The results paint a grim picture of a company in severe distress. Creative Eye has now recorded zero revenue in Q3 FY26, Q2 FY26, and Q1 FY26, representing a complete cessation of business operations for nine consecutive months. The company's inability to generate any sales whatsoever, coupled with accelerating losses, suggests fundamental challenges in its business model within the competitive media and entertainment landscape. With the stock trading at ₹7.00—down 43.41% from its 52-week high of ₹12.37—investors are clearly pricing in significant uncertainty about the company's future prospects.
| Quarter | Dec'25 | Sep'25 | Jun'25 | Mar'25 | Dec'24 | Sep'24 | Jun'24 |
|---|---|---|---|---|---|---|---|
| Revenue (₹ Cr) | 0.00 | 0.00 | 0.00 | 1.20 | 0.00 | 1.25 | 0.16 |
| Net Profit (₹ Cr) | -3.68 | -0.65 | -0.71 | 0.23 | -0.80 | 0.46 | -0.61 |
| Operating Margin (%) | 0.0% | 0.0% | 0.0% | 25.0% | 0.0% | 25.6% | -312.5% |
Financial Performance: A Complete Revenue Collapse
The Q3 FY26 results reveal a company in freefall. Creative Eye recorded zero revenue for the third consecutive quarter, a devastating trend that began in Q1 FY26. This represents a complete 100% year-on-year decline from the already negligible revenue base. The net loss of ₹3.68 crores in Q3 FY26 represents a 466.15% deterioration from the ₹0.65 crore loss in Q2 FY26, indicating that operational challenges are intensifying rather than stabilising.
On a nine-month basis for FY26, the company has generated zero revenue whilst accumulating losses of approximately ₹5.04 crores across the first three quarters. Employee costs, whilst reduced from ₹0.31 crores in Q1 FY26 to ₹0.12 crores in Q3 FY26, continue to drain cash reserves despite the absence of any revenue-generating activities. Operating profit before depreciation, interest, and tax stood at negative ₹0.40 crores in Q3 FY26, excluding other income, highlighting the fundamental unprofitability of core operations.
The company's reliance on other income—which stood at ₹0.22 crores in Q3 FY26—provides only minimal cushioning against operational losses. Interest expenses of ₹0.14 crores continue to burden the profit and loss statement despite the company maintaining a net cash position on the balance sheet. The absence of any tax provisions reflects the company's loss-making status, with no prospect of generating taxable profits in the near term.
Operational Paralysis: Zero Business Activity
The most alarming aspect of Creative Eye's Q3 FY26 results is the complete absence of business operations. The company, which was founded in 1986 and built its reputation producing television content for Doordarshan and satellite channels, has effectively ceased commercial activities. With zero revenue recorded in each of the last three quarters, the company appears to have lost its position in the competitive media production landscape.
The company's return on equity has deteriorated to negative 7.30%, reflecting the destruction of shareholder value through persistent losses. The average ROE over recent periods stands at 0.0%, indicating a prolonged period of value erosion. Return on capital employed tells an equally troubling story at negative 4.16% for the latest period, with the five-year average at negative 10.25%—clear evidence of capital being deployed unproductively or not deployed at all.
Critical Operational Concerns
Zero Revenue Generation: Three consecutive quarters without any sales represent a complete operational shutdown. The company has failed to secure any commissioned programming or sponsorship deals, its traditional revenue sources.
Accelerating Losses: The Q3 FY26 loss of ₹3.68 crores is the highest quarterly loss in recent history, suggesting deteriorating cost control or one-time write-offs.
Negative Returns: ROE of -7.30% and ROCE of -4.16% demonstrate systematic value destruction with no signs of operational turnaround.
Balance Sheet Erosion and Cash Concerns
Whilst Creative Eye maintains a technically debt-free balance sheet with negative net debt-to-equity of 0.17, the ongoing cash burn raises serious sustainability questions. Shareholder funds have declined from ₹20.65 crores in FY24 to ₹19.99 crores in FY25, with further erosion likely in FY26 given the accumulated losses of over ₹5.04 crores in the first nine months.
The company's current assets stood at ₹22.35 crores as of March 2025, providing some liquidity buffer. However, with quarterly losses now accelerating to ₹3.68 crores and no revenue visibility, this cash cushion could deplete rapidly. The company's fixed assets have steadily declined from ₹1.38 crores in FY20 to ₹0.95 crores in FY25, suggesting minimal capital investment and potential asset disposals.
Cash flow from operations was negative ₹1.00 crore in FY25, indicating that the company is burning cash to fund its operations. Investing activities generated ₹2.00 crores in FY25, likely from asset sales or investment liquidation, whilst financing activities consumed ₹1.00 crore. The closing cash balance of ₹9.00 crores in FY25 provides temporary breathing room, but without revenue generation, this runway is finite.
Industry Context: Struggling in a Digital-First Media Landscape
Creative Eye's operational paralysis must be viewed against the backdrop of India's rapidly evolving media and entertainment sector. The traditional television content production model—particularly for commissioned programming on Doordarshan and satellite channels—has faced intense disruption from streaming platforms, digital content creators, and changing viewer preferences.
The company's peer group in the media and entertainment sector shows similarly challenged fundamentals, with multiple companies reporting loss-making operations. However, Creative Eye's complete cessation of revenue generation sets it apart as particularly distressed. The sector's one-year return of negative 12.88% underscores the broader challenges facing traditional media companies, though Creative Eye's 6.06% one-year return has marginally outperformed the sector—primarily due to low base effects rather than fundamental improvement.
Sector Challenges Impacting Creative Eye
The media production industry has undergone seismic shifts with the rise of over-the-top (OTT) platforms, user-generated content, and algorithmic content distribution. Traditional commissioned programming models have lost relevance as broadcasters shift budgets towards in-house production or direct partnerships with larger production houses. Creative Eye's inability to adapt to this new landscape has left it stranded without a viable business model.
Peer Comparison: Among the Weakest in a Struggling Sector
Creative Eye's positioning within its peer group highlights its relative weakness. With a market capitalisation of just ₹15.00 crores, it ranks third amongst comparable media companies, though this small size offers little comfort given the complete absence of operations.
| Company | P/E (TTM) | ROE (%) | Debt/Equity | P/BV | Div Yield |
|---|---|---|---|---|---|
| Creative Eye | NA (Loss Making) | 0.0% | -0.17 | 0.70 | NA |
| V R Films & Studios | NA (Loss Making) | 0.0% | 0.61 | 1.93 | NA |
| Radaan Media | NA (Loss Making) | 0.0% | -0.91 | -1.07 | NA |
| Innokaiz India | NA (Loss Making) | 0.0% | 0.35 | 0.35 | NA |
| Perfect-Octave | 9.91 | 1.63% | 0.43 | 1.76 | NA |
| Interworld Digital | NA (Loss Making) | 0.0% | 0.02 | 0.15 | NA |
The peer comparison reveals a sector in distress, with five of six companies loss-making and unable to generate meaningful returns on equity. Creative Eye's price-to-book ratio of 0.70x suggests the market values the company below its stated book value, reflecting scepticism about asset realisability and future profitability. Only Perfect-Octave amongst the peer group demonstrates positive profitability with a ROE of 1.63%, highlighting how rare operational success is in this challenged sector.
Valuation Analysis: Distressed Asset Trading Below Book Value
Creative Eye's valuation metrics reflect its status as a distressed asset. Trading at ₹7.00 per share with a book value of ₹9.96 per share, the stock's price-to-book ratio of 0.70x indicates the market is pricing in significant doubt about the company's ability to realise its stated book value. The company's loss-making status renders traditional P/E ratios meaningless, whilst the negative EBITDA makes EV/EBITDA multiples of negative 8.06x uninformative.
The company's overall valuation assessment is classified as "RISKY" by proprietary metrics, a designation it has held since April 2023. This reflects not just current operational challenges but a sustained pattern of value destruction. The stock's 52-week range of ₹5.26 to ₹12.37 shows significant volatility, with the current price 43.41% below the peak—suggesting investors have progressively lost confidence as operational challenges have mounted.
With no dividend yield, negative returns on capital, and zero revenue generation, Creative Eye offers no traditional investment appeal. The stock's beta of 1.50 indicates it is 50% more volatile than the broader market, adding to the risk profile. For a company with no operational earnings and depleting cash reserves, this volatility represents downside risk rather than upside opportunity.
Shareholding Pattern: Stable Promoter Base Amid Operational Turmoil
One element of stability in Creative Eye's otherwise troubled picture is its shareholding pattern. Promoter holding has remained steady at 56.26% across the last five quarters, with no sequential changes. The promoters—Zuby Kochhar (35.6%), Dheeraj Kumar (19.54%), and Dheerajkumar Bhagwandass Kochhar (1.12%)—have maintained their stake despite the operational challenges, suggesting either long-term commitment or limited exit options.
| Quarter | Dec'25 | Sep'25 | Jun'25 | Mar'25 | Dec'24 |
|---|---|---|---|---|---|
| Promoter (%) | 56.26 | 56.26 | 56.26 | 56.26 | 56.26 |
| FII (%) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MF (%) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Non-Institutional (%) | 43.74 | 43.74 | 43.74 | 43.74 | 43.74 |
Notably, there is zero institutional participation—no foreign institutional investors, mutual funds, or insurance companies hold stakes in Creative Eye. This complete absence of institutional interest underscores the company's lack of investment appeal and the severity of its operational challenges. The remaining 43.74% is held by non-institutional investors, likely comprising retail shareholders trapped in a deteriorating investment.
Positively, there is no promoter pledging, eliminating one potential risk factor. However, the absence of pledging likely reflects the limited borrowing capacity against shares of a loss-making company rather than financial strength. The stable shareholding pattern, whilst avoiding the negative signal of promoter exits, also suggests limited liquidity and price discovery in the stock.
Stock Performance: Relative Resilience Masks Fundamental Weakness
Creative Eye's stock performance presents a paradox—whilst the company's fundamentals have deteriorated dramatically, the stock has delivered positive returns over longer timeframes. The one-year return of 6.06% compares favourably to the media and entertainment sector's negative 12.88% return, representing 18.94 percentage points of outperformance. However, this relative strength stems from a low base and periodic speculative interest rather than fundamental improvement.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Day | -6.42% | 0.34% | -6.76% |
| 1 Week | 0.86% | -0.59% | +1.45% |
| 1 Month | -1.55% | 0.20% | -1.75% |
| 3 Months | -7.53% | -1.11% | -6.42% |
| 6 Months | -5.79% | 3.03% | -8.82% |
| 1 Year | 6.06% | 10.22% | -4.16% |
| 3 Years | 55.56% | 37.26% | +18.30% |
| 5 Years | 140.55% | 63.15% | +77.40% |
The recent trend, however, is concerning. The stock has declined 7.53% over three months and 5.79% over six months, underperforming the Sensex significantly during these periods. The immediate post-result reaction—a 6.42% single-day decline—reflects investor recognition of the deteriorating fundamentals. Technical indicators have turned decisively bearish, with the stock falling below all key moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), signalling weak momentum.
The stock's three-year and five-year returns of 55.56% and 140.55% respectively, whilst impressive on paper, must be contextualised. These gains occurred from extremely depressed levels and were driven by periodic speculative interest rather than operational recovery. The high volatility of 71.11% and beta of 1.50 classify this as a "HIGH RISK MEDIUM RETURN" investment, though current fundamentals suggest even the "medium return" characterisation is optimistic.
Investment Thesis: Multiple Red Flags, No Catalysts
Creative Eye's investment thesis, if it can be called that, rests on the slim hope of operational turnaround or asset monetisation. The company's below-average quality grade reflects its weak long-term financial performance, with negative five-year sales growth of 32.41% and average ROCE of negative 10.25%. The financial trend is classified as "FLAT" despite the severe Q3 FY26 loss, likely because the company has been loss-making for extended periods.
The proprietary Mojo score of 12 out of 100 places Creative Eye firmly in "STRONG SELL" territory, a rating it has held since November 2025. Key concerns limiting the score include the bearish technical trend, flat financial performance, weak long-term fundamental strength with operating losses, and the most recent quarter's disappointing results. With mixed signals across all four assessment parameters (near-term drivers, quality, valuation, and overall assessment), there are no compelling reasons to own this stock.
Key Strengths & Risk Factors
Key Strengths ✓
- Debt-Free Balance Sheet: Zero long-term debt provides financial flexibility, though this advantage is offset by cash burn.
- No Promoter Pledging: Absence of pledged shares eliminates one source of financial risk.
- Cash Reserves: Closing cash of ₹9.00 crores in FY25 provides temporary runway, though depleting rapidly.
- Stable Promoter Holding: 56.26% promoter stake has remained unchanged, suggesting commitment despite challenges.
- Sector Outperformance: One-year stock return of 6.06% beats the media sector's -12.88%, though driven by low base effects.
Key Concerns ⚠
- Complete Revenue Collapse: Zero sales for three consecutive quarters represents total operational shutdown—the most critical concern.
- Accelerating Losses: Q3 FY26 loss of ₹3.68 crores is the worst quarterly performance, indicating deteriorating cost control.
- Negative Returns: ROE of -7.30% and ROCE of -4.16% demonstrate systematic value destruction.
- Zero Institutional Interest: Complete absence of FII, mutual fund, and insurance holdings signals lack of investment appeal.
- Finite Cash Runway: With quarterly burn rates accelerating and no revenue, cash reserves will deplete within 2-3 quarters at current pace.
- Bearish Technicals: Stock below all moving averages with negative momentum indicators.
- Obsolete Business Model: Traditional TV content production model has lost relevance in digital-first media landscape.
Outlook: What to Watch
Positive Catalysts
- Revenue Resumption: Any sign of commissioned programming deals or new business wins would be material positive.
- Strategic Partnership: Tie-ups with OTT platforms or digital content creators could provide new revenue streams.
- Cost Restructuring: Aggressive cost reduction to align with zero-revenue reality could extend cash runway.
- Asset Monetisation: Sale of intellectual property, real estate, or other assets could unlock value.
Red Flags
- Fourth Consecutive Zero-Revenue Quarter: If Q4 FY26 also shows no sales, operational viability becomes untenable.
- Further Loss Acceleration: Quarterly losses exceeding ₹3.68 crores would severely compress cash runway.
- Promoter Stake Reduction: Any decrease in 56.26% promoter holding would signal loss of confidence.
- Going Concern Doubts: Auditor qualifications about going concern status would be terminal for investment case.
- Cash Depletion: Quarterly cash balance falling below ₹5.00 crores would raise liquidity crisis concerns.
The Verdict: A Distressed Asset with No Clear Path Forward
Creative Eye Ltd.'s Q3 FY26 results confirm what the market has increasingly suspected—this is a company in severe operational distress with no visible path to recovery. The complete absence of revenue for three consecutive quarters, coupled with accelerating losses and depleting cash reserves, makes this an uninvestable proposition for all but the most speculative turnaround investors. The company's traditional television content production business model appears obsolete in today's digital-first media landscape, and management has demonstrated no ability to pivot or adapt.
Whilst the debt-free balance sheet and cash reserves provide temporary breathing room, the current quarterly burn rate of ₹3.68 crores suggests this runway is finite—perhaps 2-3 quarters at best without operational improvements. The absence of any institutional interest, combined with bearish technical indicators and a proprietary score of just 12 out of 100, reinforces the strong sell recommendation. For existing shareholders, the Q3 FY26 results should serve as a catalyst to exit before further value erosion occurs.
Investment Verdict
Score: 12/100
For Fresh Investors: Avoid entirely. With zero revenue generation, accelerating losses, and no credible turnaround plan, Creative Eye represents a value trap. The company's operational paralysis and obsolete business model make it uninvestable at any price until fundamental operational improvements materialise.
For Existing Holders: Exit immediately. The Q3 FY26 results confirm the company is in terminal decline with no near-term catalysts for recovery. The risk of further value erosion far outweighs any speculative turnaround potential. Use any price recovery as an opportunity to liquidate holdings.
Fair Value Estimate: ₹3.50-4.00 (43-50% downside risk from current ₹7.00), assuming liquidation value of net assets minus ongoing cash burn. Operational recovery scenarios appear remote given three quarters of zero revenue.
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 is not indicative of future results, and all investments carry risk of loss.
