The results paint a troubling picture for the Delhi-based NBFC. Whilst interest income grew 11.13% year-on-year to ₹55.00 crores in Q2 FY26, the company's bottom line has been decimated by surging interest costs and elevated employee expenses. The profit after tax margin compressed dramatically to just 0.51% from 4.10% in the year-ago quarter, highlighting severe profitability challenges despite modest top-line growth.
The company's financial trend has been classified as "Flat" by Mojo's proprietary scoring system, which assigned an overall score of just 21 out of 100—firmly in "Strong Sell" territory. This represents a continuation of the deterioration that began earlier in FY25, when the company posted its first quarterly loss in Q4 FY25 of ₹5.29 crores. The stock has underperformed the NBFC sector by a staggering 52.52 percentage points over the past year, with sector peers delivering 19.05% returns whilst Moneyboxx Finance declined 33.47%.
| Quarter | Interest Income (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | YoY Change | PAT Margin |
|---|---|---|---|---|---|
| Sep'25 | 55.00 | -6.81% | 0.28 | -86.21% | 0.51% |
| Jun'25 | 59.02 | +13.33% | 0.24 | -94.42% | 0.41% |
| Mar'25 | 52.08 | +0.66% | -5.29 | -228.40% | -10.16% |
| Dec'24 | 51.74 | +4.55% | 0.20 | N/A | 0.39% |
| Sep'24 | 49.49 | +8.46% | 2.03 | N/A | 4.10% |
| Jun'24 | 45.63 | +7.87% | 4.30 | N/A | 9.42% |
| Mar'24 | 42.30 | N/A | 4.12 | N/A | 9.74% |
Financial Performance: Revenue Growth Masked by Cost Explosion
Moneyboxx Finance's interest income of ₹55.00 crores in Q2 FY26 reflected an 11.13% year-on-year increase, demonstrating continued loan book expansion. However, this growth came at the expense of profitability. On a sequential basis, interest income declined 6.81% from Q1 FY26's ₹59.02 crores, indicating potential challenges in maintaining momentum.
The company's cost structure presents alarming trends. Interest expenses surged to ₹21.01 crores in Q2 FY26, up 34.51% year-on-year from ₹15.62 crores in Q2 FY24, far outpacing the 11.13% growth in interest income. This resulted in a sharp compression of net interest margins. Employee costs remained elevated at ₹22.11 crores, up 15.76% year-on-year, consuming 40.20% of interest income compared to 38.59% in the year-ago quarter.
Operating profit before depreciation, interest and tax (PBDIT) stood at ₹23.61 crores, the highest in eight quarters, with an operating margin of 42.93%. This represented a sequential improvement from 39.65% in Q1 FY26 and a significant recovery from the 29.21% margin in Q4 FY25. However, this operational efficiency gain was completely eroded by the company's heavy interest burden and tax provisions.
Profit before tax plummeted to just ₹0.31 crores in Q2 FY26, down 85.31% year-on-year from ₹2.11 crores. After accounting for tax of ₹0.03 crores (with an unusually low effective tax rate of 9.68%), the company reported net profit of ₹0.28 crores. For the first half of FY26, the company posted cumulative net profit of merely ₹0.52 crores on interest income of ₹114.02 crores, translating to a dismal H1 FY26 PAT margin of 0.46%.
Operational Challenges: Leverage and Return Profile Under Pressure
The fundamental quality of Moneyboxx Finance's business model has come under severe strain. The company's return on equity (ROE) turned negative at -1.23% for the latest period, a stark deterioration from an already weak average ROE of 1.20% over the past five years. This places Moneyboxx Finance amongst the poorest performers in the NBFC sector, where peers typically generate ROE in the range of 10% to 16%.
The company's balance sheet reveals concerning leverage dynamics. As of March 2025, total current liabilities stood at ₹686.32 crores against shareholder funds of ₹260.72 crores, resulting in a debt-to-equity ratio of 2.77—significantly higher than most NBFC peers. This high leverage magnifies both returns and risks, and with ROE in negative territory, it currently amplifies losses rather than profits.
Return on capital employed (ROCE) stood at 9.82%, indicating that the company is generating returns below the cost of capital, destroying shareholder value. The company's book value per share of ₹71.20 compares unfavourably with the current market price of ₹163.00, implying a price-to-book value ratio of 2.40x. This valuation appears unjustified given the deteriorating profitability metrics and negative ROE.
⚠️ Critical Concerns: Profitability Crisis
Margin Compression: PAT margin collapsed from 4.10% in Q2 FY24 to just 0.51% in Q2 FY26, indicating severe profitability deterioration despite top-line growth.
Interest Cost Explosion: Interest expenses grew 34.51% YoY, far outpacing the 11.13% growth in interest income, suggesting rising cost of funds and potential asset-liability mismatch.
Negative ROE: Latest ROE of -1.23% signals fundamental business model challenges and inability to generate adequate returns on shareholder capital.
High Leverage Risk: Debt-to-equity ratio of 2.77 combined with negative profitability creates a dangerous combination that could threaten financial stability.
NBFC Sector Context: Underperformance Amidst Favourable Industry Trends
The broader NBFC sector has delivered robust returns of 19.05% over the past year, supported by strong credit demand, improving asset quality, and healthy net interest margins across the industry. Moneyboxx Finance's 33.47% decline over the same period represents a massive 52.52 percentage point underperformance, highlighting company-specific challenges rather than sector-wide headwinds.
Established NBFCs have been benefiting from a benign credit environment, declining non-performing assets, and strong loan book growth. The Reserve Bank of India's regulatory framework has provided stability, whilst economic growth has supported credit demand across retail and MSME segments. Moneyboxx Finance's inability to capitalise on these favourable conditions raises serious questions about its business model, risk management practices, and operational efficiency.
The company's five-year sales growth of 107.20% and EBIT growth of 91.02% demonstrate historical expansion, but the recent profitability collapse suggests that this growth may have come at the cost of asset quality, pricing discipline, or cost control. The absence of any institutional investor interest—with FII and mutual fund holdings at 0.00%—reflects the investment community's lack of confidence in the company's prospects.
| Company | P/E (TTM) | P/BV | ROE | Debt/Equity |
|---|---|---|---|---|
| Moneyboxx Finance | NA (Loss Making) | 2.40x | 1.20% | 2.77x |
| Aryaman Capital | 29.51x | 8.74x | 10.74% | 0.36x |
| CSL Finance | 8.62x | 1.19x | 12.06% | 1.29x |
| Kiran Vyapar | 13.09x | 0.28x | 4.90% | 0.14x |
| MKVentures Capital | 60.86x | 5.10x | 15.91% | 0.00x |
Compared to peers, Moneyboxx Finance's ROE of 1.20% is substantially below the peer average of approximately 9%, whilst its debt-to-equity ratio of 2.77x is amongst the highest in the group. The company's loss-making status prevents meaningful P/E comparison, but its P/BV ratio of 2.40x appears expensive given the poor return profile. Higher-quality peers like MKVentures Capital command premium valuations (5.10x P/BV) justified by superior ROE of 15.91%, whilst Moneyboxx Finance's valuation seems disconnected from fundamentals.
Valuation Analysis: Expensive Multiple for a Deteriorating Business
At the current market price of ₹163.00, Moneyboxx Finance trades at a P/BV ratio of 2.40x, which appears unjustifiably expensive for a company with negative ROE and deteriorating profitability. The company's quality grade of "Below Average" and Mojo's proprietary valuation assessment of "Very Expensive" both point to significant downside risk.
The stock has declined 42.78% from its 52-week high of ₹284.85, but remains 25.38% above its 52-week low of ₹130.00. Given the ongoing profitability crisis, the ₹130.00 level appears vulnerable, with potential for further downside if the company fails to demonstrate a credible path to margin recovery.
With an EV/EBITDA multiple of 13.35x and EV/Sales of 4.78x, the company trades at elevated multiples typically reserved for high-growth, high-return businesses. Moneyboxx Finance meets neither criterion currently. The absence of dividend payments (yield: NA) means investors rely entirely on capital appreciation, which has been negative across most timeframes.
Valuation Dashboard
Shareholding: Promoter Stability Amidst Retail Exodus
The shareholding pattern reveals limited institutional confidence in Moneyboxx Finance. Promoter holding has remained stable at 44.59% in Q2 FY26, unchanged from Q1 FY26, with no pledging of shares—a positive indicator of promoter commitment. However, the complete absence of foreign institutional investor (FII) and mutual fund participation (both at 0.00%) is telling.
Other domestic institutional investor (DII) holdings declined marginally to 1.24% in Q2 FY26 from 1.29% in Q1 FY26, suggesting even domestic institutions are reducing exposure. Non-institutional holdings, primarily comprising retail investors, stood at 54.17% in Q2 FY26, up slightly from 54.12% in Q1 FY26. The lack of institutional interest reflects concerns about the company's financial health and growth sustainability.
| Shareholder Category | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|
| Promoter | 44.59% | 44.59% | 44.66% | 0.00% |
| FII | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Funds | 0.00% | 0.00% | 0.00% | 0.00% |
| Other DII | 1.24% | 1.29% | 1.29% | -0.05% |
| Non-Institutional | 54.17% | 54.12% | 54.05% | +0.05% |
Stock Performance: Severe Underperformance Across All Timeframes
Moneyboxx Finance's stock performance has been dismal across most timeframes. The stock declined 3.98% on the results day, closing at ₹163.00, and has generated negative alpha against the Sensex across nearly all periods. Year-to-date, the stock is down 32.22% compared to the Sensex's 8.17% gain, representing an alpha of -40.39 percentage points.
Over the past year, Moneyboxx Finance declined 33.47% whilst the Sensex gained 6.46%, resulting in a negative alpha of 39.93 percentage points. The three-year performance shows a decline of 4.06% against the Sensex's 39.14% gain, with alpha of -43.20 percentage points. Only over the longer five-year and ten-year periods has the stock outperformed, with returns of 207.55% and 2,934.31% respectively, reflecting the company's historical growth phase that has now clearly ended.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +2.64% | +0.37% | +2.27% |
| 1 Month | +1.31% | +4.37% | -3.06% |
| 3 Months | +3.82% | +4.11% | -0.29% |
| 6 Months | -24.66% | +5.33% | -29.99% |
| YTD | -32.22% | +8.17% | -40.39% |
| 1 Year | -33.47% | +6.46% | -39.93% |
| 2 Years | -11.56% | +32.32% | -43.88% |
| 3 Years | -4.06% | +39.14% | -43.20% |
The stock's high beta of 1.50 indicates significantly higher volatility than the market, with annualised volatility of 44.24% compared to the Sensex's 12.50%. The risk-adjusted return of -0.76 and negative Sharpe ratio classify the stock as "High Risk Low Return"—the worst possible combination for investors. Technical indicators show a "Mildly Bearish" trend, with the stock trading below all key moving averages, suggesting continued downward pressure.
Investment Thesis: Multiple Red Flags Signal Caution
Mojo's proprietary four-parameter analysis reveals concerning signals across all dimensions. The near-term drivers are "Mixed" with flat quarterly financial trends and mildly bearish technicals. Quality assessment is "Below Average" based on weak ROE, high leverage, and minimal institutional participation. Valuation is rated "Very Expensive" given the disconnect between price multiples and fundamental performance. The overall assessment is "Mixed" but tilted heavily negative.
Mojo 4 Dots Analysis
Near Term Drivers: MIXED – Flat quarterly financial trend combined with mildly bearish technical setup
Quality: BELOW AVERAGE – Weak ROE of 1.20%, high leverage (2.77x debt/equity), no institutional interest
Valuation: VERY EXPENSIVE – P/BV of 2.40x unjustified for negative ROE and deteriorating margins
Overall Assessment: MIXED (Negative Bias) – Multiple warning signals across parameters
Key Strengths & Risk Factors
Key Strengths
- Stable Promoter Base: 44.59% promoter holding with zero pledging demonstrates long-term commitment
- Operating Margin Recovery: Operating margin of 42.93% in Q2 FY26 marks an eight-quarter high
- Top-Line Growth: Interest income grew 11.13% YoY despite challenging environment
- Historical Growth: Five-year sales CAGR of 107.20% demonstrates past expansion capability
- Sequential Improvement: Net profit improved 16.67% QoQ from Q1 FY26
Key Concerns
- Profitability Collapse: Net profit crashed 86.21% YoY; PAT margin compressed to 0.51% from 4.10%
- Negative ROE: Latest ROE of -1.23% indicates fundamental business model challenges
- Interest Cost Explosion: Interest expenses up 34.51% YoY, far exceeding income growth
- High Leverage: Debt-to-equity ratio of 2.77x creates financial vulnerability
- Zero Institutional Interest: No FII or MF holdings reflects lack of confidence
- Expensive Valuation: P/BV of 2.40x unjustified for loss-making entity
- Severe Underperformance: Stock down 33.47% vs sector up 19.05% over one year
Outlook: What to Monitor Going Forward
Positive Catalysts
- Sustained improvement in operating margins above 40%
- Stabilisation of interest costs and narrowing of spread compression
- Return to consistent quarterly profitability with PAT margins above 3%
- Entry of institutional investors signalling improved confidence
- Deleveraging efforts to reduce debt-to-equity below 2.0x
Red Flags
- Further deterioration in net profit or return to quarterly losses
- Continued expansion of interest costs outpacing income growth
- ROE remaining negative or below 5% for multiple quarters
- Any promoter stake reduction or introduction of pledging
- Stock breaking below ₹130.00 (52-week low) support level
"With net profit margins compressed to barely half a percent and ROE in negative territory, Moneyboxx Finance faces an existential profitability crisis that demands urgent management action."
The path forward for Moneyboxx Finance requires immediate and decisive action to address the profitability crisis. Management must focus on controlling interest costs, optimising the employee expense base, and improving asset quality to restore sustainable margins. Without visible improvement in these metrics over the next two quarters, the stock faces continued downward pressure and potential further downgrades.
The company's historical growth trajectory demonstrates its capability to scale operations, but the current phase reveals that growth without profitability is value-destructive. Investors should demand transparency on asset quality metrics, cost of funds trends, and the strategic roadmap for margin recovery before considering any fresh investment.
The Verdict: Avoid Until Profitability Stabilises
Score: 21/100
For Fresh Investors: Avoid completely. The combination of negative ROE, collapsing margins, expensive valuation, and lack of institutional confidence creates a high-risk proposition with limited upside visibility. Wait for at least two consecutive quarters of sustained profitability improvement and margin stabilisation before considering entry.
For Existing Holders: Consider exiting on any technical bounce towards ₹175-180 levels. The fundamental deterioration is severe, and the stock's "Very Expensive" valuation provides no margin of safety. With the stock already down 42.78% from its peak, further downside to the ₹130.00 support level (or below) remains possible if Q3 FY26 results disappoint.
Fair Value Estimate: ₹110-120 (32% downside from current levels), based on 1.5x P/BV for a below-average quality NBFC with ROE below 2%. Current valuation of 2.40x P/BV is unjustified given the profitability crisis and requires significant de-rating.
⚠️ 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.
