The micro-cap NBFC, formerly known as Kirti Finvest Limited and incorporated in 1980, has seen its business model unravel with alarming speed. Revenue for Q3 FY26 collapsed to a mere ₹0.04 crores, down 95.96% year-on-year from ₹0.99 crores and down 60.00% sequentially from Q2 FY26's ₹0.10 crores. This revenue evaporation has exposed the company to catastrophic operating leverage, with operating losses before other income reaching ₹2.79 crores—the worst quarterly performance in recent history.
Financial Performance: A Spiral Into Losses
The quarterly income statement paints a picture of a business in complete disarray. Net sales have been on a relentless downward trajectory, falling from ₹7.03 crores in Q4 FY25 to just ₹0.04 crores in Q3 FY26. This represents a 99.43% collapse in just three quarters. The company's inability to generate meaningful revenue has resulted in operating margins that defy conventional financial metrics—Q3 FY26's operating margin stood at an incomprehensible -6,975.0%, compared to -37.37% in Q3 FY25.
| Quarter | Net Sales (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | YoY Change | PAT Margin |
|---|---|---|---|---|---|
| Dec'25 (Q3) | 0.04 | ▼ 60.00% | -2.78 | ▼ 672.22% | -6,950.0% |
| Sep'25 (Q2) | 0.10 | ▼ 23.08% | -1.24 | ▼ 416.67% | -1,240.0% |
| Jun'25 (Q1) | 0.13 | ▼ 98.15% | -0.62 | ▼ 51.22% | -476.92% |
| Mar'25 (Q4) | 7.03 | ▲ 610.10% | 1.16 | — | 16.5% |
| Dec'24 (Q3) | 0.99 | ▲ 110.64% | -0.36 | — | -36.36% |
| Sep'24 (Q2) | 0.47 | ▲ 213.33% | -0.24 | — | -51.06% |
| Jun'24 (Q1) | 0.15 | — | -0.41 | — | -273.33% |
The company's profitability metrics have deteriorated across all dimensions. PAT margin for Q3 FY26 stood at -6,950.0%, whilst gross profit margin mirrored this catastrophic performance. Employee costs, whilst relatively stable at ₹0.03 crores, now represent 75% of the company's meagre revenues. Other income of ₹0.01 crores provided minimal cushioning against the operational haemorrhaging.
The full-year FY25 results offer little solace, with net sales of ₹8.00 crores generating zero operating profit and zero profit after tax. This breakeven annual performance now appears optimistic compared to the current quarterly trajectory.
Critical Concern: Revenue Collapse
The 95.96% year-on-year revenue decline in Q3 FY26 represents a near-total business evaporation. With quarterly sales of just ₹0.04 crores, the company is operating at a scale that cannot support even basic corporate infrastructure. The absence of any meaningful lending or investment activity suggests a fundamental breakdown in the NBFC's core business model.
Operational Challenges: A Business Model in Collapse
The operational metrics reveal a company struggling with existential challenges. Return on equity has turned deeply negative at -3.60% for the latest period, down from an already weak average of 1.09%. This represents active destruction of shareholder value, with the company consuming capital rather than generating returns. For an NBFC, this level of ROE performance signals fundamental business model failure.
The balance sheet as of March 2025 showed shareholder funds of ₹19.66 crores, comprising share capital of ₹8.55 crores and reserves of ₹3.61 crores. With current assets of ₹16.31 crores and fixed assets of ₹4.24 crores, the company maintains a relatively liquid position. However, the rapid cash burn evidenced by mounting quarterly losses threatens this stability. Long-term debt stood at ₹0.90 crores, representing minimal leverage—a debt-to-equity ratio of effectively zero.
The cash flow statement for FY25 revealed negative operating cash flow of ₹3.00 crores, partially offset by financing inflows of ₹2.00 crores, resulting in net cash outflow of ₹1.00 crores. With closing cash at zero, the company's liquidity position has become precarious precisely when operational losses are accelerating.
Asset Quality: Limited Lending Activity
Unlike traditional NBFCs with substantial loan books, Epuja Spiritech's balance sheet reveals minimal lending activity. Investments stood at just ₹0.03 crores as of March 2025, suggesting the company has largely ceased its core financing operations. This absence of income-generating assets explains the revenue collapse and raises serious questions about the company's future viability as a going concern.
Industry Context: Underperforming a Thriving Sector
The NBFC sector has delivered robust returns of 23.77% over the past year, making Epuja Spiritech's 50.84% decline particularly stark. Whilst peers have benefited from strong credit growth, improving asset quality, and expanding net interest margins, Epuja Spiritech has moved in the opposite direction. The company's struggles appear company-specific rather than sector-wide, suggesting internal operational failures rather than adverse industry dynamics.
The broader NBFC industry has seen healthy AUM growth, strong disbursement momentum, and stable asset quality metrics. Regulatory tailwinds and robust economic activity have supported sector performance. Epuja Spiritech's inability to participate in this favourable environment highlights the severity of its operational challenges.
Peer Comparison: Lagging on All Metrics
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Epuja Spiritech | NA (Loss Making) | 0.85x | 1.09% | 0.00x | NA |
| Richfield Fin | 42.90x | 2.67x | 3.92% | 4.97x | NA |
| TTI Enterprise | 41.08x | 0.85x | 2.68% | 0.04x | NA |
| Visagar Finan. | NA (Loss Making) | 0.38x | 2.51% | 0.65x | NA |
| MPIL Corporation | NA (Loss Making) | 1.57x | 0.0% | -0.27x | 0.11% |
| Paragon Finance | 7.74x | 0.70x | 4.38% | 0.02x | NA |
The peer comparison reveals Epuja Spiritech's profound underperformance. Its ROE of 1.09% trails all profitable peers, with Paragon Finance achieving 4.38% and Richfield Fin posting 3.92%. The company's loss-making status prevents meaningful P/E comparison, whilst its price-to-book ratio of 0.85x—whilst appearing cheap—reflects justified scepticism about asset quality and earning power. Among the peer group of six NBFCs, Epuja Spiritech ranks last by market capitalisation at ₹21.00 crores.
Valuation Analysis: Cheap for a Reason
At a current price of ₹2.34, Epuja Spiritech trades at 0.85 times book value—a 15% discount to stated net asset value of ₹1.42 per share. However, this apparent discount offers little comfort given the company's loss-making status and deteriorating fundamentals. The stock's valuation grade stands at "Very Expensive" according to proprietary metrics, a seemingly contradictory assessment that reflects the mismatch between price and non-existent earnings.
With no earnings to support a P/E multiple and minimal dividend history (last dividend of ₹0.02 per share paid in September 2019), traditional valuation frameworks break down. The enterprise value to EBITDA multiple of -17.41x reflects negative EBITDA, whilst EV to sales of 2.11x appears elevated given the absence of profitability and sustainability concerns.
Valuation Dashboard
P/E Ratio (TTM): NA (Loss Making)
Price to Book: 0.85x
EV/EBITDA: -17.41x
Dividend Yield: NA
Valuation Grade: Very Expensive
Overall Score: 3/100 (Strong Sell)
The stock has declined 58.21% from its 52-week high of ₹5.60, reached earlier in the fiscal year, to the current level of ₹2.34. The 52-week low of ₹1.98 provides minimal downside cushion of just 18.18%. Given the accelerating rate of deterioration in Q3 FY26, further downside appears likely absent a dramatic operational turnaround.
Shareholding Pattern: Promoters Reducing Stake
| Quarter | Promoter % | QoQ Change | FII % | Public % |
|---|---|---|---|---|
| Dec'25 (Q3) | 8.03% | 0.00% | 0.38% | 91.59% |
| Sep'25 (Q2) | 8.03% | ▼ 2.44% | 0.38% | 91.59% |
| Jun'25 (Q1) | 10.47% | ▼ 0.15% | 0.50% | 89.03% |
| Mar'25 (Q4) | 10.62% | ▼ 0.34% | 0.51% | 88.88% |
| Dec'24 (Q3) | 10.96% | — | 0.52% | 88.52% |
The shareholding pattern reveals a troubling exodus of promoter confidence. Promoter holding has declined from 10.96% in December 2024 to just 8.03% by December 2025—a 2.93 percentage point reduction over four quarters. The most significant reduction occurred in Q2 FY26, when promoters reduced their stake by 2.44 percentage points. This sustained reduction in promoter ownership during a period of mounting losses sends a decidedly negative signal about insider confidence in the company's prospects.
Institutional participation remains negligible, with FII holdings at just 0.38% and zero mutual fund or insurance company interest. The absence of institutional investors reflects the company's micro-cap status, limited liquidity, and poor fundamental performance. Non-institutional investors hold 91.59% of shares, suggesting a predominantly retail shareholder base with limited sophistication.
Stock Performance: Severe Underperformance Across All Timeframes
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -5.26% | -0.85% | -4.41% |
| 1 Month | +10.38% | -0.90% | +11.28% |
| 3 Months | -46.70% | -1.90% | -44.80% |
| 6 Months | -38.42% | +2.90% | -41.32% |
| YTD | -16.73% | -2.75% | -13.98% |
| 1 Year | -50.84% | +8.85% | -59.69% |
| 2 Years | -57.45% | +15.82% | -73.27% |
| 3 Years | +19.39% | +37.14% | -17.75% |
The stock's performance has been catastrophic across nearly all timeframes. Over the past year, Epuja Spiritech has declined 50.84% whilst the Sensex gained 8.85%—negative alpha of 59.69 percentage points. The three-month return of -46.70% coincides with the accelerating financial deterioration visible in Q2 and Q3 FY26 results. Year-to-date, the stock is down 16.73%, underperforming the Sensex by 13.98 percentage points.
The stock trades below all key moving averages—5-day (₹2.53), 20-day (₹2.64), 50-day (₹3.00), 100-day (₹3.47), and 200-day (₹3.44)—signalling sustained technical weakness. The technical trend turned "Bearish" on January 30, 2026, at ₹3.00, reflecting the market's recognition of deteriorating fundamentals. With a beta of 1.50, the stock exhibits high volatility, amplifying both gains and losses relative to the broader market.
Investment Thesis: Multiple Red Flags
The investment case for Epuja Spiritech has deteriorated to the point where meaningful recovery appears improbable without fundamental business restructuring. The company's proprietary Mojo score stands at just 3 out of 100, firmly in "Strong Sell" territory. This assessment reflects the convergence of negative factors across all key dimensions: valuation (risky), quality (below average), financial trend (negative), and technical trend (bearish).
The quality grade of "Below Average" reflects the company's weak long-term financial performance, with 5-year sales growth of just 6.43% and 5-year EBIT growth of -178.07%. Average ROE of 1.09% ranks amongst the weakest in the NBFC sector, whilst institutional holdings of just 0.38% signal minimal professional investor interest.
The financial trend has turned decisively negative, with Q3 FY26 marking the lowest quarterly operating profit, profit before tax, and earnings per share in recent history. All key metrics—PAT, PBDIT, operating margin, and EPS—have hit multi-quarter lows, suggesting accelerating rather than stabilising deterioration.
Key Strengths & Risk Factors
KEY STRENGTHS
- Minimal Debt: Debt-to-equity ratio near zero limits financial risk from leverage
- Liquid Balance Sheet: Current assets of ₹16.31 crores provide some cushion
- Low Valuation: Trading at 0.85x book value offers theoretical downside protection
- Small Float: Micro-cap status could enable quick turnaround if management acts decisively
- Established Entity: 45-year corporate history since 1980 incorporation
KEY CONCERNS
- Revenue Collapse: Sales down 95.96% YoY to just ₹0.04 crores in Q3 FY26
- Mounting Losses: Net loss of ₹2.78 crores represents 672.22% YoY deterioration
- Negative ROE: -3.60% ROE signals active destruction of shareholder value
- Promoter Exodus: Stake reduced from 10.96% to 8.03% over four quarters
- No Institutional Support: Zero mutual fund or insurance holdings
- Business Model Failure: Minimal lending/investment activity suggests core operations have ceased
- Cash Burn: Negative operating cash flow with zero closing cash position
- Technical Weakness: Bearish trend, trading below all moving averages
Outlook: What to Watch
POSITIVE CATALYSTS (Low Probability)
- Management announces concrete business revival plan with capital infusion
- Strategic investor or acquirer emerges to restructure operations
- Q4 FY26 shows stabilisation in revenue decline trajectory
- Company pivots to new business model with demonstrable traction
- Promoters reverse course and increase stake meaningfully
RED FLAGS (High Probability)
- Q4 FY26 losses accelerate beyond Q3's ₹2.78 crores
- Revenue continues sub-₹0.10 crores quarterly run rate
- Promoters reduce stake below 8% threshold
- Cash position deteriorates forcing dilutive capital raise
- Company announces suspension of operations or restructuring
- Stock breaks below 52-week low of ₹1.98
The forward outlook remains deeply concerning. With no visible signs of operational recovery and accelerating quarterly deterioration, the company faces existential challenges. The absence of meaningful revenue generation, combined with ongoing cash burn, raises questions about viability as a going concern. Unless management announces a credible turnaround plan backed by capital infusion and concrete operational initiatives, further deterioration appears likely.
The NBFC sector's favourable tailwinds have not translated into any benefit for Epuja Spiritech, suggesting company-specific rather than sector-wide challenges. The 74.61 percentage point underperformance versus the NBFC sector over the past year underscores this company-specific distress.
The Verdict: Exit Recommended
Score: 3/100
For Fresh Investors: Avoid entirely. The combination of collapsing revenues, mounting losses, negative cash flow, promoter stake reduction, and deteriorating financial trends creates an exceptionally unfavourable risk-reward profile. The micro-cap nature and limited liquidity amplify downside risks.
For Existing Holders: Consider exiting positions to preserve capital. The Q3 FY26 results represent an acceleration of negative trends rather than stabilisation. With the stock down 50.84% over the past year and fundamentals deteriorating further, holding exposes investors to continued value destruction. The absence of any credible turnaround plan or operational improvement makes recovery scenarios highly speculative.
Fair Value Estimate: Not applicable given loss-making status and business model concerns. Current price of ₹2.34 appears to reflect fundamental distress, with further downside risk towards the 52-week low of ₹1.98 or below absent immediate operational stabilisation.
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. Investments in micro-cap stocks carry substantial risks including limited liquidity, high volatility, and potential for total loss of capital.
