The company's recent quarterly performance reveals an operational standstill, with revenue generation having effectively ceased since mid-2019. Historical data shows net sales plummeted from ₹10.43 crores in Q1 FY19 to just ₹1.11 crores in Q2 FY20, marking a catastrophic year-on-year decline of 91.95%. The firm, which operates in the IT/ITES segment, has struggled to regain traction in an industry that has otherwise witnessed robust growth across India's technology landscape.
Trading at ₹9.13 as of November 14, 2025, the stock has experienced extreme volatility, touching its 52-week high at the current price whilst sitting 508.67% above its 52-week low of ₹1.50. This dramatic price movement appears disconnected from underlying business fundamentals, raising questions about speculative trading activity in this thinly traded micro-cap security.
Financial Performance: A Business in Hibernation
The most recent financial data available for Covidh Technologies reveals a company that has essentially ceased operations. For the fiscal year ending March 2019, the firm reported net sales of ₹25.00 crores, representing a 24.2% year-on-year decline from ₹33.00 crores in FY18. More alarmingly, both operating profit and net profit stood at zero for FY19, indicating complete erosion of profitability.
| Quarter | Net Sales (₹ Cr) | QoQ Change | YoY Change | PAT (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|
| Jun'19 | 1.11 | ▼ 69.34% | ▼ 91.95% | -0.06 | -5.41% |
| Mar'19 | 3.62 | ▼ 14.01% | ▼ 41.80% | -0.03 | -0.83% |
| Dec'18 | 4.21 | ▼ 59.64% | ▼ 3.88% | -0.01 | -0.26% |
| Jun'18 | 10.43 | ▼ 24.37% | — | 0.02 | 0.20% |
| Mar'18 | 13.79 | ▲ 121.70% | — | 0.00 | 0.03% |
| Sep'15 | 6.22 | ▲ 42.01% | — | 0.09 | 1.44% |
| Jun'15 | 4.38 | — | — | 0.08 | 1.74% |
The quarterly trend analysis reveals a business that peaked operationally during FY18 before entering terminal decline. Operating margins, which stood at a modest 4.53% in Q2 FY16, deteriorated sharply to negative territory by Q2 FY20. The company's inability to generate positive cash flows from operations is evident in its cash flow statement, which shows zero cash flow from operations for FY19.
Critical Warning: Operational Collapse
Covidh Technologies has effectively ceased revenue-generating activities since 2019. The company's operating profit margin has collapsed from positive territory to zero, whilst net losses have accumulated. With negligible employee costs and minimal operational expenditure, the firm appears to have abandoned active business operations in the IT services sector.
Balance Sheet Concerns: Negative Book Value Signals Distress
Perhaps the most troubling aspect of Covidh Technologies' financial profile is its negative book value, reflected in a Price-to-Book ratio of -7.68x. This indicates that the company's liabilities exceed its assets, placing it in a technically insolvent position from an accounting perspective. For equity investors, this represents a fundamental red flag that cannot be ignored.
The company's Return on Equity (ROE) stands at zero on average, with the latest figure showing negative book value, making meaningful ROE calculation impossible. Similarly, Return on Capital Employed (ROCE) averages just 1.58%, though the latest figure has deteriorated to -8.72%, indicating capital destruction rather than value creation.
On a marginally positive note, the firm maintains a net cash position with a Net Debt-to-Equity ratio of -1.58, suggesting minimal borrowings. However, this appears to be a consequence of ceased operations rather than prudent financial management. With zero institutional holdings and no mutual fund or FII interest, the company has failed to attract any meaningful institutional confidence.
Capital Structure Insight
The company's equity capital stands at ₹8.41 crores across 84.09 crore shares, resulting in an extremely low face value of ₹10 per share. With promoter holding at 92.76% and zero pledging, the promoter group maintains control despite the operational challenges. However, the absence of any institutional participation (0% FII, 0% MF, 0% Insurance) underscores the lack of professional investor interest in the stock.
Valuation Analysis: Elevated Multiples Disconnect from Reality
Trading at a P/E ratio of 55x—significantly above the industry average of 35x—Covidh Technologies presents a valuation puzzle. For a company with near-zero operations and negative book value, such elevated multiples appear entirely unjustified by fundamental metrics. The Price-to-Book ratio of -7.68x further highlights the disconnect between market pricing and intrinsic value.
The company's Enterprise Value-to-EBITDA ratio stands at -9.27x, a negative figure that reflects the absence of meaningful earnings before interest, taxes, depreciation, and amortisation. Similarly, the EV-to-EBIT ratio mirrors this at -9.27x, whilst EV-to-Sales cannot be calculated due to negligible revenue generation.
| Valuation Metric | Covidh Technologies | Industry Avg | Assessment |
|---|---|---|---|
| P/E Ratio (TTM) | 55.00x | 35.00x | Premium to industry |
| Price-to-Book | -7.68x | — | Negative book value |
| EV/EBITDA | -9.27x | — | Negative earnings |
| Dividend Yield | NA | — | No dividends |
The proprietary Mojo Score of 40 out of 100 places the stock firmly in "SELL" territory, with the overall valuation assessment categorised as "RISKY". This rating reflects the fundamental disconnect between the stock's market price and the company's operational reality. The valuation grade has oscillated between "Risky" and "Does Not Qualify" over the past 18 months, never achieving even a "Fairly Valued" status.
Peer Comparison: Lagging Across All Metrics
When benchmarked against peers in the miscellaneous sector, Covidh Technologies' underperformance becomes starkly apparent. The company's zero ROE compares unfavourably to sector peers like Inventurus Knowledge Solutions (29.58%), Sagility (8.98%), and Altius Telecom (6.07%). Similarly, its negative Price-to-Book ratio stands in sharp contrast to positive multiples across the peer group.
| Company | P/E (TTM) | Div Yield | ROE | Debt/Equity | P/BV |
|---|---|---|---|---|---|
| Covidh Technologies | 54.84x | NA | 0.0% | -1.58x | -7.68x |
| Altius Telecom | 51.50x | 15.89% | 6.07% | 3.75x | 3.47x |
| Embassy Office REIT | 130.21x | 0.12% | 3.81% | 0.91x | 1.79x |
| Mindspace Business | 53.94x | 5.50% | 3.43% | 0.77x | 2.07x |
| Inventurus Knowledge | 56.51x | NA | 29.58% | 0.24x | 12.26x |
| Sagility | 31.20x | NA | 8.98% | 0.14x | 2.80x |
With a market capitalisation of just ₹8.00 crores, Covidh Technologies ranks last amongst its peer group. The company's inability to generate returns on equity, coupled with its negative book value, places it in a fundamentally different category from operational peers who maintain positive profitability and sustainable business models.
Shareholding Pattern: Promoter Dominance with Zero Institutional Interest
The shareholding structure of Covidh Technologies reveals a promoter-dominated entity with 92.76% holding as of September 2025, unchanged from the previous quarter. Ganapa Nersi Reddy holds the entire promoter stake, with no pledging of shares—a minor positive in an otherwise concerning picture.
| Quarter | Promoter | FII | Mutual Funds | Insurance | Non-Institutional |
|---|---|---|---|---|---|
| Sep'25 | 92.76% | 0.00% | 0.00% | 0.00% | 7.24% |
| Jun'25 | 92.76% | 0.00% | 0.00% | 0.00% | 7.24% |
| Jun'23 | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Jun'22 | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Mar'22 | 26.35% | 0.00% | 0.00% | 0.00% | 73.65% |
The notable shift occurred between June 2023 and June 2025, when promoter holding decreased from 100% to 92.76%, with 7.24% moving to non-institutional investors. The complete absence of Foreign Institutional Investors (0%), Mutual Funds (0%), Insurance companies (0%), and other Domestic Institutional Investors (0%) signals a lack of confidence from professional money managers who typically conduct rigorous due diligence before investment.
Stock Performance: Speculative Rally Defies Fundamentals
Despite catastrophic operational performance, Covidh Technologies' stock has delivered extraordinary returns across select timeframes. The three-month return of 147.43% vastly outpaces the Sensex's 4.92% gain, generating alpha of 142.51 percentage points. Over five years, the stock has surged 1,304.62% compared to the Sensex's 93.78%, though this appears driven by speculative trading rather than fundamental improvement.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Day | +1.90% | +0.10% | +1.80% |
| 1 Week | +10.00% | +1.62% | +8.38% |
| 1 Month | +21.09% | +3.09% | +18.00% |
| 3 Months | +147.43% | +4.92% | +142.51% |
| 3 Years | +636.29% | +37.22% | +599.07% |
| 5 Years | +1,304.62% | +93.78% | +1,210.84% |
| 10 Years | +10.67% | +230.19% | -219.52% |
The technical picture shows a "BULLISH" trend since November 6, 2025, with the stock trading above all available moving averages. The 5-day MA stands at ₹8.79, the 20-day MA at ₹7.66, and the 50-day MA at ₹5.95. However, with daily trading volumes of just 2 shares, the stock's liquidity remains extremely poor, making it susceptible to wild price swings on minimal transaction activity.
The recent delivery volume surge of 124.3% over the trailing month suggests some genuine buying interest, though the absolute volumes remain negligible. This combination of technical bullishness and fundamental weakness creates a dangerous cocktail for unwary investors who might mistake price momentum for business improvement.
"A micro-cap stock delivering 1,300% returns over five years whilst reporting zero profits and negative book value represents speculation, not investment."
Quality Assessment: Below Average Fundamentals
Covidh Technologies carries a "BELOW AVERAGE" quality grade from Mojo, reflecting its long-term financial underperformance. The company's five-year sales growth stands at 0.00%, whilst EBIT growth similarly registers 0.00%—stark evidence of a business that has failed to grow or generate operating profits over an extended period.
Key quality metrics paint a uniformly negative picture. The average EBIT-to-Interest coverage ratio of 0.0x indicates the company cannot service interest obligations from operating profits. Average Debt-to-EBITDA of 3.00 suggests moderate leverage, though with zero EBITDA generation, this ratio becomes meaningless. The average ROCE of 1.58% falls far below acceptable thresholds for capital efficiency, whilst the average ROE of 0.0% confirms complete absence of shareholder value creation.
Key Strengths & Risk Factors
KEY STRENGTHS
- Net Cash Position: Net Debt-to-Equity of -1.58x indicates minimal borrowings and no immediate solvency concerns from debt obligations.
- Zero Promoter Pledging: Complete absence of pledged shares eliminates risk of forced selling due to margin calls.
- High Promoter Holding: 92.76% promoter stake ensures management control and alignment of interests.
- Recent Price Momentum: Technical indicators show bullish trend with stock above all moving averages.
- Extreme Undervaluation Potential: If business operations resume, current price could represent significant upside opportunity.
KEY CONCERNS
- Operational Collapse: Near-zero revenue generation since 2019 indicates complete cessation of business activities.
- Negative Book Value: Liabilities exceeding assets place the company in technically insolvent territory.
- Zero Profitability: No positive earnings for multiple years; consistent losses eroding shareholder equity.
- Zero Institutional Interest: Complete absence of FII, MF, and insurance holdings signals lack of professional investor confidence.
- Negligible Liquidity: Daily volumes of just 2 shares create extreme price volatility and exit difficulties.
- Quality Grade Deterioration: "Below Average" quality assessment reflects poor long-term fundamentals.
- Elevated Valuation: P/E of 55x appears unjustified given operational realities and negative book value.
Outlook: What Lies Ahead
POSITIVE CATALYSTS
- Resumption of IT services operations with new client acquisitions
- Strategic restructuring or merger with operational entity
- Asset monetisation to improve book value
- Entry of institutional investors signalling turnaround confidence
RED FLAGS TO MONITOR
- Continued absence of revenue generation beyond next two quarters
- Further deterioration in book value or increase in liabilities
- Reduction in promoter holding without clear strategic rationale
- Regulatory actions or delisting warnings from stock exchanges
- Persistent lack of institutional participation despite price rally
For Covidh Technologies to justify even a "HOLD" rating, the company must demonstrate tangible signs of operational revival. This would include securing new client contracts, generating positive quarterly revenues above ₹5 crores, achieving positive operating margins, and attracting institutional investor interest. Without these fundamental improvements, the current stock price appears entirely disconnected from intrinsic value.
The Verdict: High-Risk Speculation, Not Investment
Score: 40/100
For Fresh Investors: Avoid completely. The company's operational collapse, negative book value, and absence of institutional interest make this an extremely high-risk proposition unsuitable for any serious portfolio. The recent price rally appears driven by speculation rather than fundamental improvement, creating significant downside risk when momentum reverses.
For Existing Holders: Consider exiting positions at current elevated prices. With the stock trading at 52-week highs despite zero operational activity and negative book value, this presents a rare opportunity to exit before fundamentals reassert themselves. The negligible daily volumes of 2 shares mean exits must be executed patiently to avoid adverse price impact.
Fair Value Estimate: Given zero revenue generation and negative book value, intrinsic value approaches zero. Current price of ₹9.13 represents significant overvaluation (potential downside of 80-90% if fundamentals drive pricing).
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. The views expressed herein are based on publicly available information and do not constitute a recommendation to buy, sell, or hold any securities. Past performance is not indicative of future results, and micro-cap stocks carry substantially higher risks than large-cap equities.
