The December 2025 quarter marked a continuation of the company's operational struggles, with revenue declining not just sequentially but also on a year-on-year basis by 17.54% from ₹1.71 crores in December 2024. The PAT margin stood at a deeply negative 21.28%, reflecting the company's inability to achieve operational breakeven despite cost rationalisation efforts. The stock, trading at ₹3.68 as of February 12, 2026, has declined 2.90% in a single day and is down 36.11% over the past year, significantly underperforming the Sensex's 10.20% gain during the same period.
Diligent Media's negative book value of ₹243.76 crores as of March 2025 and long-term debt of ₹436.27 crores paint a picture of a company grappling with fundamental structural challenges. The promoter holding remains stable at 62.17%, whilst institutional participation is minimal at just 4.00% FII holdings and zero mutual fund or insurance company presence, signalling limited investor confidence in the turnaround story.
| Quarter | Dec'25 | Sep'25 | Jun'25 | Mar'25 | Dec'24 | Sep'24 | Jun'24 |
|---|---|---|---|---|---|---|---|
| Net Sales (₹ Cr) | 1.41 | 2.69 | 0.79 | 5.66 | 1.71 | 2.85 | 2.96 |
| QoQ Growth | -47.58% | +240.51% | -86.04% | +230.99% | -40.00% | -3.72% | — |
| Net Profit (₹ Cr) | -0.30 | -0.67 | -1.89 | 3.98 | 2.54 | 4.64 | 2.45 |
| Operating Margin (Excl OI) | -25.53% | -23.79% | -234.18% | 47.17% | -126.90% | 36.49% | -13.51% |
| PAT Margin | -21.28% | -24.91% | -239.24% | 70.32% | 148.54% | 162.81% | 82.77% |
Financial Performance: Persistent Operational Losses
Diligent Media's Q3 FY26 financial performance reveals a company struggling to maintain revenue stability, let alone achieve profitability. Net sales of ₹1.41 crores in Q3 FY26 represent a dramatic 47.58% sequential decline from Q2 FY26's ₹2.69 crores, and a 17.54% year-on-year decrease from December 2024's ₹1.71 crores. This volatility in top-line performance underscores the absence of sustainable revenue streams in the company's media operations.
The operating profit (PBDIT) excluding other income stood at a negative ₹0.36 crores in Q3 FY26, translating to an operating margin of negative 25.53%. Whilst this represents a marginal improvement from Q2 FY26's negative 23.79% margin, it remains deeply in loss-making territory. Employee costs of ₹0.86 crores consumed 60.99% of total revenue in the quarter, highlighting the fixed-cost burden relative to the company's limited revenue base. The company's inability to scale revenues whilst maintaining a relatively fixed cost structure continues to be a critical operational challenge.
Other income of ₹0.15 crores in Q3 FY26 provided some cushion but was substantially lower than the ₹5.07 crores recorded in December 2024, which had artificially inflated that quarter's profitability. The net loss of ₹0.30 crores in Q3 FY26, whilst narrower than Q2 FY26's ₹0.67 crores loss, reflects the company's persistent inability to achieve operational breakeven. The PAT margin of negative 21.28% in Q3 FY26 compares unfavourably to the positive 148.54% margin in December 2024, which was boosted by exceptional other income.
Operational Challenges: Structural Headwinds Persist
The company's operational metrics reveal fundamental challenges that extend beyond cyclical industry headwinds. With an average ROCE of just 5.14% and an ROE that cannot be meaningfully calculated due to negative shareholder funds of ₹243.76 crores as of March 2025, Diligent Media lacks the capital efficiency metrics that characterise healthy businesses. The latest ROCE for Q3 FY26 stands at negative 1.11%, reflecting the company's inability to generate returns on the capital employed in its operations.
The balance sheet structure presents a particularly concerning picture. Long-term debt of ₹436.27 crores has remained unchanged since March 2020, whilst shareholder funds have deteriorated from negative ₹533.29 crores in March 2020 to negative ₹243.76 crores in March 2025. The company's book value per share stands at a deeply negative ₹20.71, indicating that liabilities far exceed assets. Current assets of ₹224.25 crores as of March 2025 provide some liquidity buffer, but the company's persistent operational losses continue to erode this cushion.
Fixed assets have declined precipitously from ₹176.88 crores in March 2020 to just ₹0.07 crores in March 2025, suggesting either aggressive asset disposals or write-downs. The company maintains zero investments on its books, and current liabilities of ₹39.15 crores as of March 2025 include trade payables of ₹1.91 crores. The debt-to-EBITDA ratio averaging 16.48 times indicates an unsustainable leverage position, though the company's net debt to equity of negative 1.77 suggests it maintains some cash balances despite the overall negative equity position.
Critical Operational Concerns
Negative Book Value: Shareholder funds of negative ₹243.76 crores indicate liabilities substantially exceed assets, reflecting years of accumulated losses.
Volatile Revenue: Sales swung from ₹0.79 crores in Jun'25 to ₹5.66 crores in Mar'25, then collapsed to ₹1.41 crores in Dec'25, indicating absence of stable revenue streams.
High Fixed Costs: Employee costs consistently consume 50-60% of revenues, creating operational leverage that magnifies losses during revenue downturns.
Industry Context: Print Media's Structural Decline
Diligent Media operates in the challenging media and entertainment sector, specifically in print journalism through its DNA newspaper brand. The Indian print media industry has faced sustained structural headwinds over the past decade as advertising revenues have migrated to digital platforms and readership patterns have shifted towards online news consumption. The company's persistent inability to achieve scale or profitability reflects these broader industry challenges, compounded by its micro-cap status and limited financial resources to invest in digital transformation.
The company's 5-year sales growth of 50.83% appears impressive on the surface but is misleading given the extremely low base of ₹1.00 crore in revenues in March 2020. More concerning is the 5-year EBIT growth of negative 209.30%, indicating that revenue growth has not translated into operational profitability. The company's tax ratio is negative, reflecting its loss-making status, and it has paid zero dividends, with no dividend payout ratio to speak of.
Institutional participation remains negligible, with just 4.00% FII holdings and zero presence from mutual funds or insurance companies. This absence of institutional support signals limited confidence in the company's turnaround prospects. The promoter pledging of 12.07% of shares adds another layer of concern, suggesting promoters may be facing financial pressures themselves. With just 11 FII investors and one mutual fund showing any interest, the stock lacks the institutional backing typically required for a successful restructuring.
Peer Comparison: Weakest Amongst Struggling Peers
Comparing Diligent Media to its peers in the media and entertainment sector reveals a group of companies collectively facing significant challenges, with Diligent Media positioned amongst the weakest. The peer group includes other micro-cap media companies such as Baweja Studios, Studio LSD, Next Mediaworks, Prit Nandy Communications, and Siti Networks—all struggling with their own operational and financial difficulties.
| Company | P/E (TTM) | P/BV | ROE | Debt to Equity | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Diligent Media | 11.30 | -0.18 | 0.00% | -1.77 | 43.32 |
| Baweja Studios | 7.30 | 0.57 | 7.96% | 0.26 | — |
| Studio LSD | 4.70 | 2.01 | 0.00% | -0.19 | — |
| Next Mediaworks | NA (Loss Making) | -1.53 | 0.00% | -1.37 | — |
| Prit Nandy Comm. | NA (Loss Making) | 0.52 | 0.39% | 0.00 | — |
| Siti Networks | NA (Loss Making) | -0.04 | 0.00% | -0.39 | — |
Diligent Media's P/E ratio of 11.30 times appears reasonable on the surface, but this metric is distorted by the exceptional other income recorded in FY25 that temporarily boosted reported profits. The company's negative price-to-book value of negative 0.18 times reflects its negative book value, positioning it similarly to Next Mediaworks and Siti Networks. The ROE of 0.00% places Diligent Media in line with most peers, though Baweja Studios manages a positive 7.96% ROE, demonstrating that profitability is achievable in the sector for better-managed entities.
The debt-to-equity ratio of negative 1.77 for Diligent Media is somewhat misleading—whilst it suggests the company has net cash, this metric is distorted by the negative equity base. In reality, the company carries ₹436.27 crores of long-term debt against negative shareholder funds. Baweja Studios' modest 0.26 debt-to-equity ratio and Prit Nandy's zero debt position highlight that some peers have managed to maintain cleaner balance sheets despite industry challenges.
Valuation Analysis: Risky at Any Price
Diligent Media's current valuation metrics paint a picture of a company that presents significant risks despite its micro-cap status and seemingly low absolute price of ₹3.68 per share. The stock's valuation grade is classified as "RISKY" by proprietary assessment frameworks, reflecting the fundamental financial distress and uncertain viability of the business model. The company's negative book value makes traditional valuation metrics like price-to-book value meaningless, as the negative 0.18 times P/BV simply reflects that the company's liabilities exceed its assets.
The P/E ratio of 11.30 times appears deceptively reasonable but is based on FY25 earnings that were artificially inflated by ₹13.00 crores of other income—far exceeding the company's operating losses. Excluding this exceptional income, the company would have reported substantial losses for FY25. The EV-to-EBITDA ratio of negative 241.26 times and EV-to-EBIT of negative 229.72 times reflect the company's negative operating profits, rendering these multiples meaningless for valuation purposes.
The EV-to-sales ratio of 44.25 times appears elevated, but given the company's inability to convert sales into profits, this metric provides little comfort. With an enterprise value driven primarily by the ₹436.27 crores of long-term debt and minimal market capitalisation of ₹43.32 crores, the company's valuation reflects distress rather than opportunity. The stock trades 46.74% below its 52-week high of ₹6.91 and just 19.87% above its 52-week low of ₹3.07, indicating it has found a floor but lacks positive catalysts for recovery.
Shareholding Pattern: Stable but Unremarkable
The shareholding pattern of Diligent Media has remained remarkably stable over the past five quarters, with promoter holding steady at 62.17% and no sequential changes across any investor category. The promoter group, led by 25 Fps Media Private Limited (32.22%) and Arm Infra And Utilities Private Limited (29.94%), maintains majority control, though the 12.07% pledging of promoter shares raises concerns about potential financial stress within the promoter group.
| Quarter | Dec'25 | Sep'25 | Jun'25 | Mar'25 | Dec'24 |
|---|---|---|---|---|---|
| Promoter | 62.17% | 62.17% | 62.17% | 62.17% | 62.17% |
| FII | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% |
| Mutual Funds | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional | 33.83% | 33.83% | 33.83% | 33.83% | 33.83% |
FII holdings of 4.00% represent minimal institutional participation, with just 11 foreign institutional investors holding stakes. The complete absence of mutual fund holdings (0.00%) and insurance company participation (0.00%) is particularly telling—these sophisticated institutional investors have chosen to avoid the stock entirely, reflecting their assessment of the company's poor fundamentals and uncertain prospects. The non-institutional holding of 33.83% comprises primarily retail investors who may lack the resources or sophistication to properly assess the company's distressed financial position.
The stability in shareholding pattern over five quarters suggests neither institutional accumulation nor significant retail exit, indicating the stock exists in a state of limbo with limited trading interest. The absence of any sequential changes in any investor category over five consecutive quarters is highly unusual and suggests the stock lacks the liquidity and institutional interest that typically characterises investable securities.
Stock Performance: Severe Underperformance Across All Timeframes
Diligent Media's stock performance has been dismal across virtually all relevant timeframes, with the company significantly underperforming both the broader Sensex and its media and entertainment sector peers. Over the past year, the stock has declined 36.11% whilst the Sensex gained 10.20%, resulting in a negative alpha of 46.31 percentage points. This underperformance is even more pronounced when compared to the media and entertainment sector, which declined 8.21% over the same period—meaning Diligent Media underperformed its sector by 27.90 percentage points.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -2.13% | +0.75% | -2.88% |
| 1 Month | +10.18% | +0.07% | +10.11% |
| 3 Months | -12.80% | -0.63% | -12.17% |
| 6 Months | -26.25% | +4.61% | -30.86% |
| YTD | -4.66% | -1.50% | -3.16% |
| 1 Year | -36.11% | +10.20% | -46.31% |
| 3 Years | +16.83% | +38.32% | -21.49% |
| 5 Years | +390.67% | +62.85% | +327.82% |
The only bright spot in the returns profile is the 1-month performance, where the stock gained 10.18% compared to the Sensex's 0.07% gain, generating a positive alpha of 10.11 percentage points. However, this recent bounce appears to be a technical rebound from oversold levels rather than a fundamental improvement, as the 3-month and 6-month returns remain deeply negative at negative 12.80% and negative 26.25% respectively.
The longer-term picture is mixed. Over three years, the stock has gained 16.83% but underperformed the Sensex's 38.32% gain by 21.49 percentage points. The 5-year return of 390.67% appears impressive but is misleading—this reflects recovery from an extremely depressed base in 2021 when the stock traded at distressed valuations. The stock's beta of 1.50 indicates it is 50% more volatile than the broader market, classified as a "High Beta Stock" that amplifies both gains and losses.
From a technical perspective, the stock is currently in a "BEARISH" trend that began on January 20, 2026, at ₹3.86. The stock trades below all key moving averages—5-day (₹3.72), 20-day (₹3.66), 50-day (₹3.81), 100-day (₹4.08), and 200-day (₹4.50)—indicating sustained selling pressure. Technical indicators including MACD, KST, and Bollinger Bands all flash bearish signals, with immediate support at the 52-week low of ₹3.07 and resistance at ₹3.66.
Investment Thesis: Multiple Red Flags Overwhelm Limited Positives
The investment thesis for Diligent Media is overwhelmingly negative, with the company's proprietary Mojo Score of just 12 out of 100 reflecting a "STRONG SELL" rating. This score is derived from a comprehensive assessment across four key parameters: valuation (classified as "RISKY"), quality (graded as "BELOW AVERAGE"), financial trend (rated as "FLAT"), and technical trend (currently "BEARISH"). Each of these parameters points to significant concerns that collectively make the stock unsuitable for investment.
The quality assessment reveals a company with weak fundamentals across multiple dimensions. The 5-year EBIT growth of negative 209.30% indicates deteriorating operational performance despite revenue growth. The average ROCE of 5.14% and average ROE of 0.00% demonstrate poor capital efficiency, whilst the negative book value of ₹243.76 crores reflects years of accumulated losses. The company's high debt-to-EBITDA ratio of 16.48 times and minimal institutional holdings of just 4.00% further underscore the quality concerns.
The flat financial trend in the most recent quarter (December 2025) reflects the company's inability to achieve sustainable operational improvement. Whilst the net loss of ₹0.30 crores in Q3 FY26 was narrower than Q2 FY26's ₹0.67 crores loss, the revenue collapse of 47.58% quarter-on-quarter and persistent negative operating margins indicate the company remains far from achieving viability. The bearish technical trend and stock's position below all moving averages suggest market participants expect further deterioration rather than improvement.
Key Strengths
- Established Brand: DNA newspaper has some brand recognition in Mumbai market, though declining relevance
- Stable Promoter Holding: 62.17% promoter stake provides management continuity, though pledging raises concerns
- Some Cash Buffer: Current assets of ₹224.25 crores provide temporary liquidity cushion
- Long-term Growth: 5-year sales CAGR of 50.83% from extremely low base shows some revenue recovery
- Narrowing Losses: Q3 FY26 loss of ₹0.30 crores narrower than Q2 FY26's ₹0.67 crores loss
Key Concerns
- Negative Book Value: Shareholder funds of negative ₹243.76 crores indicate fundamental insolvency
- Persistent Losses: Company has failed to achieve operational breakeven despite years of efforts
- Revenue Volatility: Sales swing wildly quarter-to-quarter, indicating absence of stable business model
- High Debt Burden: ₹436.27 crores long-term debt with no clear path to repayment
- Zero Institutional Support: No mutual fund or insurance holdings signals lack of confidence
- Structural Decline: Print media faces irreversible secular decline as advertising migrates digital
- Promoter Pledging: 12.07% pledged shares suggest promoter financial stress
Outlook: Limited Catalysts for Turnaround
The outlook for Diligent Media remains challenging, with limited positive catalysts visible on the horizon and multiple red flags that investors must monitor closely. The company operates in a structurally declining print media industry with no clear digital transformation strategy or alternative revenue streams to offset the secular decline in newspaper advertising and circulation revenues. The persistent negative operating margins and volatile quarterly revenues suggest the company has yet to identify a viable business model for the current media landscape.
Positive Catalysts
- Successful digital transformation strategy if implemented
- Asset monetisation to reduce debt burden
- Strategic partnership or acquisition by larger media entity
- Aggressive cost restructuring to achieve breakeven
Red Flags to Monitor
- Further revenue declines in coming quarters
- Continued cash burn depleting current assets
- Increased promoter pledging or stake sales
- Debt restructuring or default scenarios
- Further deterioration in operating margins
- Complete absence of institutional buying interest
For the company to achieve any meaningful recovery, it would need to demonstrate sustained revenue growth, achieve positive operating margins, and develop a credible digital strategy to offset print media decline. None of these appear likely in the near to medium term based on recent quarterly performance. The company's negative book value and high debt burden mean that even a return to profitability would take years to repair the balance sheet to acceptable levels.
The Verdict: Exit Positions and Avoid Fresh Investments
Score: 12/100
For Fresh Investors: Avoid entirely. The company's negative book value, persistent operational losses, minimal institutional support, and exposure to structurally declining print media make this an unsuitable investment at any price. The numerous red flags—including ₹436.27 crores of debt, volatile revenues, and complete absence of mutual fund holdings—indicate this is a distressed situation rather than a turnaround opportunity.
For Existing Holders: Exit positions on any technical bounce. The stock's current price of ₹3.68 is just 19.87% above its 52-week low of ₹3.07, and the bearish technical trend suggests further downside risk. With the company showing no signs of achieving operational viability and the print media industry facing irreversible secular decline, holding this stock exposes investors to significant permanent capital loss risk.
Fair Value Estimate: Not applicable. Traditional valuation frameworks cannot be meaningfully applied to a company with negative book value and persistent operational losses. The stock's value is essentially a liquidation scenario, and even that appears unfavourable given liabilities far exceed assets.
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.
