NB Footwear Q2 FY26: Operational Shutdown Deepens Financial Crisis

The company's financial position has deteriorated to a critical state, with shareholder funds turning negative at ₹-1.59 crores as of March 2025. Originally incorporated in September 1987 as part of Hyderabad's Nava Bharat conglomerate, NB Footwear was engaged in manufacturing leather goods and footwear. However, the complete absence of operational activity for multiple quarters suggests the business has effectively ceased operations.

Financial Performance: Complete Operational Collapse

In Q2 FY26, NB Footwear reported a net loss of ₹0.03 crores on zero revenue, marginally improved from the ₹0.08 crores loss in Q1 FY26. The company's quarterly operating profit before depreciation, interest and tax (PBDIT) stood at ₹-0.03 crores, representing the lowest loss among recent quarters. However, this marginal improvement stems purely from reduced employee costs of ₹0.02 crores rather than any operational turnaround.

The quarterly trend reveals a company in terminal decline. With zero sales generation across seven consecutive quarters and mounting losses, NB Footwear lacks any revenue-generating capacity. Employee costs, whilst minimal, continue to drain resources without corresponding output. The absence of any operational income, interest expense, or depreciation charges further confirms the company's dormant status.

Balance Sheet Crisis: Negative Net Worth

NB Footwear's balance sheet as of March 2025 paints a dire picture of financial distress. Shareholder funds have turned negative at ₹-1.59 crores, deteriorating from ₹-1.36 crores in March 2024. The company's reserves and surplus stand at ₹-16.09 crores against share capital of ₹14.50 crores, representing accumulated losses far exceeding the equity base.

The company maintains negligible current assets and minimal current liabilities of ₹0.07 crores. Fixed assets, investments, and long-term debt are all recorded at zero, indicating complete asset liquidation or write-offs. This hollow balance sheet structure, devoid of productive assets or working capital, renders the company operationally defunct.

Whilst the absence of debt appears positive on surface, it reflects the company's inability to secure financing rather than prudent capital management. With negative net worth, no lender would extend credit to this distressed entity. The company's return on equity (ROE) is meaningless given the negative book value, whilst return on capital employed (ROCE) cannot be calculated due to negative capital employed.

Valuation Analysis: Risky Territory

NB Footwear's valuation metrics defy conventional analysis. The price-to-earnings ratio stands at "NA (Loss Making)" due to sustained losses, whilst the price-to-book value ratio of -5.46x reflects the negative net worth. The enterprise value to EBITDA multiple of -8.68x is meaningless in the absence of positive earnings.

The company's overall valuation grade stands at "RISKY" since April 2023, reflecting fundamental weaknesses that make investment extremely hazardous. Trading at ₹6.43, the stock has declined 64.10% from its 52-week high of ₹17.91, with no fundamental support for any price level given the negative equity and zero operations.

Peer Comparison: Bottom of the Barrel

Comparing NB Footwear with peers in the diversified consumer products sector highlights its extreme distress. Whilst peer companies maintain positive book values and generate returns, NB Footwear stands alone with zero operations and negative equity.

NB Footwear ranks at the bottom with the worst fundamentals in its peer group. Whilst Olympic Cards also reports losses, it maintains positive book value. NB Footwear's negative price-to-book ratio is unprecedented, reflecting complete destruction of shareholder value. The company's market capitalisation of ₹9.00 crores positions it as the fourth smallest in the peer group, but size is irrelevant when the underlying business has ceased operations.

Shareholding Pattern: Promoter Stability Amidst Crisis

Promoter holding in NB Footwear stood at 37.04% as of December 2025, unchanged from September 2025 but down from 37.89% in March 2025. The marginal 0.85% reduction in Q1 FY26 suggests limited promoter confidence, though the stable holding in subsequent quarters indicates they're neither increasing stake nor completely abandoning the company.

The complete absence of institutional investors—zero FII, mutual fund, insurance, or DII holdings—signals extreme risk aversion from sophisticated investors. Non-institutional holdings of 62.96% likely comprise retail investors trapped in this distressed stock. Key promoters include Nitin Krishnalal Minocha (29.63%) and Copo Holdings Private Limited (7.41%). Positively, there's no promoter pledging, though this matters little given the negative net worth.

Stock Performance: Catastrophic Wealth Destruction

NB Footwear's stock performance reflects the underlying business catastrophe. Trading at ₹6.43 on January 30, 2026, the stock has delivered devastating returns across most timeframes, with particularly severe losses in recent periods.

The one-year return of -63.38% massively underperformed the Sensex's 7.18% gain, generating negative alpha of -70.56%. Recent performance has been particularly brutal, with the stock losing 40.30% in just one month and 50.92% over six months. The stock trades below all key moving averages—5-day (₹6.51), 20-day (₹7.67), 50-day (₹8.06), and 100-day (₹8.63)—confirming strong bearish momentum.

Interestingly, longer-term returns of 56.83% over three years and 323.03% over five years suggest the company had operational viability in the past. However, these historical gains are irrelevant to current investors facing a defunct business. The stock's beta of 1.50 indicates high volatility, with volatility at 68.49% classifying it as "HIGH RISK LOW RETURN."

Technical Analysis: Bearish Trend Dominates

NB Footwear's technical outlook remains firmly bearish, with the trend changing to "BEARISH" on January 13, 2026, at ₹7.15 from "Mildly Bearish." Weekly MACD shows mildly bullish signals, but monthly indicators remain bearish. The RSI provides no clear signal, whilst Bollinger Bands indicate bearish pressure on both weekly and monthly timeframes.

Immediate support sits at the 52-week low of ₹6.13, which the stock is currently testing. Resistance levels exist at ₹7.67 (20-day moving average), ₹8.06 (50-day), and ₹8.63 (100-day). However, technical analysis holds limited value for a company with zero operations and negative equity. Any price movement reflects speculation rather than fundamental improvement.

Investment Thesis: Avoid at All Costs

NB Footwear's investment profile presents overwhelming negatives across all parameters. The company's quality grade stands at "BELOW AVERAGE," reflecting poor long-term financial performance. The financial trend is classified as "FLAT" for Q3 FY26, though this euphemistic label masks the reality of complete operational shutdown.

The company's proprietary Mojo Score of 12 out of 100 places it firmly in "STRONG SELL" territory. This score has remained at 17 (Strong Sell) since April 2025, previously downgraded from "SELL" (33 points). The valuation grade of "RISKY" accurately captures the extreme hazard this investment represents.

Outlook: Critical Monitoring Points

The outlook for NB Footwear remains severely negative barring extraordinary intervention. Without immediate capital injection, business revival plan, or strategic restructuring, the company faces potential insolvency proceedings or delisting. Investors should monitor quarterly filings for any signs of operational restart, though prospects appear extremely dim given the prolonged shutdown and negative net worth.