The Hyderabad-based ferro silicon manufacturer, which has been struggling with operational challenges for several years, continues to face severe headwinds. With net sales of just ₹0.54 crores in Q3 FY26—a catastrophic 97.60% decline from ₹22.46 crores in Q3 FY24—the company's manufacturing operations appear to be virtually dormant. The negative shareholder equity of ₹-206.47 crores (based on book value per share of ₹-125.87) underscores the magnitude of accumulated losses that have eroded the company's capital base.
Despite the sequential 86.21% increase in revenue from ₹0.29 crores in Q2 FY26, the company's operating losses remain substantial, with operating profit before depreciation, interest, and tax (excluding other income) at ₹-5.23 crores. The company's survival appears dependent on other income of ₹4.80 crores, which partially offset operational losses during the quarter.
| Quarter | Net Sales (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | PAT Margin |
|---|---|---|---|---|
| Dec'25 | 0.54 | +86.21% | -2.13 | -394.44% |
| Sep'25 | 0.29 | +20.83% | -3.00 | -1034.48% |
| Jun'25 | 0.24 | -95.24% | -2.15 | -895.83% |
| Mar'25 | 5.04 | -77.56% | -74.78 | -1483.73% |
| Dec'24 | 22.46 | +107.77% | -2.44 | -10.86% |
| Sep'24 | 10.81 | -69.19% | -2.15 | -19.89% |
| Jun'24 | 35.09 | — | -6.57 | -18.72% |
Financial Performance: Revenue Collapse and Operational Paralysis
Chrome Silicon's Q3 FY26 financial performance reveals a company in severe distress. Net sales of ₹0.54 crores represent a near-complete collapse from operational levels seen a year ago, when the company generated ₹22.46 crores in revenue. On a year-on-year basis, revenue declined by 97.60%, whilst the sequential improvement of 86.21% from Q2 FY26's ₹0.29 crores provides little comfort given the minuscule absolute figures.
The company's operating profit before depreciation, interest, and tax (excluding other income) stood at ₹-5.23 crores, translating to an operating margin of -968.52%—a metric that defies conventional financial analysis and suggests fundamental operational dysfunction. When other income of ₹4.80 crores is included, the operating loss narrows to ₹0.43 crores, highlighting the company's dependence on non-operational income sources for survival.
After accounting for depreciation of ₹1.70 crores and negligible interest costs, the company reported a pre-tax loss of ₹2.13 crores. With zero tax expense due to accumulated losses, the net loss remained at ₹2.13 crores, representing a PAT margin of -394.44%. Whilst this marks an improvement from Q2 FY26's loss of ₹3.00 crores, the company remains deeply unprofitable with no clear path to sustainable operations.
Employee costs of ₹0.10 crores in Q3 FY26, down from ₹0.29 crores in the previous quarter, suggest significant workforce reductions or minimal operational activity. The company's ability to generate other income of ₹4.80 crores—substantially higher than its operational revenue—raises questions about the sustainability of this income stream and the company's core business viability.
Operational Crisis: Capital Destruction and Negative Equity
Chrome Silicon's operational metrics paint a dire picture of a company facing existential challenges. The latest return on equity (ROE) of -412.57% represents severe capital destruction, indicating that the company is burning through shareholder funds at an alarming rate. This compares unfavourably to the five-year average ROE of 0.48%, which itself was already weak but at least marginally positive.
The company's return on capital employed (ROCE) stands at -160.46% for the latest period, compared to a five-year average of -46.92%. These metrics underscore the company's inability to generate returns on the capital invested in its operations. With negative shareholder equity reflected in a book value per share of ₹-125.87, the company's balance sheet is deeply impaired, having accumulated losses that far exceed its equity capital of ₹16.39 crores.
Critical Operational Concerns
Capital Destruction: With ROE of -412.57% and ROCE of -160.46%, Chrome Silicon is destroying shareholder value at an unprecedented rate. The negative book value of ₹-125.87 per share indicates accumulated losses have completely eroded the company's equity base, leaving it with negative net worth.
Revenue Evaporation: The 97.60% year-on-year revenue decline to just ₹0.54 crores suggests the company's manufacturing operations are virtually non-functional. This level of revenue cannot support even minimal operational expenses, let alone generate profits.
Dependency on Other Income: The company's reliance on other income (₹4.80 crores) to partially offset operational losses raises serious sustainability concerns. This non-operational income source may not be reliable or recurring.
The company's debt-to-equity ratio of 1.76 (on a five-year average basis) presents a complex picture given the negative equity position. With long-term debt of ₹35.01 crores as of March 2018 (the latest available balance sheet data) and current liabilities of ₹70.34 crores, the company faces significant leverage challenges against a backdrop of negative shareholder funds.
Industry Context: Underperforming in a Recovering Ferrous Metals Sector
Chrome Silicon's struggles stand in stark contrast to the broader ferrous metals sector's performance. Over the past year, the Ferrous Metals sector delivered returns of 66.70%, whilst Chrome Silicon managed only 4.52%—an underperformance of 62.18 percentage points. This divergence highlights company-specific operational challenges rather than sector-wide headwinds.
The ferro silicon industry, which supplies a critical input to steel manufacturing, has generally benefited from India's robust steel production growth. However, Chrome Silicon appears unable to capitalise on these favourable industry dynamics. The company's plant in Medak district, Telangana, which was originally designed for 15,000 tonnes per annum capacity, appears to be operating at minimal levels or potentially shuttered, given the negligible revenue generation.
Sector Performance Divergence
Whilst the broader Ferrous Metals sector has delivered strong returns of 66.70% over the past year, Chrome Silicon has significantly lagged with only 4.52% returns. This 62-percentage-point underperformance reflects deep-rooted company-specific challenges in operations, management, and strategic direction that prevent it from participating in sector growth.
The company's quality grade of "Below Average" from Mojo analysis reflects its weak long-term financial performance. With a five-year sales growth rate of 20.65% but a five-year EBIT growth of -186.39%, the company has failed to translate revenue growth into profitability. The average EBIT-to-interest coverage of -35.45 times indicates the company has been consistently loss-making, unable to cover even its interest obligations from operating profits.
Peer Comparison: At the Bottom of the Industry
When compared to peers in the ferrous metals sector, Chrome Silicon's position is notably weak across virtually all metrics. The company's negative P/E ratio (loss-making status) contrasts with profitable peers, whilst its price-to-book value of 3.63 times appears elevated given the negative book value per share—a paradox that reflects market pricing inefficiencies in distressed securities.
| Company | P/E (TTM) | ROE (%) | Debt/Equity | P/BV | Div Yield |
|---|---|---|---|---|---|
| Chrome Silicon | NA (Loss Making) | 0.48% | 1.76 | 3.63 | NA |
| Vaswani Industries | 15.13 | 6.49% | 1.61 | 1.28 | NA |
| Scan Steels | 9.82 | 4.29% | 0.22 | 0.43 | NA |
| Bihar Sponge | 10.22 | 0.00% | -0.59 | -3.31 | NA |
| Shyam Century | NA (Loss Making) | 12.57% | -0.50 | 0.67 | NA |
| Indsil Hydro | NA (Loss Making) | 13.31% | 0.81 | 0.92 | 1.31% |
Chrome Silicon's ROE of 0.48% (five-year average) ranks amongst the weakest in its peer group, with only Bihar Sponge showing a comparable 0.00% figure. Most peers demonstrate positive ROE in the 4-13% range, highlighting Chrome Silicon's fundamental profitability challenges. The company's debt-to-equity ratio of 1.76 is amongst the highest in the group, indicating elevated financial leverage without corresponding returns.
The company's market capitalisation of ₹72.00 crores positions it as the smallest player amongst its peers, reflecting investor scepticism about its turnaround prospects. With institutional holdings of just 0.01% and no mutual fund or insurance company participation, the stock lacks institutional support—a red flag for potential investors.
Valuation Analysis: High Risk Despite Low Absolute Price
Chrome Silicon's current valuation presents a complex picture. Trading at ₹43.90 with a market capitalisation of ₹72.00 crores, the stock appears cheap in absolute terms but expensive relative to its fundamentals. The company's valuation grade of "Risky" from Mojo analysis appropriately captures the elevated risk profile despite the low share price.
With a negative P/E ratio due to consistent losses, traditional valuation metrics lose relevance. The price-to-book value of 3.63 times appears meaningless given the negative book value per share of ₹-125.87. The EV/EBITDA multiple of -1.27 times and EV/EBIT of -1.17 times reflect the company's negative earnings, making these metrics unsuitable for valuation purposes.
The EV/Sales multiple of 17.52 times appears extraordinarily high, but this metric is distorted by the minimal revenue base of recent quarters. With trailing twelve-month sales likely well below ₹10 crores, even a modest enterprise value results in elevated multiples. The company's 52-week range of ₹37.15 to ₹58.00 shows significant volatility, with the current price 24.31% below the high and 18.17% above the low.
Given the negative equity, accumulated losses, and operational challenges, any valuation exercise for Chrome Silicon must focus on liquidation value or restructuring scenarios rather than going-concern valuations. The company's fixed assets of ₹7.31 crores (as of March 2018) and investments of ₹15.73 crores may represent the primary sources of value, though these figures are dated and may have deteriorated further.
Shareholding Pattern: Promoter Stability Amidst Operational Turmoil
Chrome Silicon's shareholding pattern shows remarkable stability in promoter holdings at 40.36% across the last five quarters, with no sequential changes. This consistency suggests promoters remain committed to the company despite its operational struggles, though it also indicates an absence of capital infusion or restructuring initiatives that might alter the ownership structure.
| Quarter | Promoter % | FII % | MF % | Insurance % | Other DII % | Public % |
|---|---|---|---|---|---|---|
| Dec'25 | 40.36% | 0.00% | 0.00% | 0.00% | 0.01% | 59.64% |
| Sep'25 | 40.36% | 0.00% | 0.00% | 0.00% | 0.04% | 59.60% |
| Jun'25 | 40.36% | 0.00% | 0.00% | 0.00% | 0.04% | 59.60% |
| Mar'25 | 40.36% | 0.00% | 0.00% | 0.00% | 0.04% | 59.60% |
| Dec'24 | 40.36% | 0.00% | 0.00% | 0.00% | 0.04% | 59.60% |
The complete absence of foreign institutional investor (FII) and mutual fund holdings reflects institutional investors' avoidance of the stock. Other domestic institutional investor (DII) holdings declined marginally from 0.04% to 0.01% in Q3 FY26, suggesting even minimal institutional participation is waning. The public shareholding of 59.64% likely comprises retail investors and potentially distressed debt holders.
Promoter pledging at 12.91% of total shares raises concerns about financial stress amongst the promoter group, though this figure is moderate compared to highly leveraged companies. The promoter group, led by Mvvs Murthi (15.66%), Msp Rama Rao (11.88%), and other family members and entities, has maintained its stake but has not demonstrated willingness or ability to inject fresh capital for operational revival.
Stock Performance: Underperformance Across All Time Frames
Chrome Silicon's stock performance reveals consistent underperformance against benchmark indices across most time periods. Over the past year, the stock delivered returns of 4.52%, significantly trailing the Sensex's 9.89% gain, resulting in negative alpha of -5.37 percentage points. This underperformance accelerates over shorter time frames, with the stock down 6.62% over six months compared to the Sensex's 3.62% gain.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | 1.71% | -0.90% | +2.61% |
| 1 Month | -1.48% | -0.07% | -1.41% |
| 3 Months | -6.60% | -1.69% | -4.91% |
| 6 Months | -6.62% | 3.62% | -10.24% |
| YTD | -2.60% | -2.00% | -0.60% |
| 1 Year | 4.52% | 9.89% | -5.37% |
| 3 Years | -8.35% | 36.90% | -45.25% |
| 5 Years | 232.58% | 61.52% | +171.06% |
The three-year performance is particularly concerning, with the stock declining 8.35% whilst the Sensex surged 36.90%—a staggering underperformance of 45.25 percentage points. However, the five-year return of 232.58% (versus Sensex's 61.52%) reflects recovery from extremely depressed levels in 2021, rather than sustained operational improvement.
The stock's beta of 1.50 indicates high volatility, with movements 50% more pronounced than the broader market. With volatility of 61.67% compared to the Sensex's 11.57%, Chrome Silicon exhibits extreme price swings that reflect its distressed status and low liquidity. The risk-adjusted return of 0.07 over one year compares unfavourably to the Sensex's 0.85, classifying the stock as "High Risk Low Return."
Technical indicators uniformly signal bearish trends, with the stock trading below all key moving averages—5-day (₹43.51), 20-day (₹43.14), 50-day (₹44.52), 100-day (₹45.71), and 200-day (₹45.48). The MACD, RSI, Bollinger Bands, and KST indicators all point to continued weakness, with the overall technical trend classified as "Bearish" as of February 16, 2026.
Investment Thesis: Multiple Red Flags Dominate
Chrome Silicon's investment thesis is overwhelmingly negative, with fundamental, technical, and valuation concerns converging to create a high-risk profile. The company's Mojo score of 12 out of 100 places it firmly in "Strong Sell" territory, reflecting the cumulative impact of operational failures, financial distress, and poor market positioning.
The "Below Average" quality grade stems from weak profitability metrics, with average ROE of 0.48% and average ROCE of -46.92% indicating persistent value destruction. The company's inability to generate positive cash flows from operations (₹-15.46 crores in FY18) and reliance on other income for survival raise serious going-concern questions.
The "Flat" financial trend classification for Q3 FY26, despite the sequential revenue improvement, reflects the company's continued losses and lack of meaningful operational progress. With PAT margins of -394.44% and operating margins of -968.52%, the company remains far from achieving even break-even operations, let alone sustainable profitability.
Key Strengths & Risk Factors
Limited Positives
Critical Concerns
Outlook: Restructuring or Liquidation Scenarios Likely
Chrome Silicon's outlook remains severely challenged, with the company facing fundamental questions about its viability as a going concern. The path forward likely involves either comprehensive operational restructuring, capital infusion, or potentially liquidation proceedings. Without significant intervention, the current trajectory points towards continued losses and further erosion of shareholder value.
Critical Red Flags
Potential Catalysts (Low Probability)
The company's financial trend classification of "Flat" and technical trend of "Bearish" suggest continued weakness ahead. With the stock trading below all moving averages and negative momentum indicators across weekly and monthly time frames, near-term price performance likely remains under pressure. The 52-week low of ₹37.15 represents a potential downside target if operational conditions deteriorate further.
The Verdict: Exit Recommended for All Investors
Score: 12/100
For Fresh Investors: Avoid completely. Chrome Silicon presents extreme risk with virtually no prospect of near-term recovery. The company's negative equity, collapsed revenue base, and severe operating losses make it unsuitable for any investment portfolio. The ₹0.54 crores quarterly revenue cannot support operations, and the dependency on other income is unsustainable. With no institutional support, no turnaround plan, and deteriorating fundamentals, fresh capital allocation here would be speculative at best and reckless at worst.
For Existing Holders: Exit at the earliest opportunity to limit further losses. The stock's classification as "Strong Sell" with a Mojo score of just 12 out of 100 reflects the severe operational and financial distress. Whilst the current price of ₹43.90 may seem low in absolute terms, it remains expensive relative to the company's negative book value and non-existent earnings. Any residual value likely lies in potential asset liquidation rather than going-concern operations. The risk of further deterioration substantially outweighs any speculative turnaround potential.
Fair Value Estimate: Not applicable. Traditional valuation methods are meaningless for a company with negative equity and minimal revenue. Liquidation value of assets (₹15.73 crores investments + ₹7.31 crores fixed assets as of FY18) net of liabilities may provide some recovery, but current market capitalisation of ₹72.00 crores appears disconnected from fundamental value.
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. Chrome Silicon Ltd. presents extreme risk characteristics including negative equity, collapsed operations, and severe financial distress. Past performance is not indicative of future results, and the company faces significant going-concern uncertainties.
