over two years, the stock delivered 37.86% returns, outperforming the Sensex by 11.71 percentage points and placing in the second quartile of performers. However, three-year returns of 40.70% underperformed the benchmark's 44.11%, indicating the stock's outperformance was concentrated in specific periods rather than sustained.
Technical analysis indicated a mildly bearish trend, with the stock trading at ₹178.05 below its 100-day moving average of ₹185.75 and 200-day moving average of ₹189.18. The stock's beta of 1.50 classified it as high beta, meaning it typically moves 50% more than the broader market in either direction. Combined with volatility of 45.75%, this created a high-risk profile that demanded premium returns to justify the risk – returns that have been conspicuously absent over the past year.
Investment Thesis: Speculative Turnaround Play With Significant Risks
The investment case for Aurum Proptech rested entirely on the company's ability to sustain the operational momentum demonstrated in Q2 FY26 and translate improving margins into eventual bottom-line profitability. The 28.99% revenue growth and 870 basis point margin expansion provided encouraging evidence that the business turnaround was gaining traction. However, multiple structural challenges clouded the outlook and created substantial execution risk.
The company's proprietary Mojo Score of 37 out of 100 placed it firmly in "SELL" territory, reflecting the combination of negative financial trends, bearish technical momentum, and elevated valuation. The quality grade of "Average" acknowledged some positive operational developments whilst recognising persistent profitability challenges and weak return on equity.
"Aurum Proptech's Q2 results showcased operational improvement, but the path from operating profit to net profitability remains blocked by a ₹33 crore quarterly burden of depreciation and interest charges."
Key Strengths & Risk Factors
✅ KEY STRENGTHS
- Revenue Momentum: 28.99% YoY growth and 20.61% QoQ growth demonstrate strong demand
- Margin Expansion: Operating margin improved 870 bps YoY to 25.76%, highest in recent quarters
- Niche Positioning: Specialised proptech focus provides differentiation in competitive IT services market
- Cost Discipline: Employee costs flat YoY despite 29% revenue growth shows operational leverage
- No Promoter Pledging: Zero pledged shares indicates no immediate financial stress
- Improving Cash Flow: Operating cash flow turned positive at ₹27 crores in FY25
⚠️ KEY CONCERNS
- Persistent Losses: Consecutive quarterly losses with no clear path to profitability
- Heavy Depreciation Burden: ₹25.55 crore quarterly depreciation consumes all operating profit
- Declining Promoter Stake: 287 bps reduction in promoter holding over three quarters raises confidence questions
- Elevated Valuation: 4.66x P/BV for loss-making company represents significant premium
- Zero Institutional Interest: No mutual fund or insurance holdings reflects lack of institutional conviction
- Weak Returns: -24.63% YTD and -13.99% one-year returns place stock in bottom quartile
- High Volatility: Beta of 1.50 and volatility of 45.75% create high-risk profile
Outlook: What to Watch
🟢 POSITIVE CATALYSTS
- Sustained Revenue Growth: Continuation of 20%+ quarterly growth rates
- Margin Stability: Maintaining 25%+ operating margins for multiple quarters
- Depreciation Decline: Reduction in depreciation burden as older assets fully depreciate
- Debt Reduction: Paydown of ₹76.49 crore long-term debt to reduce interest burden
- Institutional Entry: Mutual fund or insurance company stake building
🔴 RED FLAGS TO MONITOR
- Revenue Deceleration: Slowdown in QoQ or YoY growth rates
- Margin Compression: Operating margins falling below 20%
- Further Promoter Reduction: Continued decline in promoter shareholding
- Cash Flow Deterioration: Return to negative operating cash flow
- Working Capital Stress: Widening gap between current assets and liabilities
The Verdict: Avoid This Speculative Turnaround
Mojo Score: 37/100
For Fresh Investors: Avoid initiating positions. Whilst Q2 FY26 results showed encouraging operational improvement with 28.99% revenue growth and 25.76% operating margins, the company remains deeply unprofitable with no clear pathway to net profitability. The ₹33 crore quarterly burden of depreciation and interest charges, declining promoter stake, and elevated valuation of 4.66x book value for a loss-making micro-cap create an unfavourable risk-reward profile. Better opportunities exist in profitable IT services companies trading at reasonable valuations.
For Existing Holders: Consider reducing positions on any further rallies. The stock's -24.63% year-to-date performance and placement in the bottom quartile of returns reflect fundamental weaknesses that Q2's operational improvement has not resolved. The 7.55% single-day rally following results provides an opportunity to exit at relatively better levels. Only aggressive investors willing to tolerate 45.75% volatility and accept substantial risk of permanent capital loss should maintain exposure.
Fair Value Estimate: ₹125 (30% downside from current levels) – Based on 2.5x book value for a loss-making micro-cap company with uncertain profitability trajectory, down from current 4.66x P/BV.
⚠️ 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.
