Hiliks Technologies Q3 FY26: Revenue Surge Masks Profitability Crisis

The market has responded with scepticism to the company's deteriorating fundamentals. Trading at ₹50.16 as of February 12, 2026, Hiliks Technologies shares have plummeted 46.88% over the past year, dramatically underperforming the Sensex's 9.85% gain by a staggering 56.73 percentage points. With a market capitalisation of just ₹55.00 crores, the stock has shed over half its value from its 52-week high of ₹107.99, currently trading 53.55% below that peak.

The quarter's results present a paradox that demands careful examination: whilst revenue soared to record levels, the company's ability to convert sales into profits collapsed entirely. This disconnect between top-line growth and bottom-line performance raises critical questions about the sustainability of the business model and the quality of revenue being generated.

Financial Performance: The Revenue-Profitability Disconnect

In Q3 FY26, Hiliks Technologies achieved net sales of ₹8.04 crores, marking an explosive 111.02% quarter-on-quarter increase and a remarkable 336.96% year-on-year surge. This represents the company's highest quarterly revenue figure in recent history. However, this top-line achievement was completely undermined by a catastrophic collapse in operational efficiency.

The company's operating profit (PBDIT excluding other income) turned negative at ₹-0.12 crores in Q3 FY26, a dramatic reversal from the ₹0.51 crores recorded in Q2 FY26. This resulted in an operating margin of -1.49%, compared to a healthy 13.39% in the previous quarter. The year-on-year comparison is equally concerning, with operating profit plummeting from ₹0.35 crores (19.02% margin) in Q3 FY25.

The profit before tax (excluding other income) stood at ₹-0.27 crores in Q3 FY26, compared to ₹0.27 crores in Q2 FY26. With zero tax incurred due to the loss-making status, the net loss for the quarter also came in at ₹0.27 crores, translating to a PAT margin of -3.36%.

On a nine-month basis for FY26 (April-December 2025), the company reported total net sales of ₹13.64 crores, representing substantial growth from ₹4.93 crores in the corresponding period of FY25. However, the nine-month net profit stood at just ₹0.14 crores, a marginal improvement from ₹0.44 crores in 9M FY25, highlighting how the Q3 losses have eroded the gains made in the first half of the fiscal year.

Operational Challenges: Weak Returns and Structural Concerns

The fundamental weakness in Hiliks Technologies' business model becomes apparent when examining its capital efficiency metrics. The company's return on equity (ROE) stands at a meagre 3.40% on an average basis and just 2.44% on a latest basis—dramatically below acceptable standards for financial services companies. This indicates that the company is generating minimal returns for its shareholders relative to the equity capital deployed.

The company's return on capital employed (ROCE) of 3.49% further underscores the poor utilisation of capital. For an NBFC, such low returns raise serious questions about the quality of the loan book, pricing power, and overall business sustainability. These metrics suggest that the aggressive revenue growth being pursued is coming at the expense of profitability and shareholder value creation.

From a balance sheet perspective, Hiliks Technologies maintains a relatively clean capital structure with negligible debt. As of March 2025, the company had zero long-term debt and minimal current liabilities of ₹1.51 crores against shareholder funds of ₹20.45 crores. Whilst this debt-free status eliminates financial risk, it also highlights the company's inability to leverage its balance sheet effectively to generate adequate returns.

The company's current assets stood at ₹15.90 crores as of March 2025, up substantially from ₹4.81 crores in the previous year, indicating a significant build-up in working capital. However, this expansion in the asset base has not translated into improved profitability, suggesting inefficient deployment of resources.

The Margin Collapse: Dissecting the Q3 Deterioration

The most alarming aspect of Q3 FY26 results is the unprecedented margin compression. Operating margins contracted by 1,488 basis points quarter-on-quarter, from 13.39% in Q2 FY26 to -1.49% in Q3 FY26. Year-on-year, the deterioration was even more severe, with margins falling 2,051 basis points from 19.02% in Q3 FY25.

Employee costs increased to ₹0.47 crores in Q3 FY26 from ₹0.40 crores in Q2 FY26, representing a 17.5% sequential increase. Whilst revenue doubled in the same period, employee costs did not scale proportionately, suggesting either overstaffing or compensation structures misaligned with revenue generation. Year-on-year, employee costs more than doubled from ₹0.21 crores in Q3 FY25, rising 123.8%.

Depreciation charges stood at ₹0.15 crores in Q3 FY26, down from ₹0.24 crores in the previous quarter, ruling out increased capital expenditure as a margin drag. The margin collapse therefore appears to stem primarily from operational expenses not captured in the disclosed line items, pointing to potential issues with cost of funds, provisioning, or other operating expenses.

Peer Comparison: Valuation Premium Without Performance Justification

When benchmarked against industry peers, Hiliks Technologies' valuation appears increasingly difficult to justify. The company trades at a price-to-earnings ratio of 91.39x based on trailing twelve-month earnings, significantly above the NBFC industry average P/E of 23x. This represents a valuation premium of nearly 300% over the sector.

The price-to-book value ratio of 2.23x for Hiliks Technologies exceeds the peer average of approximately 1.1x, despite the company delivering an ROE of just 3.40%—substantially below peers like Kreon Finnancial (12.69%) and Caspian Corporate (19.00%). This valuation-performance mismatch suggests the stock is trading on optimism rather than fundamentals.

Whilst Hiliks Technologies maintains a debt-free balance sheet (debt-to-equity of 0.00), this conservative capital structure has not translated into superior returns. Peers with moderate leverage have managed to generate significantly higher ROEs, suggesting that Hiliks' risk-averse approach may be limiting its growth potential without delivering commensurate returns to shareholders.

Valuation Analysis: Expensive Multiple for Deteriorating Fundamentals

The company's current valuation metrics paint a concerning picture. With a P/E ratio of 91.39x, Hiliks Technologies trades at a substantial premium to both its peer group and the broader NBFC sector. The EV/EBITDA multiple of 30.79x and EV/Sales ratio of 5.65x further underscore the expensive nature of the stock relative to its financial performance.

The proprietary valuation assessment classifies Hiliks Technologies as "Very Expensive," a grade it has held since August 2023 with brief interruptions. The stock has lost 53.55% from its 52-week high of ₹107.99, currently trading at ₹50.16—just 20.58% above its 52-week low of ₹41.60. This suggests the market is beginning to price in the deteriorating fundamentals, though the valuation remains stretched.

The company offers no dividend yield, eliminating any income component for investors. With a market capitalisation of just ₹55.00 crores, Hiliks Technologies ranks at the bottom of its peer group, classified as a micro-cap stock with attendant liquidity and volatility risks.

Shareholding Pattern: Eroding Promoter Confidence

The shareholding pattern reveals a concerning trend of declining promoter commitment. Promoter holdings have steadily decreased from 5.87% in March 2025 to 4.65% in December 2025, marking a cumulative reduction of 122 basis points over three quarters. The most recent quarter saw promoter stake decline by 35 basis points from 5.00% to 4.65%.

The sole promoter entity, Pacheli Developers Private Limited, now holds just 4.65% of the company, an extraordinarily low level of promoter ownership that raises governance concerns. The absence of any institutional investors—zero FII, mutual fund, insurance, or other DII holdings—further highlights the lack of confidence from sophisticated investors.

Non-institutional shareholders, comprising predominantly retail investors, now control 95.35% of the company. This ownership structure creates significant risks around stock price volatility, liquidity, and corporate governance. The consistent quarter-on-quarter decline in promoter holdings suggests either capital requirements forcing stake dilution or a lack of conviction in the company's prospects.

Stock Performance: Severe Underperformance Across All Timeframes

The stock's performance has been dismal across most relevant timeframes. Over the past year, Hiliks Technologies has declined 46.88%, massively underperforming the Sensex's 9.85% gain by 56.73 percentage points. The three-month return of -16.37% and six-month return of -4.86% demonstrate sustained selling pressure.

The stock also significantly underperformed its sector, with the NBFC industry delivering 27.43% returns over the past year, resulting in Hiliks Technologies lagging by 74.31 percentage points. The risk-adjusted return of -0.77 with volatility of 60.70% classifies the stock as "High Risk Low Return"—the worst possible combination for investors.

The stock's high beta of 1.50 indicates it is 50% more volatile than the broader market, amplifying both gains and losses. However, given the recent negative returns, this high beta has worked against shareholders, magnifying the downside during market weakness.

Technical indicators paint a uniformly bearish picture. The stock trades below all key moving averages—5-day (₹52.57), 20-day (₹50.18), 50-day (₹51.73), 100-day (₹57.24), and 200-day (₹57.00). The MACD, RSI, Bollinger Bands, and KST indicators all signal bearish or mildly bearish trends across weekly and monthly timeframes.

Investment Thesis: Multiple Red Flags Outweigh Growth Narrative

The proprietary Mojo Score of 22 out of 100 places Hiliks Technologies firmly in "Strong Sell" territory, with the rating unchanged since October 2025. The four-pillar assessment reveals significant weaknesses across all parameters.

The quality assessment categorises Hiliks Technologies as "Below Average" based on its long-term financial performance. The company's 5-year sales CAGR of 11.98% and EBIT CAGR of 12.72% demonstrate reasonable growth, but the average ROE of just 3.40% and complete absence of institutional holdings (0.0%) highlight fundamental quality concerns.

The financial trend is classified as "Positive" based solely on the quarterly revenue trajectory, which reached an all-time high in Q3 FY26. However, this positive trend assessment fails to capture the profitability crisis that accompanied the revenue growth, making it a misleading indicator of the company's true financial health.

Outlook: Critical Monitoring Points for the Road Ahead

The path forward for Hiliks Technologies hinges on management's ability to address the fundamental profitability crisis whilst sustaining revenue momentum. Investors and analysts should closely monitor several key indicators in upcoming quarters to assess whether the company can reverse its deteriorating trajectory.

The company's ability to convert its impressive revenue growth into sustainable profits will determine whether the current crisis is a temporary aberration or a structural problem. Management commentary on cost control measures, pricing strategy, and business model adjustments will be critical in the coming quarters.