The company's financial trajectory paints a grim picture. Originally incorporated as The Jayabharat Insurance Company Limited in 1943, Jayabharat transitioned to NBFC operations after the nationalisation of the insurance business in 1969. However, the company has struggled to generate meaningful revenue or profitability for over a decade. With zero net sales reported across all recent quarters and operating losses consistently exceeding ₹0.20 crores per quarter, Jayabharat Credit appears to be a shell entity with minimal operational activity.
Financial Performance: A Company Without Revenue
The Q3 FY26 results underscore the absence of any meaningful business operations. Jayabharat Credit reported zero net sales for the quarter, consistent with every quarter over the past several years. The operating loss (PBDIT excluding other income) stood at ₹0.28 crores, representing a 16.67% deterioration from Q2 FY26's loss of ₹0.24 crores. On a year-on-year basis, the loss widened by 16.67% compared to Q3 FY25's loss of ₹0.24 crores.
| Quarter | Operating Loss (₹ Cr) | QoQ Change | Net Loss (₹ Cr) | YoY Change |
|---|---|---|---|---|
| Dec'25 (Q3) | -0.28 | ▼ 16.67% | -0.28 | ▼ 21.74% |
| Sep'25 (Q2) | -0.24 | ▲ 11.11% | -0.24 | ▼ 14.29% |
| Jun'25 (Q1) | -0.27 | ▼ 12.90% | -0.27 | ▼ 22.73% |
| Mar'25 (Q4) | -0.31 | ▼ 29.17% | -0.34 | ▼ 47.83% |
| Dec'24 (Q3) | -0.24 | ▼ 14.29% | -0.23 | — |
| Sep'24 (Q2) | -0.21 | ▲ 4.55% | -0.21 | — |
| Jun'24 (Q1) | -0.22 | — | -0.22 | — |
The complete absence of revenue generation is alarming. With zero employee costs, negligible fixed assets of just ₹0.01 crores, and no investments, the company appears to exist primarily to service its liabilities. The operating expenses, whilst modest in absolute terms, represent an unsustainable drain on a company with no income stream. The pattern of quarterly losses ranging between ₹0.21 crores and ₹0.34 crores suggests fixed administrative costs that continue regardless of operational activity.
Critical Financial Distress Indicators
Zero Revenue: The company has reported no net sales for at least the past seven quarters, indicating a complete cessation of business operations.
Negative Equity: Shareholder funds stand at negative ₹60.86 crores as of March 2025, with reserves and surplus at negative ₹65.86 crores against a share capital of ₹5.00 crores.
Mounting Liabilities: Current liabilities have grown to ₹61.59 crores, whilst current assets total a mere ₹0.07 crores—a working capital deficit exceeding ₹61 crores.
Balance Sheet Erosion: A Decade of Value Destruction
The balance sheet reveals the extent of financial deterioration over the years. Shareholder equity has been negative since at least March 2020, declining from negative ₹55.64 crores to negative ₹60.86 crores by March 2025. This represents a cumulative erosion of ₹5.22 crores in shareholder value over five years, driven by persistent operational losses.
The company's asset base has shrunk to negligible levels. Fixed assets declined from ₹0.28 crores in March 2020 to just ₹0.01 crores by March 2025, reflecting minimal capital investment or asset maintenance. Current assets, comprising primarily cash or receivables, stood at a paltry ₹0.07 crores as of March 2025. With no investments on the books and zero long-term debt, the company's balance sheet structure suggests an entity in terminal decline.
Book Value Per Share Analysis
The book value per share stands at negative ₹121.72, indicating that the company's liabilities exceed its assets by a substantial margin. At the current market price of ₹17.60, the price-to-book value ratio of -0.14x reflects the market's acknowledgement of the company's distressed financial position. Investors are essentially betting on a turnaround or liquidation value rather than any fundamental business value.
Current liabilities have grown steadily from ₹57.16 crores in March 2020 to ₹61.59 crores by March 2025, increasing by ₹4.43 crores despite the absence of revenue. This suggests accumulating unpaid obligations, possibly including statutory dues, trade payables, or other liabilities that continue to accrue interest or penalties. The company's inability to reduce these liabilities in the absence of operational cash flow raises serious questions about solvency and the potential for insolvency proceedings.
Peer Comparison: Underperformance Across All Metrics
When compared to other micro-cap NBFCs in the peer group, Jayabharat Credit's financial metrics highlight its distressed status. Whilst peers such as Mid East Portfolio Ltd and Northlink Fiscal Services Ltd maintain positive book values and generate returns on equity, Jayabharat Credit stands out for all the wrong reasons.
| Company | P/E Ratio | P/BV Ratio | ROE (%) | Debt/Equity |
|---|---|---|---|---|
| Jayabharat Credit | NA (Loss Making) | -0.14x | 0.0% | -0.99x |
| Mid East Portfolio | 4.86x | 1.71x | 10.66% | 0.00x |
| Northlink Fiscal | NA (Loss Making) | 1.61x | 0.0% | 0.11x |
| Hasti Finance | NA (Loss Making) | 1.08x | 0.0% | 0.00x |
| Libord Securities | NA (Loss Making) | 2.14x | 0.0% | 0.00x |
The negative price-to-book value of -0.14x for Jayabharat Credit contrasts sharply with positive P/BV ratios ranging from 1.08x to 2.14x for peers. This disparity reflects the company's negative net worth, which places it in a fundamentally different category from peers that maintain positive shareholder equity. The return on equity of 0.0% is misleading given the negative equity base; in reality, the company is destroying shareholder value with each passing quarter.
Valuation Analysis: A Value Trap, Not a Value Opportunity
The valuation metrics for Jayabharat Credit defy conventional analysis. With a price-to-earnings ratio classified as "NA (Loss Making)" and a negative book value, traditional valuation frameworks break down. The enterprise value to EBITDA ratio of -69.20x reflects the market's recognition that the company generates negative cash flows and has no viable business model.
The stock's current price of ₹17.60 represents an 85.46% premium to its 52-week low of ₹9.49, suggesting speculative interest rather than fundamental value. However, the price remains 46.78% below the 52-week high of ₹33.07, indicating significant volatility and uncertainty. The company's proprietary valuation grade has oscillated between "Very Attractive" and "Risky" multiple times in recent months, settling at "Risky" as of October 2025—a classification that appears generous given the financial realities.
Fair Value Assessment: Liquidation Scenario
Given the negative net worth of ₹60.86 crores and current liabilities of ₹61.59 crores against negligible assets of ₹0.08 crores, the liquidation value of Jayabharat Credit would likely be zero for equity holders. In a hypothetical liquidation scenario, creditors would absorb whatever minimal asset value exists, leaving nothing for shareholders. The current market capitalisation of ₹8.00 crores appears to price in speculative hopes of a turnaround or restructuring rather than any intrinsic business value.
Shareholding Pattern: Stable but Minimal Institutional Interest
The shareholding pattern reveals a stable ownership structure with minimal institutional participation. Promoter holding has remained constant at 15.22% across the past five quarters, indicating no change in promoter commitment or confidence. The absence of any pledging of promoter shares is a minor positive in an otherwise bleak picture.
| Shareholder Category | Dec'25 | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|---|
| Promoter | 15.22% | 15.22% | 15.22% | 15.22% | 0.00% |
| FII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Funds | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.02% | 0.02% | 0.02% | 0.02% | 0.00% |
| Other DII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional | 84.76% | 84.76% | 84.76% | 84.76% | 0.00% |
The overwhelming non-institutional holding of 84.76% suggests retail investor participation, likely driven by speculative trading rather than long-term investment conviction. The total institutional holding of just 0.02%—represented entirely by insurance companies—reflects the complete absence of confidence from sophisticated investors. No foreign institutional investors (FIIs), mutual funds, or domestic institutional investors (DIIs) hold any stake in the company, a telling indicator of the lack of institutional credibility.
Stock Performance: Volatility Without Fundamentals
The stock's price performance has been characterised by extreme volatility rather than fundamental improvement. Over the past year, Jayabharat Credit has delivered a 50.68% return, significantly outperforming the Sensex's 10.17% gain and generating an alpha of 40.51%. However, this performance must be viewed in the context of the stock's micro-cap status, low liquidity, and speculative nature.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Day | +4.95% | -0.38% | +5.33% |
| 1 Week | +21.88% | +0.72% | +21.16% |
| 1 Month | -16.19% | +0.04% | -16.23% |
| 3 Months | -33.83% | -0.65% | -33.18% |
| 6 Months | +85.46% | +4.59% | +80.87% |
| YTD | -22.43% | -1.53% | -20.90% |
| 1 Year | +50.68% | +10.17% | +40.51% |
| 2 Years | +131.27% | +18.07% | +113.20% |
| 3 Years | +35.80% | +38.29% | -2.49% |
The recent price action reveals the speculative nature of trading activity. The stock gained 21.88% over the past week but declined 16.19% over the past month and 33.83% over three months. The year-to-date decline of 22.43% underscores the lack of sustained momentum. With a beta of 1.50, the stock exhibits 50% more volatility than the broader market, classified as "High Beta" with a risk-adjusted return of 0.88 and volatility of 57.70%—firmly in the "High Risk High Return" category.
The average daily trading volume of just 183 shares on February 12, 2026, highlights the liquidity challenges. Such low volumes make the stock susceptible to price manipulation and create significant execution risk for investors attempting to enter or exit positions. The technical trend, classified as "Mildly Bullish" as of January 28, 2026, appears disconnected from the fundamental deterioration evident in the financial statements.
Quality Assessment: Below Average and Deteriorating
The company's quality grade of "Below Average" appears generous given the financial realities. The five-year sales growth of -18.90% and five-year EBIT growth of -8.54% reflect sustained business contraction rather than cyclical weakness. The average return on equity of 0.0% masks the reality of negative equity and value destruction. The institutional holding of just 0.02% serves as a market vote of no confidence.
The only marginally positive aspect is the absence of debt, with a net debt-to-equity ratio of -0.99x indicating the company is technically a "net cash" entity. However, this classification is misleading—the negative equity base means creditors have claims exceeding the company's asset value, making the net cash position irrelevant in practical terms.
Investment Thesis: Key Strengths and Critical Concerns
Key Strengths
- Zero Debt: The company has no long-term debt obligations, eliminating interest burden and refinancing risk.
- Stable Promoter Holding: Promoters maintain a consistent 15.22% stake with no pledging, indicating commitment despite challenges.
- Historical Pedigree: Established in 1943 with a long corporate history, though operational relevance has diminished.
- Micro-Cap Turnaround Potential: Small size could theoretically enable rapid transformation if new management or capital injection occurs.
Critical Concerns
- Zero Revenue Generation: Complete absence of sales for multiple years indicates no viable business operations.
- Negative Net Worth: Shareholder equity of negative ₹60.86 crores with liabilities exceeding ₹61 crores against negligible assets.
- Persistent Losses: Quarterly losses of ₹0.20-0.34 crores with no path to profitability visible.
- Liquidity Crisis: Working capital deficit exceeding ₹61 crores with current assets of just ₹0.07 crores.
- No Institutional Support: Total institutional holding of 0.02% reflects complete lack of confidence from sophisticated investors.
- Extreme Volatility: Beta of 1.50 and volatility of 57.70% create significant execution and holding risk.
- Insolvency Risk: The deteriorating balance sheet and inability to service liabilities raise concerns about potential insolvency proceedings.
Outlook: What to Watch
Positive Catalysts
- Capital infusion or strategic investor entry to recapitalise the balance sheet
- Asset monetisation or sale of any residual business value
- Restructuring plan or merger with a viable entity
- Regulatory intervention or scheme of arrangement to address liabilities
Red Flags to Monitor
- Further deterioration in net worth below negative ₹65 crores
- Increase in current liabilities beyond ₹62 crores
- Regulatory action or show-cause notices from RBI or stock exchanges
- Initiation of insolvency proceedings under IBC
- Delisting risk if stock falls below exchange minimum requirements
The Verdict: A Shell Entity Best Avoided
Score: 33/100
For Fresh Investors: Avoid completely. Jayabharat Credit exhibits all the hallmarks of a distressed entity with zero revenue, negative net worth, and no visible path to recovery. The risk of total capital loss is substantial, and any investment would be purely speculative.
For Existing Holders: Exit at the earliest opportunity, accepting whatever price the illiquid market offers. The company's financial position has deteriorated beyond repair, and the likelihood of recovery appears negligible. Continued holding exposes investors to potential delisting, insolvency proceedings, or total value erosion.
Fair Value Estimate: ₹0.00 (100% downside risk from current price of ₹17.60). The negative net worth and absence of business operations suggest zero intrinsic value for equity holders.
Note— ROCE calculation not applicable due to negative capital employed.
⚠️ 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 analysis presented is based on publicly available information as of February 12, 2026, and future developments may materially alter the investment thesis.
