NDTV Q2 FY26: Mounting Losses Deepen as Revenue Growth Fails to Offset Operational Struggles

The stock has responded negatively to the company's ongoing financial distress, trading at ₹93.80 as of October 30, 2025, representing a decline of 28.47% over the past year and significantly underperforming the Sensex, which gained 5.98% during the same period. With a market capitalisation of ₹1,058.30 crores and a micro-cap classification, NDTV's valuation remains precarious, reflected in its "Risky" valuation grade and an alarming Price-to-Book ratio of 18.23 times despite the company being loss-making.

The quarter's results underscore a troubling narrative for NDTV: whilst the company has managed to grow its top line, the inability to control costs and achieve operational efficiency has resulted in losses that are accelerating rather than moderating. The operating profit before depreciation, interest, tax, and other income (PBDIT excl OI) stood at a negative ₹56.87 crores, representing a margin of -46.51%, a deterioration from -38.91% in Q2 FY25.

Financial Performance: Revenue Growth Masked by Spiralling Losses

In Q2 FY26, NDTV's net sales reached ₹122.27 crores, representing a sequential growth of 13.58% from ₹107.65 crores in Q1 FY26 and a year-on-year increase of 9.84% from ₹111.32 crores in Q2 FY25. This top-line expansion, however, has been entirely negated by escalating operational costs and mounting interest burdens. The company's employee costs rose to ₹46.47 crores in Q2 FY26, up from ₹42.13 crores in the corresponding quarter last year, reflecting a 10.30% increase that has outpaced revenue growth efficiency.

The operating profit before depreciation, interest, and tax (excluding other income) deteriorated sharply to a loss of ₹56.87 crores in Q2 FY26, compared to a loss of ₹43.31 crores in Q2 FY25. This translates to an operating margin of -46.51%, significantly worse than the -38.91% recorded a year ago. The gross profit margin stood at -52.43%, and the PAT margin plummeted to -60.53%, underscoring the severe profitability challenges facing the organisation.

Interest expenses have surged dramatically, reaching ₹9.93 crores in Q2 FY26, more than doubling from ₹4.06 crores in Q2 FY25. This 144.58% year-on-year increase reflects the company's elevated debt burden, with long-term debt ballooning to ₹243.05 crores as of March 2025 from just ₹30.61 crores in March 2024. Depreciation also rose to ₹8.83 crores from ₹6.07 crores, adding further pressure to the bottom line.

On a half-yearly basis (H1 FY26), the company reported cumulative net sales of ₹229.92 crores, with a combined net loss of ₹144.49 crores. This compares unfavourably to the ₹205.24 crores in sales and ₹99.52 crores in losses during H1 FY25, indicating that the loss trajectory is accelerating despite revenue improvements. The quality of earnings remains deeply concerning, with negative cash flows from operations of ₹144.00 crores for the full year FY25, the worst performance in recent history.

Operational Crisis: Structural Challenges Overwhelming Revenue Gains

NDTV's operational metrics paint a picture of a company struggling with fundamental structural issues. The return on equity (ROE) for the latest period stands at a staggering -367.94%, whilst the return on capital employed (ROCE) is -52.55%, both reflecting the company's inability to generate positive returns on invested capital. The average ROE over recent periods is effectively zero, and the average ROCE of 13.10% is misleading given the current negative trajectory.

The balance sheet reveals the extent of the company's financial distress. Shareholder funds have collapsed to ₹58.73 crores as of March 2025 from ₹258.30 crores in March 2024, driven by accumulated losses eroding reserves. Long-term debt has surged to ₹243.05 crores, pushing the debt-to-equity ratio to an alarming 5.58 times. This high leverage position, combined with persistent losses, raises serious questions about the company's financial sustainability and ability to service its debt obligations.

Employee costs as a percentage of revenue have remained stubbornly high, accounting for 38.01% of net sales in Q2 FY26. Whilst this is marginally lower than the 37.85% in Q2 FY25, the absolute increase in employee expenses without corresponding improvements in productivity or profitability highlights operational inefficiencies. The company's inability to achieve economies of scale despite revenue growth suggests deeper issues with its business model and cost structure.

Industry Context: Media Sector Headwinds Compounding Company-Specific Issues

The Indian media and entertainment sector has faced significant headwinds in recent years, with traditional television broadcasting under pressure from digital platforms and changing consumer preferences. NDTV, despite its legacy and brand recognition, has been unable to successfully navigate this transition. The company's revenue growth of 9.84% in Q2 FY26, whilst positive, lags behind the digital transformation required to compete effectively in the evolving media landscape.

The sector's challenges are evident in peer performance as well. Over the past year, the Media & Entertainment sector has declined by 29.58%, and NDTV's decline of 28.47% shows marginal outperformance of just 1.11%. However, this relative outperformance provides little comfort given the absolute magnitude of losses and the company's deteriorating financial position. The sector's average P/E ratio of 19 times is not applicable to NDTV, which remains loss-making and trades at a P/E of "NA (Loss Making)".

NDTV's competitive positioning has weakened considerably. The company's market capitalisation of ₹1,058 crores places it at the lower end of the peer group, and its operational metrics are significantly inferior to competitors. The absence of institutional interest is telling, with FII holdings at a mere 0.11% and zero mutual fund or insurance company holdings, suggesting that institutional investors have lost confidence in the company's turnaround prospects.

Peer Comparison: NDTV's Valuation Disconnect

A comparison with peers in the Media & Entertainment sector reveals the extent of NDTV's challenges and the market's scepticism about its prospects. Whilst the company trades at a Price-to-Book ratio of 18.23 times, this elevated multiple is not justified by operational performance or profitability. In contrast, peers such as Balaji Telefilms (P/BV of 2.08x) and GTPL Hathway (P/BV of 1.03x) trade at significantly lower multiples whilst maintaining positive ROE.

NDTV's ROE of 0.00% (effectively negative when considering the latest period's -367.94%) stands in stark contrast to peers like Panorama Studios (32.44% ROE) and Signpost India (19.33% ROE). The company's debt-to-equity ratio of 5.58 times is the highest in the peer group by a significant margin, highlighting the precarious financial structure. The absence of dividend payments further underscores the company's inability to generate shareholder returns, with the last dividend paid in September 2008.

Valuation Analysis: Risky Premium Unjustified by Fundamentals

NDTV's valuation metrics present a troubling picture of a company trading at a significant premium despite fundamental weaknesses. With a Price-to-Book ratio of 18.23 times and a book value per share of just ₹7.23, the current market price of ₹93.80 appears disconnected from underlying asset value. The company's EV/EBITDA of -7.33 times and EV/EBIT of -6.32 times reflect negative enterprise value relative to earnings metrics, a clear indication of market scepticism.

The stock's valuation grade has been "Risky" since February 2024, having deteriorated from "Attractive" in October 2023. This downgrade reflects the market's recognition of the company's worsening financial position and uncertain turnaround prospects. The EV/Sales ratio of 2.92 times suggests that investors are paying nearly three times the annual revenue for the enterprise, a premium that is difficult to justify given persistent losses and negative cash flows.

Historical valuation context provides little support for current price levels. The stock has declined 38.44% from its 52-week high of ₹152.37, yet remains 18.05% above its 52-week low of ₹79.46. This positioning suggests that the market has not fully priced in the severity of the company's financial challenges, and further downside risk remains substantial if operational performance continues to deteriorate.

Shareholding Pattern: Promoter Control Amidst Institutional Absence

NDTV's shareholding structure reveals a highly concentrated ownership pattern with minimal institutional participation. Promoter holding has remained stable at 64.71% across the last five quarters, with Rrpr Holding Private Limited holding 56.45% and Vishvapradhan Commercial Private Limited holding 8.27%. The stability in promoter holding provides some comfort regarding control, though the absence of pledging is a positive indicator of financial discipline at the promoter level.

The most concerning aspect of the shareholding pattern is the near-total absence of institutional investors. FII holdings stand at a minuscule 0.11%, having declined marginally from 0.12% in the previous quarter. More significantly, mutual fund holdings are zero, as are insurance company and other domestic institutional investor (DII) holdings. This institutional vacuum speaks volumes about professional investors' assessment of the company's prospects and reflects a complete lack of confidence in a turnaround.

The non-institutional shareholding of 35.17% represents primarily retail investors, who may not have the resources or expertise to fully assess the company's financial challenges. The marginal increase of 0.01% quarter-on-quarter in non-institutional holdings suggests some retail buying, but this is insufficient to offset the broader institutional scepticism. The presence of only three FIIs with minimal stakes further underscores the lack of institutional support.

Stock Performance: Severe Underperformance Across All Timeframes

NDTV's stock performance has been dismal across virtually all timeframes, with the company significantly underperforming both the benchmark Sensex and its sector peers. Over the past year, the stock has declined 28.47% whilst the Sensex gained 5.98%, resulting in a negative alpha of 34.45 percentage points. This underperformance is not isolated to recent periods but extends across multiple timeframes, reflecting persistent investor pessimism.

The three-year performance is particularly damning, with the stock declining 62.14% whilst the Sensex gained 41.30%, resulting in a staggering negative alpha of 103.44 percentage points. The year-to-date decline of 26.74% against the Sensex's gain of 8.43% further illustrates the deteriorating investor sentiment. Only over the four-year and five-year periods does the stock show positive returns of 49.48% and 306.77% respectively, but these gains are largely attributable to the exceptional bull market during the pandemic recovery period rather than company-specific performance.

Technical indicators paint a uniformly bearish picture. The stock is trading below all major moving averages, including the 5-day (₹93.75), 20-day (₹101.98), 50-day (₹122.54), 100-day (₹135.75), and 200-day (₹134.44) moving averages. The current trend classification is "Mildly Bearish" as of October 9, 2025, with multiple technical indicators including MACD, RSI, and KST all signalling bearish momentum on both weekly and monthly timeframes.

The stock's beta of 1.50 indicates high volatility, with the stock moving 50% more than the market. Combined with negative returns, this results in a risk-adjusted return of -0.59 and a volatility of 48.03%, classifying NDTV as a "HIGH RISK LOW RETURN" investment. The immediate support level lies at the 52-week low of ₹79.46, whilst resistance is encountered at multiple levels including the 20-day moving average of ₹101.98.

Investment Thesis: Multiple Red Flags Overwhelming Any Positives

NDTV's investment thesis is fundamentally challenged by a confluence of negative factors across valuation, quality, financial trends, and technical indicators. The company's Mojo Score stands at a dismal 6 out of 100, with a "Strong Sell" rating that has been in place since May 2024. The proprietary scoring system identifies multiple critical concerns that severely limit any investment case for the stock.

The quality assessment reveals a "Below Average" grade, reflecting weak long-term financial performance characterised by a five-year EBIT growth of -246.34% and an average EBIT-to-interest coverage of just 0.82 times. The average debt-to-EBITDA ratio is classified as "Negative Net Debt" due to negative EBITDA, whilst the net debt-to-equity ratio of 5.58 times indicates extreme leverage. The average ROCE of 13.10% and ROE of 0.00% underscore the company's inability to generate adequate returns on capital.

The financial trend analysis shows a "Negative" classification as of September 2025, with multiple adverse factors including operating cash flow at its lowest level of negative ₹144.37 crores, profit before tax (less other income) at its lowest quarterly level of negative ₹75.38 crores, and PAT at its lowest quarterly level of negative ₹74.11 crores. Interest expenses have reached their highest quarterly level at ₹9.93 crores, whilst earnings per share (EPS) has hit its lowest point at negative ₹11.49.

Outlook: Critical Monitoring Points for Any Potential Stabilisation

The outlook for NDTV remains deeply concerning, with the company facing an uphill battle to achieve financial stability. The key question for investors is whether management can execute a credible turnaround plan that addresses the core issues of cost structure, operational efficiency, and debt burden. Based on current trends, there is little evidence of such a plan being successfully implemented.