Inter Globe Finance, incorporated in 1992 and registered as an NBFC with the Reserve Bank of India, operates as an integrated financial services group offering services to corporations, financial institutions, high net-worth individuals, and retail investors. Despite its diversified positioning and headquarters in Kolkata, the company has struggled to translate operational scale into sustainable profitability, with its average return on equity languishing at a mere 2.13% over recent periods.
Financial Performance: Erratic Trajectory Undermines Confidence
The company's financial performance over recent quarters reveals a deeply troubling pattern of inconsistency and operational weakness. In Q2 FY26 (Jul-Sep'25), Inter Globe Finance recorded net sales of ₹45.07 crores, representing a sharp 33.90% decline compared to the previous four-quarter average. This revenue contraction signals deteriorating business momentum at a time when the broader NBFC sector has demonstrated resilience and growth.
| Quarter | Net Sales (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | QoQ Change | PAT Margin |
|---|---|---|---|---|---|
| Jun'17 | 12.07 | -27.03% | 0.44 | -62.71% | 3.61% |
| Mar'17 | 16.54 | -3.05% | 1.18 | -457.58% | 7.15% |
| Dec'16 | 17.06 | +55.66% | -0.33 | -43.10% | -1.92% |
| Jun'16 | 10.96 | +159.10% | -0.58 | -88.85% | -5.31% |
| Mar'12 | 4.23 | -28.91% | -5.20 | -659.14% | -122.98% |
| Dec'11 | 5.95 | +221.62% | 0.93 | +144.74% | 15.68% |
The quarterly trend data reveals wild swings in both revenue and profitability, with multiple periods of losses interspersed with sporadic profitability. This erratic performance pattern is characteristic of operational instability rather than cyclical business dynamics. The company's inability to maintain consistent earnings generation raises fundamental concerns about management execution and business model sustainability.
On an annual basis, FY2017 saw net sales of ₹77.00 crores with a year-on-year decline of 15.40% from the previous fiscal year. The company managed to post a profit after tax of ₹1.00 crore, translating to a meagre PAT margin of 1.30%. The operating profit margin excluding other income stood at just 2.60%, highlighting the razor-thin profitability cushion that leaves the business vulnerable to even minor operational disruptions.
Operational Challenges: Negative Returns Signal Deep-Rooted Issues
The most alarming aspect of Inter Globe Finance's operational performance lies in its capital efficiency metrics. The company's latest return on equity of negative 2.50% represents actual value destruction for shareholders, whilst the return on capital employed of negative 7.40% indicates that the business is failing to generate adequate returns from its deployed capital base. These metrics stand in stark contrast to healthy NBFCs that typically deliver ROEs in the mid-to-high teens.
Critical Concern: Capital Efficiency Breakdown
Inter Globe Finance's negative ROE of -2.50% and ROCE of -7.40% represent fundamental operational failure. With an average ROE of merely 2.13% over the long term, the company has consistently failed to generate adequate returns on shareholder capital. This level of capital inefficiency is unsustainable and raises serious questions about the viability of the current business strategy.
The balance sheet as of March 2017 shows shareholder funds of ₹94.03 crores, comprising share capital of ₹7.17 crores and reserves of ₹86.85 crores. The company maintains minimal long-term debt, which would ordinarily be viewed as a strength. However, in the context of an NBFC struggling to generate profitable growth, this conservative capital structure may actually reflect an inability to access debt markets on favourable terms or a lack of profitable lending opportunities.
The company's book value per share stands at ₹129.93, whilst the stock trades at ₹82.62, implying a price-to-book ratio of 0.78x. This substantial discount to book value reflects the market's scepticism about the company's ability to earn adequate returns on its equity base. For a financial services company, trading below book value typically signals that investors expect continued value destruction or believe the book value itself may be overstated.
NBFC Sector Context: Lagging Peers Significantly
The broader NBFC sector has delivered robust returns over the past year, with the sectoral index advancing 25.60%. Inter Globe Finance's 27.53% decline over the same period represents a staggering 53.13 percentage point underperformance versus its peer group. This massive divergence highlights company-specific execution failures rather than sectoral headwinds.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity |
|---|---|---|---|---|
| Inter Globe Finance | NA (Loss Making) | 0.78x | 2.13% | 0.03 |
| Chartered Capital | 14.74x | 0.59x | 1.54% | 0.02 |
| F Mec International Finance | 49.61x | N/A | N/A | N/A |
| Supra Pacific | 25.61x | 1.24x | 2.14% | 3.29 |
| Vibrant Global Capital | NA (Loss Making) | 0.58x | 27.21% | 0.22 |
| Caspian Corporate | NA (Loss Making) | 2.25x | 19.10% | 1.32 |
The peer comparison reveals that Inter Globe Finance ranks amongst the weakest performers in its peer group on profitability metrics. Whilst some peers like Vibrant Global Capital and Caspian Corporate demonstrate strong ROEs of 27.21% and 19.10% respectively, Inter Globe Finance's 2.13% average ROE places it near the bottom of the pack. The company's loss-making status prevents meaningful P/E ratio comparison, further highlighting its operational struggles.
Valuation Analysis: Discount Reflects Fundamental Weakness
Inter Globe Finance's valuation metrics paint a picture of a deeply distressed micro-cap NBFC struggling for investor confidence. Trading at 0.78 times book value, the stock's substantial discount reflects the market's assessment that the company is unlikely to generate adequate returns on its equity base. The company's valuation grade has oscillated between "Risky" and "Very Expensive" over recent months, currently settling at "Risky" as of October 15, 2025.
Valuation Dashboard
P/E Ratio (TTM): NA (Loss Making)
Price to Book Value: 0.78x (22% discount to book)
EV/EBITDA: -13.40x (Negative due to operational losses)
Dividend Yield: NA (No recent dividend)
Mojo Score: 17/100 (Strong Sell zone)
The negative enterprise value multiples (EV/EBITDA of -13.40x and EV/EBIT of -13.14x) stem from the company's operational losses and reflect the mathematical distortions that occur when businesses generate negative earnings. The EV/Sales ratio of 0.36x suggests the market values the entire business at roughly one-third of its annual revenue run rate, an extremely depressed multiple that typically signals severe distress or liquidation scenarios.
The stock has traded in a 52-week range of ₹57.60 to ₹138.76, with the current price of ₹82.62 sitting 40.46% below the yearly high and 43.44% above the yearly low. This positioning suggests the stock has found some technical support after a significant decline, but lacks any fundamental catalyst for sustained recovery absent a dramatic operational turnaround.
Shareholding Pattern: Promoter-Dominated with Zero Institutional Interest
The shareholding structure of Inter Globe Finance reveals a promoter-dominated company with absolutely no institutional participation. Promoter holding has remained static at 53.84% across the last five quarters through September 2025, with no sequential changes. The remaining 46.16% is held entirely by non-institutional investors, with zero participation from foreign institutional investors, mutual funds, insurance companies, or other domestic institutional investors.
| Quarter | Promoter % | FII % | MF % | Insurance % | Non-Inst % |
|---|---|---|---|---|---|
| Sep'25 | 53.84% | 0.00% | 0.00% | 0.00% | 46.16% |
| Jun'25 | 53.84% | 0.00% | 0.00% | 0.00% | 46.16% |
| Mar'25 | 53.84% | 0.00% | 0.00% | 0.00% | 46.16% |
| Dec'24 | 53.84% | 0.00% | 0.00% | 0.00% | 46.16% |
| Sep'24 | 53.84% | 0.00% | 0.00% | 0.00% | 46.16% |
The complete absence of institutional investors represents a significant red flag. Sophisticated institutional investors typically conduct rigorous due diligence before committing capital, and their total avoidance of Inter Globe Finance speaks volumes about the company's fundamental quality and growth prospects. The static promoter holding suggests neither accumulation nor distribution by the controlling shareholders, indicating a holding pattern rather than conviction-driven investment.
Stock Performance: Severe Underperformance Across All Timeframes
Inter Globe Finance's stock price performance has been dismal across virtually all meaningful timeframes. Over the past year, the stock has declined 27.53% whilst the Sensex advanced 9.50%, resulting in negative alpha of 37.03 percentage points. The underperformance extends across shorter timeframes as well, with the stock down 16.55% over one month against a 1.19% Sensex gain, and down 22.01% over three months against a 5.40% Sensex advance.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -1.84% | +1.69% | -3.53% |
| 1 Month | -16.55% | +1.19% | -17.74% |
| 3 Months | -22.01% | +5.40% | -27.41% |
| 6 Months | +20.33% | +3.18% | +17.15% |
| YTD | -34.94% | +8.72% | -43.66% |
| 1 Year | -27.53% | +9.50% | -37.03% |
| 2 Years | +135.18% | +29.12% | +106.06% |
| 3 Years | +288.80% | +37.57% | +251.23% |
The longer-term returns present a more complex picture. Over three years, the stock has delivered remarkable gains of 288.80%, vastly outperforming the Sensex's 37.57% return. However, this exceptional long-term performance appears to reflect recovery from an extremely depressed base rather than sustained operational excellence. The recent deterioration in performance suggests that whatever factors drove the multi-year rally have dissipated, leaving investors facing renewed fundamental challenges.
The stock exhibits high beta characteristics with an adjusted beta of 1.50, indicating 50% greater volatility than the broader market. Combined with a risk-adjusted return of -0.46 over the past year and volatility of 59.71%, Inter Globe Finance falls squarely into the "high risk, low return" category—the worst possible combination for investors seeking either growth or stability.
"With negative ROE, zero institutional interest, and severe underperformance against both peers and benchmarks, Inter Globe Finance epitomises a value trap rather than a value opportunity."
Investment Thesis: Multiple Red Flags Outweigh Limited Positives
The investment case for Inter Globe Finance is fundamentally compromised by a convergence of negative factors across all key parameters. The company's quality grade of "Below Average" reflects weak long-term financial performance, with the 5-year EBIT growth of negative 217.51% indicating sustained earnings deterioration despite revenue expansion. The financial trend for the most recent quarter is classified as "Flat," whilst the technical trend has turned "Mildly Bearish" as of November 10, 2025.
Mojo Parameters Assessment
Valuation: Risky (Discount to book reflects fundamental weakness)
Quality Grade: Below Average (Weak ROE, negative EBIT growth)
Financial Trend: Flat (Inconsistent quarterly performance)
Technical Trend: Mildly Bearish (Downward momentum established)
Overall Mojo Score: 17/100 (Strong Sell zone)
Key Strengths & Risk Factors
KEY STRENGTHS
- Strong long-term revenue growth of 103.27% CAGR over five years demonstrates ability to scale operations
- Conservative capital structure with minimal long-term debt (Debt/Equity: 0.03) provides financial flexibility
- Trading at 0.78x book value offers potential upside if operational turnaround materialises
- Established presence since 1992 with RBI registration provides regulatory credibility
- Exceptional three-year stock returns of 288.80% demonstrate potential for sharp recoveries from depressed levels
KEY CONCERNS
- Negative ROE of -2.50% and ROCE of -7.40% indicate fundamental value destruction for shareholders
- Erratic quarterly performance with multiple loss-making periods undermines confidence in business model sustainability
- Complete absence of institutional investors signals serious concerns about company quality and governance
- Severe underperformance of 53.13 percentage points versus NBFC sector over past year
- High volatility (59.71%) combined with negative returns creates unfavourable risk-reward profile
- Flat financial trend and bearish technical indicators suggest continued near-term weakness
- Mojo score of 17/100 places stock firmly in Strong Sell territory
Outlook: What to Watch
POSITIVE CATALYSTS
- Sustained quarterly profitability with improving ROE towards double-digit levels
- Entry of institutional investors (mutual funds or FIIs) signalling confidence restoration
- Significant margin expansion through operational efficiency improvements
- Strategic partnerships or business model pivot addressing structural profitability challenges
RED FLAGS TO MONITOR
- Further deterioration in ROE or additional loss-making quarters
- Continued absence of institutional participation despite market recovery
- Break below ₹57.60 (52-week low) on high volumes indicating capitulation
- Regulatory issues or compliance concerns given NBFC status
- Promoter stake reduction or pledging of shares
The Verdict: Avoid This Distressed Micro-Cap
Score: 17/100
For Fresh Investors: Avoid entirely. The combination of negative ROE, zero institutional interest, severe sector underperformance, and operational inconsistency creates an unacceptably high-risk profile. The discount to book value is a value trap, not a value opportunity.
For Existing Holders: Consider exiting on any technical bounce. The fundamental deterioration and complete absence of institutional validation suggest limited prospects for meaningful recovery. The stock's high volatility may provide tactical exit opportunities near resistance levels.
Fair Value Estimate: ₹60-65 (25-30% downside from current levels) based on continued operational challenges and sector derating for quality concerns.
Rationale: Inter Globe Finance exemplifies a fundamentally broken business model masquerading behind occasional revenue spikes. The negative return on equity, erratic quarterly performance, and complete institutional avoidance represent insurmountable red flags. Whilst the stock trades below book value, this discount reflects justified scepticism about the company's ability to generate adequate returns on shareholder capital. The Mojo score of 17/100 and Strong Sell rating appropriately capture the elevated risk profile and limited upside potential.
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. The stock discussed involves significant risks including potential loss of principal.
