Trading at ₹76.00 with a market capitalisation of ₹283.00 crores, GTT Data Solutions represents a high-risk proposition in the media and entertainment sector. The stock has delivered extraordinary long-term returns—up 3,938.10% over three years and 7,071.48% over five years—yet faces mounting fundamental challenges that question the sustainability of its recent operational pivot. With a Mojo Score of just 23 out of 100 and a "STRONG SELL" advisory, the company's transformation story remains unconvincing to fundamental analysts.
Financial Performance: Topline Explosion, Bottom Line Implosion
The quarter ended December 2025 showcased GTT Data Solutions' most dramatic revenue performance yet, with net sales reaching ₹42.15 crores—a staggering 818.30% increase year-on-year and 14.63% sequential growth from Q2 FY26's ₹36.77 crores. This represents the company's highest-ever quarterly revenue since its transformation from an advertising film production house to a data solutions provider.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Consolidated PAT (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|
| Dec'25 (Q3) | 42.15 | +14.63% | +818.30% | -1.94 | -4.34% |
| Sep'25 (Q2) | 36.77 | +44.54% | +938.70% | -1.05 | -2.96% |
| Jun'25 (Q1) | 25.44 | +406.77% | +734.10% | -4.52 | -16.16% |
| Mar'25 (Q4) | 5.02 | +9.37% | — | -4.00 | -83.07% |
| Dec'24 (Q3) | 4.59 | +29.66% | — | -1.06 | -22.00% |
| Sep'24 (Q2) | 3.54 | +16.07% | — | -0.89 | -18.93% |
| Jun'24 (Q1) | 3.05 | — | — | -1.07 | -40.00% |
However, the revenue surge has not translated into operational efficiency. Operating profit before depreciation, interest, tax, and other income (PBDIT excl OI) collapsed to just ₹0.32 crores in Q3 FY26, yielding a wafer-thin operating margin of 0.76%—down sharply from 4.35% in Q2 FY26. This margin compression occurred despite the topline expansion, suggesting severe cost pressures and operational inefficiencies.
Employee costs surged to ₹13.30 crores in Q3 FY26, up 22.47% sequentially and representing 31.55% of net sales. Depreciation remained elevated at ₹1.91 crores, whilst interest costs climbed to ₹0.53 crores. The combination of rising operating expenses, substantial depreciation charges, and interest burden pushed the company deeper into losses, with profit before tax at -₹1.82 crores.
Operational Challenges: Margin Erosion and Quality Concerns
The fundamental weakness in GTT Data Solutions' business model becomes evident when examining profitability metrics. The company's average return on equity (ROE) stands at 0.0%, whilst return on capital employed (ROCE) averaged -11.59% over the recent period. The latest quarter shows ROCE at -5.89% and ROE at -7.62%, indicating the company is destroying shareholder value rather than creating it.
Critical Red Flag: Persistent Losses Despite Revenue Growth
GTT Data Solutions has reported losses in every quarter since Jun'24, with cumulative consolidated losses of approximately ₹10.63 crores over the past seven quarters. The company's inability to achieve operating leverage despite an 818.30% year-on-year revenue increase raises serious questions about the scalability and viability of its business model. With gross profit margins at just 0.21% in Q3 FY26, the company operates with virtually no buffer for error.
The balance sheet as of March 2024 reveals shareholder funds of ₹16.83 crores, comprising share capital of ₹19.16 crores and negative reserves of -₹2.34 crores. Fixed assets stood at ₹13.25 crores, whilst current assets totalled ₹6.01 crores. Long-term debt remains minimal at ₹0.12 crores, providing some relief in terms of financial leverage with a net debt-to-equity ratio of just 0.13.
Cash flow dynamics paint a concerning picture. For FY25, the company reported cash outflow from operations of -₹13.00 crores, cash outflow from investing activities of -₹19.00 crores, and cash inflow from financing activities of ₹34.00 crores. This pattern suggests the company is funding operational and capital expenditure losses through external financing—an unsustainable trajectory without a clear path to profitability.
Industry Context: Struggling in a Challenging Sector
The media and entertainment sector in India has faced headwinds, with the broader industry delivering negative returns of -21.61% over the past year. GTT Data Solutions has outperformed its sector peers on a relative basis, posting a one-year return of -0.26%—representing a 21.35 percentage point outperformance versus the sector. However, this relative outperformance masks absolute weakness, as the stock remains essentially flat year-on-year whilst continuing to generate losses.
Transformation Story Under Scrutiny
GTT Data Solutions underwent a significant transformation, changing its name from Cinerad Communications Limited in August 2024 and pivoting from advertising film production to data solutions. Whilst this strategic shift has driven extraordinary revenue growth, the company's operational execution remains deeply flawed. The five-year sales CAGR of 16.20% contrasts sharply with five-year EBIT growth of -143.21%, highlighting deteriorating profitability over time.
The company's quality grade is rated "BELOW AVERAGE" by proprietary assessment frameworks, reflecting weak long-term financial performance. Key quality concerns include average EBIT-to-interest coverage of just -3.51 times, indicating the company's earnings are insufficient to cover interest expenses. The institutional holding of merely 0.02% signals minimal confidence from sophisticated investors.
Peer Comparison: Valuation Premium Without Justification
When compared against media and entertainment peers, GTT Data Solutions trades at a significant premium on price-to-book value despite inferior fundamentals. The company's P/BV ratio of 3.18x substantially exceeds the peer average of approximately 1.30x, whilst its ROE of 0.0% lags behind competitors.
| Company | P/E (TTM) | Div Yield | ROE | Debt/Equity | Price/Book |
|---|---|---|---|---|---|
| GTT Data Solutions | NA (Loss Making) | — | 0.0% | 0.13 | 3.18 |
| H T Media | 10.87 | — | 0.28% | -0.28 | 0.31 |
| Vashu Bhagnani | 128.35 | — | 5.96% | 0.10 | 2.40 |
| Shemaroo Entertainment | NA (Loss Making) | — | 0.64% | 0.75 | 0.82 |
| UFO Moviez | 14.93 | — | 2.57% | -0.11 | 0.94 |
| Cineline India | 30.65 | — | 2.08% | 0.51 | 2.04 |
GTT Data Solutions ranks last amongst its peer group with a market capitalisation of ₹283.00 crores, positioning it as the smallest player in the comparison set. The company's loss-making status prevents meaningful P/E ratio comparison, whilst its absence of dividend payments reflects the financial stress. The elevated P/BV multiple appears unjustified given the company's negative ROE and persistent losses.
Valuation Analysis: Risky Classification Warranted
GTT Data Solutions carries a "RISKY" valuation classification, reflecting the fundamental challenges facing the business. With the company loss-making, traditional earnings-based valuation metrics such as P/E ratio cannot be calculated. The EV/EBITDA multiple stands at -113.60x, whilst EV/Sales reaches 18.24x—both metrics highlighting the disconnect between market valuation and operational reality.
The stock trades at ₹76.00 against a book value per share of ₹5.09, implying investors are paying 14.94 times book value for a company with negative reserves and persistent losses. This valuation appears untenable without a credible path to profitability. The 52-week range of ₹55.15 to ₹101.80 shows significant volatility, with the current price sitting 25.34% below the yearly high.
Shareholding Pattern: Promoter Reduction Raises Questions
The shareholding structure reveals a notable shift in promoter confidence. Promoter holdings declined from 67.85% in March 2025 to 62.05% in June 2025—a reduction of 5.80 percentage points—before stabilising at 62.24% in the most recent quarter. This reduction coincided with a corresponding increase in non-institutional holdings from 32.13% to 37.93%.
| Quarter | Promoter | QoQ Change | FII | Mutual Funds | Non-Institutional |
|---|---|---|---|---|---|
| Dec'25 | 62.24% | 0.00% | 0.00% | 0.01% | 37.74% |
| Sep'25 | 62.24% | +0.19% | 0.00% | 0.01% | 37.74% |
| Jun'25 | 62.05% | 0.00% | 0.01% | 0.01% | 37.93% |
| Apr'25 | 62.05% | -5.80% | 0.01% | 0.01% | 37.93% |
| Mar'25 | 67.85% | — | 0.01% | 0.01% | 32.13% |
Institutional participation remains negligible, with FII holdings at 0.00%, mutual fund holdings at 0.01%, and total institutional holdings at merely 0.02%. The absence of institutional investors signals a lack of confidence from sophisticated market participants who typically conduct thorough due diligence. Positively, there is no promoter pledging, eliminating concerns about forced selling pressure.
Stock Performance: Extraordinary Long-Term Gains, Recent Weakness
GTT Data Solutions has delivered phenomenal long-term returns that defy fundamental logic. The stock has surged 3,938.10% over three years, 7,071.48% over five years, and an astounding 2,023.59% over ten years. These returns significantly outpace the Sensex, generating alpha of 3,899.81 percentage points over three years and 7,008.68 percentage points over five years.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Day | +2.65% | -0.38% | +3.03% |
| 1 Week | +13.52% | +0.72% | +12.80% |
| 1 Month | +8.12% | +0.04% | +8.08% |
| 3 Months | -19.02% | -0.65% | -18.37% |
| 6 Months | +17.27% | +4.59% | +12.68% |
| YTD | -4.22% | -1.53% | -2.69% |
| 1 Year | -0.26% | +10.17% | -10.43% |
| 3 Years | +3,938.10% | +38.29% | +3,899.81% |
| 5 Years | +7,071.48% | +62.80% | +7,008.68% |
However, recent performance tells a different story. The stock has declined 19.02% over three months and is essentially flat over one year at -0.26%, underperforming the Sensex by 10.43 percentage points. Year-to-date, the stock is down 4.22%. The high beta of 1.50 indicates the stock is 50% more volatile than the broader market, with annualised volatility of 53.57%—placing it firmly in the "HIGH RISK" category.
Investment Thesis: Multiple Red Flags Overwhelm Positives
The investment case for GTT Data Solutions rests on shaky foundations. Whilst the company demonstrates impressive topline growth and operates with minimal debt, these positives are overwhelmed by structural profitability challenges, margin erosion, negative returns on capital, and questionable valuation.
Key Strengths & Risk Factors
KEY STRENGTHS ✓
- Explosive Revenue Growth: Net sales surged 818.30% YoY to ₹42.15 crores in Q3 FY26, demonstrating strong market traction
- Low Debt Burden: Minimal long-term debt of ₹0.12 crores and net debt-to-equity ratio of 0.13 reduces financial risk
- No Promoter Pledging: Zero pledged shares eliminate concerns about forced selling pressure
- Extraordinary Long-Term Returns: Stock up 3,938.10% over three years and 7,071.48% over five years
- Sector Outperformance: One-year return of -0.26% outperforms sector by 21.35 percentage points
- Strategic Transformation: Successful pivot from advertising to data solutions driving revenue momentum
KEY CONCERNS ⚠️
- Persistent Losses: Seven consecutive quarters of losses totalling approximately ₹10.63 crores despite revenue growth
- Margin Collapse: Operating margin crashed to 0.76% in Q3 from 4.35% in Q2; PAT margin at -4.34%
- Negative ROE and ROCE: ROE at -7.62% and ROCE at -5.89% indicate value destruction
- Negative Cash Flow from Operations: Cash outflow of -₹13.00 crores in FY25 signals operational stress
- Minimal Institutional Interest: Total institutional holdings of just 0.02% reflect lack of sophisticated investor confidence
- Promoter Stake Reduction: 5.80 percentage point decline in promoter holdings from 67.85% to 62.05% raises questions
- Elevated Valuation: P/BV of 3.18x and EV/Sales of 18.24x unjustified for loss-making company
- High Volatility: Beta of 1.50 and volatility of 53.57% classify stock as high-risk
Outlook: Critical Monitoring Points
POSITIVE CATALYSTS
- Sustained QoQ revenue growth above 15% for three consecutive quarters
- Operating margin expansion to 5%+ demonstrating operational leverage
- Achievement of quarterly profitability (positive PAT) for two consecutive quarters
- Institutional investor participation increasing above 5%
- Positive cash flow from operations for a full fiscal year
RED FLAGS
- Further sequential margin compression below 0.50%
- Additional promoter stake reduction beyond current 62.24%
- Quarterly losses exceeding ₹3.00 crores
- Continued negative cash flow from operations in FY26
- Stock price decline below ₹55.15 (52-week low) on high volumes
The Verdict: Avoid This High-Risk Speculation
Score: 23/100
For Fresh Investors: Avoid entirely. The company's inability to achieve profitability despite 818% revenue growth signals fundamental business model flaws. The elevated valuation (3.18x book value), persistent losses, negative returns on capital, and minimal institutional interest create an unfavourable risk-reward profile. The extraordinary past returns reflect speculation rather than fundamental strength and are unlikely to repeat.
For Existing Holders: Exit positions on any strength. The Q3 results confirm that revenue growth alone cannot salvage a structurally unprofitable business. With seven consecutive quarters of losses, deteriorating margins, and negative cash flows, the company faces existential challenges. The 5.80 percentage point reduction in promoter holdings should concern long-term investors. Consider booking profits given the stock's 3,938% three-year return before fundamental deterioration accelerates.
Fair Value Estimate: ₹38.00 (50% downside from current levels). Based on 7.5x book value for a loss-making micro-cap with weak fundamentals, versus current 14.9x book value. Any fair value estimate remains highly speculative given the absence of earnings and questionable business sustainability.
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 adviser before making any investment decisions. Past performance is not indicative of future results. Investments in micro-cap stocks carry substantial risks including liquidity constraints, high volatility, and potential for total loss of capital.
