The micro-cap company, with a market capitalisation of just ₹95.00 crores, finds itself trapped in a precarious financial position. Despite impressive top-line expansion—net sales surged 183.68% year-on-year to ₹55.29 crores in Q3 FY26 from ₹19.49 crores in Q3 FY25—the company's operational inefficiencies and mounting interest costs continue to erode value. The stock has plummeted 29.35% over the past year, significantly underperforming both the Sensex (up 8.52%) and its sector peers in Other Agricultural Products (up 22.13%), resulting in a painful 51.48 percentage point underperformance versus the sector.
The results highlight a company struggling with fundamental operational challenges even as it attempts to scale revenue. With negative shareholder equity of ₹163.54 crores as of March 2025 and a book value per share of ₹-86.61, Kohinoor Foods presents a highly distressed balance sheet that raises serious questions about financial viability and capital structure sustainability.
Financial Performance: Revenue Surge Masks Operational Distress
Kohinoor Foods' Q3 FY26 financial performance presents a stark dichotomy between impressive revenue growth and deteriorating profitability metrics. Net sales of ₹55.29 crores represented the company's highest quarterly revenue in recent history, growing 183.68% year-on-year from ₹19.49 crores in Q3 FY25 and 14.50% sequentially from ₹48.29 crores in Q2 FY26. This revenue acceleration continued the momentum from Q2 FY26, which had posted 106.46% year-on-year growth.
| Quarter | Net Sales (₹ Cr) | QoQ Change | YoY Change | Net Profit (₹ Cr) | Operating Margin (%) |
|---|---|---|---|---|---|
| Dec'25 | 55.29 | +14.50% | +183.68% | -4.25 | -2.32% |
| Sep'25 | 48.29 | +196.62% | +106.46% | -0.70 | -1.88% |
| Jun'25 | 16.28 | -17.19% | -31.74% | -2.05 | -2.33% |
| Mar'25 | 19.66 | +0.87% | — | 375.63 | -2.03% |
| Dec'24 | 19.49 | -16.67% | — | -8.30 | -12.78% |
| Sep'24 | 23.39 | -1.93% | — | -0.09 | 16.20% |
| Jun'24 | 23.85 | — | — | -2.50 | 13.50% |
However, the revenue growth failed to translate into operational profitability. Operating profit before depreciation, interest, tax and other income (PBDIT excl OI) remained negative at ₹1.28 crores in Q3 FY26, though this represented an improvement from the ₹2.49 crore loss in Q3 FY25. The operating margin excluding other income stood at -2.32%, marginally better than the -12.78% recorded in Q3 FY25 but still firmly in negative territory. This persistent negative operating margin indicates that the company's core business operations are fundamentally loss-making at current revenue levels.
The profit after tax margin deteriorated sharply to -7.69% in Q3 FY26 from -42.59% in Q3 FY25, though the absolute loss amount decreased due to the higher revenue base. The company's reliance on other income of ₹7.66 crores in Q3 FY26—the highest quarterly level recorded—prevented an even more catastrophic bottom-line result. Without this other income, the operating loss would have been substantially larger.
Critical Concern: Unsustainable Interest Burden
Interest costs exploded to ₹9.18 crores in Q3 FY26, representing the highest quarterly interest expense on record and exceeding the company's entire quarterly revenue from just two quarters prior. This massive interest burden—nearly 17% of quarterly revenue—reflects a severely overleveraged capital structure. With operating profits deeply negative before interest, the company has no capacity to service debt from operational cash flows, creating a vicious cycle of accumulating interest obligations.
Operational Challenges: Negative Equity and Capital Structure Crisis
Kohinoor Foods operates with a fundamentally impaired balance sheet that severely constrains its strategic options and threatens long-term viability. As of March 2025, the company reported negative shareholder equity of ₹163.54 crores, comprising share capital of ₹37.07 crores offset by accumulated losses in reserves and surplus of ₹200.61 crores. This represents a technical insolvency position where liabilities exceed assets, though the company continues as a going concern.
The negative book value per share of ₹-86.61 means that on a balance sheet basis, equity holders have no residual claim on assets after settling all liabilities. The company's price-to-book ratio of -0.57x reflects this distressed capital structure, with the market valuation of ₹95.00 crores substantially below the negative book value.
Long-term debt increased to ₹74.89 crores as of March 2025 from ₹64.09 crores in March 2024, indicating continued reliance on borrowed capital despite the company's inability to generate positive returns. Current liabilities of ₹296.82 crores as of March 2025, though down from ₹682.97 crores in March 2024, remain elevated relative to the company's current assets of ₹43.19 crores, creating significant working capital pressure.
The company's return on equity (ROE) stands at 0.0%, though this metric loses meaning given the negative shareholder equity. Return on capital employed (ROCE) averaged 8.75% over recent periods, but the latest ROCE calculation shows negative capital employed, rendering the metric unusable. These profitability indicators underscore the company's fundamental inability to generate adequate returns on invested capital.
Balance Sheet Deterioration
The company's debt-to-EBITDA ratio averaged 7.60 times over recent periods, indicating extremely high leverage relative to operating cash generation capacity. While technically classified as a net cash company with an average net debt-to-equity ratio of -0.92, this classification is misleading given the negative equity base. The sales-to-capital-employed ratio of -0.29x reflects the inefficient deployment of capital, with the company unable to generate meaningful revenue relative to its asset base.
Industry Context: Underperformance in Growing Sector
Kohinoor Foods operates in the Other Agricultural Products sector, which has delivered robust returns of 22.13% over the past year. However, the company has dramatically underperformed this sector benchmark, posting a one-year return of -29.35%, resulting in 51.48 percentage points of underperformance. This massive gap highlights company-specific operational and financial challenges rather than broader sector headwinds.
The basmati rice industry has faced mixed conditions over recent periods, with raw material costs, export dynamics, and domestic demand patterns creating volatility. While some competitors have successfully navigated these challenges, Kohinoor Foods' persistent losses and negative margins suggest fundamental competitive disadvantages or operational inefficiencies that prevent the company from capitalising on sector opportunities.
The company's micro-cap status with a market capitalisation of just ₹95.00 crores limits its access to capital markets and institutional investor interest. With institutional holdings of merely 0.11% (comprising 0.11% FII holdings and 0.01% other DII holdings), the stock lacks the support base that larger, more established competitors enjoy. Zero mutual fund and insurance company holdings further underscore the institutional community's avoidance of this distressed name.
| Company | Market Cap | P/E Ratio | P/BV Ratio | ROE (%) | Debt/Equity |
|---|---|---|---|---|---|
| Kohinoor Foods | ₹95 Cr | NA (Loss Making) | -0.57x | 0.0% | -0.92x |
| Saptarishi Agro | — | 57.15x | 11.55x | 18.10% | 2.21x |
| Puretrop Fruits | — | 57.25x | 1.28x | 7.51% | -0.32x |
| Naturite Agro | — | NA (Loss Making) | 10.10x | 2.68% | 1.01x |
| Himalaya Food | — | 16.52x | 0.63x | 1.89% | 0.00x |
| Gujarat Peanut | — | 13.26x | 1.86x | 0.0% | 0.00x |
Compared to peers, Kohinoor Foods stands out negatively across virtually all metrics. While competitors like Saptarishi Agro command premium valuations (P/BV of 11.55x) based on strong ROE of 18.10%, Kohinoor Foods trades at a negative book value multiple with zero return on equity. The company's operational performance lags substantially behind sector standards, with most peers maintaining positive profitability and healthier balance sheets.
Valuation Analysis: Distressed Asset Trading Below Liquidation Value
Kohinoor Foods' valuation metrics reflect its status as a deeply distressed asset trading at levels that suggest significant scepticism about recovery prospects. With a price-to-book value ratio of -0.57x, the stock trades below its negative book value, indicating the market assigns minimal probability to a successful turnaround that would restore positive shareholder equity.
The company's P/E ratio is not applicable given persistent losses, with the trailing twelve months showing negative earnings. The EV/EBITDA multiple of -59.20x and EV/EBIT of -24.40x are mathematically negative due to the company's negative enterprise value calculation, rendering traditional valuation frameworks largely meaningless. The EV/Sales ratio of 2.39x provides the only conventional valuation reference point, though this metric ignores the company's profitless revenue generation.
The stock's current price of ₹25.54 represents a 44.48% decline from its 52-week high of ₹46.00 reached earlier in the year, though it trades 14.48% above the 52-week low of ₹22.31. The trading range suggests significant volatility, with the stock's beta of 1.50 indicating 50% higher volatility than the broader market. This high-beta characteristic, combined with negative returns, places the stock firmly in the "high risk, low return" category.
Valuation Assessment: Risky
The company's overall valuation grade stands at "Risky," a classification it has maintained since May 2022 with brief interruptions. This assessment reflects the fundamental uncertainty surrounding the company's ability to achieve sustainable profitability, restore positive shareholder equity, and generate returns sufficient to justify current market capitalisation. The absence of dividend payments (last dividend of ₹0.56 per share paid in September 2007) further highlights the lack of cash generation capacity.
Shareholding Pattern: Stable Promoter Base Amid Institutional Absence
The shareholding structure of Kohinoor Foods reveals a concentrated promoter holding with virtually no institutional participation, a pattern typical of micro-cap companies facing financial distress. Promoter holding has remained stable at 37.67% across the past five quarters (December 2025, September 2025, June 2025, March 2025, and December 2024), indicating no change in promoter commitment levels despite the company's deteriorating financial performance.
| Quarter | Promoter % | FII % | MF % | Insurance % | Other DII % | Non-Inst % |
|---|---|---|---|---|---|---|
| Dec'25 | 37.67% | 0.11% | 0.00% | 0.00% | 0.01% | 62.22% |
| Sep'25 | 37.67% | 0.01% | 0.00% | 0.00% | 0.01% | 62.31% |
| Jun'25 | 37.67% | 0.00% | 0.00% | 0.00% | 0.01% | 62.32% |
| Mar'25 | 37.67% | 0.01% | 0.00% | 0.00% | 0.01% | 62.32% |
| Dec'24 | 37.67% | 0.05% | 0.00% | 0.00% | 0.01% | 62.27% |
Foreign institutional investor (FII) holdings increased marginally to 0.11% in December 2025 from 0.01% in September 2025, though this remains negligible in absolute terms. Mutual fund holdings remain at zero across all periods, as do insurance company holdings, reflecting the complete absence of domestic institutional investor interest. Other domestic institutional investor (DII) holdings stand at a minimal 0.01%, unchanged across quarters.
Non-institutional holdings comprise 62.22% of the equity base as of December 2025, declining slightly from 62.31% in September 2025. This large retail and non-institutional shareholder base, combined with minimal institutional participation, contributes to the stock's high volatility and limited liquidity. Positively, promoters have maintained zero pledging of shares, indicating they have not leveraged their holdings for external borrowing despite the company's financial stress.
Stock Performance: Consistent Underperformance Across All Timeframes
Kohinoor Foods' stock price performance has been dismal across virtually all relevant timeframes, with the company consistently underperforming both the Sensex benchmark and its sector peers. The stock closed at ₹25.54 on February 13, 2026, down 3.07% on the day, trading below all key moving averages including the 5-day (₹26.09), 20-day (₹24.81), 50-day (₹26.03), 100-day (₹28.76), and 200-day (₹32.27) moving averages.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -0.51% | -1.14% | +0.63% |
| 1 Month | +1.15% | -1.20% | +2.35% |
| 3 Months | -17.51% | -2.19% | -15.32% |
| 6 Months | -27.07% | +2.59% | -29.66% |
| YTD 2026 | -3.70% | -3.04% | -0.66% |
| 1 Year | -29.35% | +8.52% | -37.87% |
| 2 Years | -38.29% | +15.47% | -53.76% |
| 3 Years | -55.11% | +36.73% | -91.84% |
The three-month return of -17.51% compares unfavourably to the Sensex decline of 2.19%, generating negative alpha of 15.32 percentage points. Over six months, the stock has fallen 27.07% while the Sensex gained 2.59%, resulting in 29.66 percentage points of underperformance. The one-year picture is equally bleak, with the stock down 29.35% versus the Sensex's 8.52% gain, creating 37.87 percentage points of negative alpha.
Longer-term performance metrics reveal sustained value destruction. Over two years, the stock has declined 38.29% while the Sensex rose 15.47%, and over three years, the stock has plummeted 55.11% against the Sensex's 36.73% gain. This consistent pattern of underperformance across all meaningful timeframes reflects the market's loss of confidence in the company's turnaround prospects.
The stock's risk-adjusted return of -0.63 over the past year, combined with volatility of 46.70% (more than four times the Sensex's 11.53% volatility), places it firmly in the "high risk, low return" category. The negative Sharpe ratio confirms that investors have received no compensation for the substantial volatility risk undertaken.
Technical Analysis: Confirmed Bearish Trend Across Indicators
Technical indicators paint a uniformly bearish picture for Kohinoor Foods, with the stock in a confirmed bearish trend as of February 13, 2026. The overall technical trend classification changed to "Bearish" from "Mildly Bearish" on the same day at ₹25.54, reflecting accelerating downward momentum.
Key technical indicators show bearish signals across both weekly and monthly timeframes. The MACD (Moving Average Convergence Divergence) indicator displays bearish readings on both weekly and monthly charts, suggesting sustained downward momentum. The KST (Know Sure Thing) oscillator similarly shows bearish signals across both timeframes, confirming the negative trend. Bollinger Bands indicate bearish conditions on the weekly chart and mildly bearish on the monthly chart, suggesting the stock is trading near the lower band with downward pressure.
The stock trades below all significant moving averages, a classic bearish configuration. Current price of ₹25.54 sits below the 5-day MA (₹26.09), 20-day MA (₹24.81), 50-day MA (₹26.03), 100-day MA (₹28.76), and 200-day MA (₹32.27). The declining moving average structure, with longer-term averages substantially above current price, suggests persistent selling pressure.
Immediate support lies at the 52-week low of ₹22.31, approximately 12.6% below current levels. Immediate resistance appears at the 20-day moving average area around ₹24.81, with major resistance at the 100-day moving average of ₹28.76 (12.6% above current price) and strong resistance at the 200-day moving average of ₹32.27 (26.3% above current price). The 52-week high of ₹46.00 represents far resistance, nearly 80% above current levels.
Investment Thesis: Distressed Asset with Uncertain Recovery Path
The investment thesis for Kohinoor Foods centres on its status as a deeply distressed micro-cap company facing existential financial challenges. The company's Mojo Score of just 12 out of 100, with a "Strong Sell" advisory rating, reflects the comprehensive assessment of its poor fundamentals, negative technical momentum, risky valuation, and below-average quality profile.
The company's quality grade stands at "Below Average," a classification it has maintained since November 2025, based on weak long-term financial performance metrics. Five-year sales growth of -15.81% and five-year EBIT growth of -205.41% underscore sustained business deterioration. The average ROCE of 8.75% and ROE of 0.0% indicate extremely poor capital efficiency, while the high debt-to-EBITDA ratio of 7.60 times highlights unsustainable leverage.
Financial trend analysis shows a "Flat" classification for the latest quarter (December 2025), though this follows a "Very Negative" trend in December 2024. Key negative factors include quarterly net profit of ₹-4.25 crores (down 37.3% versus the previous four-quarter average), record-high quarterly interest costs of ₹9.18 crores, and profit before tax less other income at a record low of ₹-11.91 crores.
Key Strengths & Risk Factors
KEY STRENGTHS
- Revenue Growth Momentum: Q3 FY26 revenue of ₹55.29 crores grew 183.68% YoY, demonstrating top-line expansion capability
- Improving Operating Margins: Operating margin (excl OI) improved to -2.32% from -12.78% YoY, showing narrowing losses
- Zero Promoter Pledging: Promoters have not pledged their 37.67% shareholding despite financial stress
- Established Brand: Kohinoor brand has historical recognition in the basmati rice segment
- Manufacturing Infrastructure: Owns rice mill in Murthal and food factory in Bahalgarh, Sonepat
KEY CONCERNS
- Negative Shareholder Equity: Balance sheet shows ₹-163.54 crores equity with accumulated losses of ₹200.61 crores
- Unsustainable Interest Burden: Q3 FY26 interest of ₹9.18 crores represents 16.6% of revenue, highest quarterly level
- Persistent Operating Losses: Core operations remain loss-making with negative operating margins across all recent quarters
- High Leverage: Debt-to-EBITDA of 7.60x indicates severely overleveraged capital structure
- Weak Return Metrics: ROE at 0.0% and ROCE at 8.75% reflect poor capital efficiency
- Institutional Absence: Zero mutual fund and insurance holdings; total institutional ownership just 0.11%
- Technical Deterioration: Bearish trend across all indicators; stock below all moving averages
Outlook: Critical Monitoring Points for Turnaround Assessment
POSITIVE CATALYSTS
- Sustained Revenue Growth: Consecutive quarters of 100%+ YoY growth if maintained
- Operating Margin Improvement: Path to positive operating margins through cost control
- Debt Restructuring: Successful negotiation with lenders to reduce interest burden
- Capital Infusion: Fresh equity investment to restore positive net worth
- Working Capital Efficiency: Reduction in current liabilities and improvement in cash conversion
RED FLAGS
- Continued Losses: Inability to achieve operating profitability despite revenue growth
- Rising Interest Costs: Further increases in quarterly interest expense
- Liquidity Crisis: Inability to meet current obligations from operating cash flows
- Promoter Exit: Any reduction in promoter shareholding signalling loss of confidence
- Covenant Breaches: Default on debt covenants triggering accelerated repayment demands
The company faces a critical juncture where it must demonstrate the ability to convert revenue growth into positive operating cash flows while simultaneously addressing its overleveraged balance sheet. The path forward requires not just operational improvements but potentially transformative capital structure changes including debt restructuring, equity infusion, or asset monetisation. Investors should closely monitor quarterly operating margin trends, interest coverage ratios, and working capital metrics as leading indicators of turnaround viability.
The Verdict: Exit Recommended for This Distressed Asset
Score: 12/100
For Fresh Investors: Avoid initiating any position in Kohinoor Foods. The combination of negative shareholder equity, persistent operating losses, unsustainable interest burden, and deteriorating technical momentum creates an extremely high-risk profile with limited visibility on recovery. The company requires dramatic operational and financial restructuring that may significantly dilute existing equity holders.
For Existing Holders: Consider exiting positions at current levels or on any technical bounce toward the ₹28-30 range (100-day moving average area). The fundamental deterioration outweighs the recent revenue growth, and the risk of further capital structure impairment remains substantial. Holding this position requires extremely high risk tolerance and should represent only a minimal portfolio allocation if maintained.
Fair Value Estimate: Not determinable given negative book value and absence of positive earnings. Current price of ₹25.54 appears to reflect significant distress premium, with downside risk to ₹20-22 range (52-week low area) if operational metrics fail to improve or if liquidity pressures intensify.
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, and all investments carry risk of loss.
