The quarterly results paint a troubling picture of a company struggling with operational consistency. After posting a surprising profit of ₹0.37 crores in Q4 FY25 on revenues of ₹2.41 crores, Hemo Organic has failed to generate any meaningful sales in the subsequent two quarters. The company recorded zero revenue in Q2 FY26, identical to Q1 FY26, whilst accumulating losses of ₹0.03 crores and ₹0.09 crores respectively. This pattern of sporadic revenue generation raises serious questions about the sustainability of the business model.
Financial Performance: Erratic Revenue Pattern Signals Operational Distress
Hemo Organic's financial performance in Q2 FY26 reflects a complete absence of business activity. With zero sales recorded, the company incurred employee costs of ₹0.02 crores and other operating expenses, resulting in an operating loss of ₹0.04 crores before depreciation, interest, and tax. The tax credit of ₹0.01 crores (representing a 25.00% tax rate on the loss) reduced the final net loss to ₹0.03 crores.
The quarterly trend reveals extreme inconsistency. Examining the past eight quarters, revenue has been virtually non-existent except for Q4 FY25's anomalous ₹2.41 crores and Q4 FY24's minimal ₹0.02 crores. The company has recorded losses in six of the last seven quarters, with the sole profitable quarter (Q4 FY25) appearing to be an outlier rather than a sustainable turnaround. This pattern suggests the company lacks a stable revenue-generating mechanism.
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | PAT Margin (%) |
|---|---|---|---|
| Sep'25 | 0.00 | -0.03 | 0.0% |
| Jun'25 | 0.00 | -0.09 | 0.0% |
| Mar'25 | 2.41 | 0.37 | 15.35% |
| Dec'24 | 0.00 | -0.13 | 0.0% |
| Sep'24 | 0.00 | -0.08 | 0.0% |
| Jun'24 | 0.00 | 0.00 | 0.0% |
| Mar'24 | 0.02 | -0.23 | -1150.0% |
Balance Sheet Concerns: Negative Net Worth and Rising Liabilities
The company's balance sheet as of March 2025 reveals fundamental structural weaknesses. With shareholder funds standing at negative ₹0.15 crores (equity capital of ₹3.47 crores offset by reserves of negative ₹3.62 crores), Hemo Organic has completely eroded its equity base. The book value per share of negative ₹0.44 indicates that the company owes more than it owns, a red flag for any investor.
Critical Balance Sheet Red Flags
Negative Net Worth: Shareholder funds stand at negative ₹0.15 crores as of March 2025, indicating complete erosion of equity capital. The company's reserves have deteriorated to negative ₹3.62 crores, far exceeding the paid-up capital of ₹3.47 crores. This fundamental weakness makes the company technically insolvent on a book value basis.
Liability Surge: Trade payables have exploded from ₹0.11 crores in March 2024 to ₹3.63 crores in March 2025—a staggering 3,200% increase. Total current liabilities jumped to ₹3.65 crores from just ₹0.14 crores, raising questions about the company's ability to meet short-term obligations.
The dramatic increase in trade payables from ₹0.11 crores to ₹3.63 crores between March 2024 and March 2025 is particularly alarming. This 3,200% surge suggests the company may be delaying payments to suppliers, potentially indicating severe liquidity stress. Current assets stood at ₹4.69 crores as of March 2025, providing a current ratio of approximately 1.28, which offers minimal comfort given the negative equity position.
The company carries long-term debt of ₹1.23 crores, though the debt-to-equity ratio is meaningless given the negative shareholder funds. More concerning is the absence of any meaningful fixed assets or investments on the balance sheet, suggesting the company has no substantial productive capacity. The average return on equity (ROE) of 0.0% and return on capital employed (ROCE) of negative 8.05% underscore the company's inability to generate returns for shareholders.
Operational Inconsistency: Business Model Under Question
Hemo Organic's operational track record raises fundamental questions about its business viability. The company, which claims to be engaged in white coal production and ayurvedic medicines, has demonstrated no consistent ability to generate revenue. Over the past seven quarters, only one quarter (Q4 FY25) recorded meaningful sales, and even that appears to be an isolated transaction rather than evidence of ongoing operations.
The Revenue Mystery
The company's revenue pattern defies logical explanation. After recording virtually no sales for multiple quarters, Q4 FY25 suddenly showed ₹2.41 crores in revenue with a healthy 15.35% PAT margin. This was followed immediately by two quarters of zero sales. Such extreme volatility suggests either project-based work with no recurring revenue, or potential accounting irregularities that warrant scrutiny. For a company claiming to operate in manufacturing and trading, the complete absence of consistent sales is highly unusual.
The five-year sales growth rate of 239.00%, whilst appearing impressive on paper, is essentially meaningless given the minuscule base and sporadic nature of revenue generation. The company's annual revenue for FY25 was just ₹2.00 crores, with zero revenue in the previous four fiscal years. This is not growth—it is intermittent activity masquerading as a business.
Peer Comparison: Last in a Struggling Sector
Within the Trading & Distributors sector, Hemo Organic ranks poorly against its peers. The company's market capitalisation of ₹4.00 crores places it at the bottom tier, with minimal institutional interest. The complete absence of FII, mutual fund, insurance, and other DII holdings (all at 0.00%) reflects the market's lack of confidence in the company's prospects.
| Company | P/E (TTM) | ROE (%) | Debt/Equity | Price/Book |
|---|---|---|---|---|
| Hemo Organic | 26.30 | 0.0% | -1.47 | -4.21 |
| Yarn Syndicate | NA (Loss Making) | 0.0% | 0.22 | 0.33 |
| Beeyu Overseas | NA (Loss Making) | 0.0% | -0.01 | 4.23 |
| Diksha Greens | NA (Loss Making) | 0.0% | -0.85 | -0.07 |
The peer comparison reveals that Hemo Organic is trading at a P/E ratio of 26.30x despite having zero ROE and negative book value. This valuation appears disconnected from fundamentals, likely driven by speculative trading rather than investment merit. The negative price-to-book ratio of -4.21x indicates the stock is trading at more than four times its negative book value—a valuation that makes no economic sense.
Shareholding Pattern: Promoter Stability Amidst Operational Chaos
One of the few stable aspects of Hemo Organic is its shareholding pattern. Promoter holding has remained constant at 16.85% over the past five quarters, with no sequential changes. The promoter group comprises Dineshbhai Shanabhai Patel (15.49%) and Sonalben Dineshbhai Patel (1.36%), with zero pledging of shares—a positive indicator of promoter commitment, at least on paper.
| Quarter | Promoter % | FII % | MF % | Non-Institutional % |
|---|---|---|---|---|
| Sep'25 | 16.85% | 0.00% | 0.00% | 83.15% |
| Jun'25 | 16.85% | 0.00% | 0.00% | 83.15% |
| Mar'25 | 16.85% | 0.00% | 0.00% | 83.15% |
| Dec'24 | 16.85% | 0.00% | 0.00% | 83.15% |
| Sep'24 | 16.85% | 0.00% | 0.00% | 83.15% |
However, the low promoter holding of just 16.85% raises governance concerns. With over 83% of shares in non-institutional hands, the stock is susceptible to manipulation and extreme volatility. The complete absence of institutional investors (FII, mutual funds, insurance companies all at 0.00%) speaks volumes about professional investors' assessment of the company's prospects.
Stock Performance: Extreme Volatility Masks Long-Term Decline
Hemo Organic's stock has exhibited extreme short-term volatility whilst delivering poor long-term returns. The stock surged 46.44% over the past week and 56.90% over the past month, reaching ₹12.74 as of November 18, 2025. However, these recent gains must be viewed in the context of severe long-term underperformance.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +46.44% | +0.96% | +45.48% |
| 1 Month | +56.90% | +0.86% | +56.04% |
| 3 Months | +42.35% | +4.18% | +38.17% |
| 6 Months | +39.23% | +2.85% | +36.38% |
| YTD | +2.25% | +8.36% | -6.11% |
| 1 Year | +15.82% | +9.48% | +6.34% |
| 3 Years | -12.74% | +37.31% | -50.05% |
| 5 Years | -19.62% | +91.65% | -111.27% |
| 10 Years | -49.04% | +232.28% | -281.32% |
Over three years, the stock has declined 12.74% whilst the Sensex gained 37.31%, generating negative alpha of -50.05%. The five-year and 10-year pictures are even grimmer, with losses of 19.62% and 49.04% respectively, vastly underperforming the broader market. The stock's beta of 1.50 indicates it is 50% more volatile than the market, with a risk-adjusted return of just 0.19 over the past year despite volatility of 84.87%—classifying it as a "high risk, medium return" investment.
"Recent price surges appear driven by speculation rather than fundamentals, with the stock exhibiting classic signs of manipulation in a low-liquidity, micro-cap environment."
Technical Analysis: Mildly Bullish Trend on Thin Volumes
From a technical perspective, Hemo Organic's stock turned "mildly bullish" on November 17, 2025, at ₹12.14, moving from a sideways trend. The stock is currently trading above all key moving averages—5-day (₹10.50), 20-day (₹9.05), 50-day (₹9.39), 100-day (₹9.54), and 200-day (₹9.85)—which typically signals positive momentum.
However, the technical indicators present a mixed picture. The MACD shows bullish signals on both weekly and monthly timeframes, whilst Bollinger Bands indicate bullish momentum. RSI shows no clear signal, and moving averages present a "mildly bearish" reading despite the price being above key levels. The KST indicator is mildly bullish on the weekly chart but bearish on the monthly chart.
The recent surge in delivery volumes is noteworthy. One-month delivery volume has increased 208.82%, with recent trading seeing 100% delivery-based transactions. However, the absolute volumes remain minuscule—just 2,969 shares traded on November 18, 2025—highlighting the stock's extremely low liquidity. This thin trading makes the stock highly susceptible to price manipulation and unsuitable for institutional investors.
Investment Thesis: Multiple Red Flags Outweigh Any Positives
The investment thesis for Hemo Organic is overwhelmingly negative. The company's proprietary Mojo score stands at just 33 out of 100, with a "SELL" rating. The valuation is classified as "RISKY," quality as "BELOW AVERAGE," and the financial trend as "FLAT." Whilst technicals show "MILDLY BULLISH," this cannot overcome the fundamental weaknesses.
Key Strengths & Risk Factors
KEY STRENGTHS
- Zero promoter pledging indicates promoter commitment on paper
- Recent technical momentum with stock above all moving averages
- Minimal debt burden with net cash position
- Sharp short-term price appreciation (46.44% in one week)
KEY CONCERNS
- Negative net worth of ₹0.15 crores—complete erosion of shareholder equity
- Zero revenue in Q2 FY26 and Q1 FY26—no operational activity
- Sporadic revenue pattern with only one profitable quarter in seven
- Trade payables surged 3,200% to ₹3.63 crores—severe liquidity stress
- Zero institutional holdings—no professional investor confidence
- Extremely low liquidity (2,969 shares traded)—manipulation risk
- Negative book value per share of ₹0.44
- Long-term underperformance: -49.04% over 10 years
- High volatility (84.87%) with poor risk-adjusted returns
- No clarity on business model or revenue sustainability
Outlook: What to Watch
POSITIVE CATALYSTS
- Any consistent revenue generation over multiple quarters
- Reduction in trade payables indicating improved liquidity
- Entry of institutional investors or strategic partners
- Detailed disclosure on business operations and strategy
RED FLAGS
- Continued zero or minimal revenue in upcoming quarters
- Further deterioration in net worth or increase in liabilities
- Any promoter selling or corporate governance issues
- Inability to explain Q4 FY25 revenue spike
- Sharp price corrections on low volumes
The Verdict: Avoid This Speculative Micro-Cap
Score: 33/100
For Fresh Investors: Avoid completely. Hemo Organic exhibits all the characteristics of a distressed micro-cap with no viable business model. The negative net worth, sporadic revenue, and complete absence of institutional interest make this unsuitable for any serious investor. The recent price surge appears speculative and unsustainable.
For Existing Holders: Exit at the earliest opportunity. The current price levels, driven by short-term speculation, may provide a window to minimise losses. The fundamental business remains non-operational with deteriorating financials. Any further holding exposes investors to significant downside risk when speculative interest wanes.
Fair Value Estimate: Not determinable due to absence of consistent earnings and negative book value. Current price of ₹12.74 appears disconnected from any rational valuation framework.
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 are based on publicly available information and are subject to change. Past performance is not indicative of future results.
