The third quarter results reveal a company grappling with severe operational headwinds. Revenue collapsed by 48.28% quarter-on-quarter to just ₹2.26 crores, whilst operating losses before other income widened dramatically to ₹22.40 crores. The company's inability to generate meaningful sales has resulted in operating margins plunging to negative 991.15%, a stark indicator of deteriorating business fundamentals.
For the nine-month period ending December 2025, Nimbus Projects has generated total sales of merely ₹10.53 crores, representing a catastrophic 94.07% decline from the ₹177.47 crores recorded in the corresponding period of FY25. This dramatic revenue erosion underscores fundamental challenges in the company's real estate operations and project execution capabilities.
Financial Performance: Mounting Losses Across Metrics
A detailed examination of Q3 FY26 financials reveals multiple pressure points. Net sales of ₹2.26 crores mark the lowest quarterly revenue since June 2025, when the company posted ₹3.90 crores. The year-on-year comparison shows marginal growth of 3.20% from Q3 FY25's ₹2.19 crores, but this provides little comfort given the sequential deterioration.
| Quarter | Net Sales (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | QoQ Change | Operating Margin |
|---|---|---|---|---|---|
| Dec'25 | 2.26 | -48.28% | -40.95 | -334.54% | -991.15% |
| Sep'25 | 4.37 | +12.05% | 17.46 | -160.65% | 127.23% |
| Jun'25 | 3.90 | +369.88% | -28.79 | -74.68% | -904.10% |
| Mar'25 | 0.83 | -62.10% | -113.71 | -312.62% | -16396.39% |
| Dec'24 | 2.19 | -62.63% | 53.48 | -18.31% | 4948.40% |
| Sep'24 | 5.86 | -96.54% | 65.47 | +85.57% | -56.48% |
| Jun'24 | 169.42 | - | 35.28 | - | -6.12% |
The profit before tax (PBT) for Q3 FY26 stood at negative ₹44.85 crores, compared to a positive ₹27.88 crores in Q2 FY26. Crucially, other income turned sharply negative at ₹17.12 crores, swinging from a positive ₹21.97 crores in the previous quarter. This volatility in other income, combined with operating losses, has created significant earnings instability.
Employee costs remained elevated at ₹2.36 crores in Q3 FY26, exceeding the quarter's entire revenue. Interest expenses of ₹2.45 crores further strained profitability. The tax credit of ₹3.63 crores (representing an 8.09% effective tax rate on losses) provided minimal relief to the overall loss position.
Operational Challenges: Real Estate Projects Under Pressure
The company's operational metrics paint a concerning picture of a real estate developer struggling with project execution and revenue recognition. The dramatic swing in quarterly performance—from profits in Q2 FY26 to substantial losses in Q3 FY26—suggests lumpy revenue patterns typical of real estate companies, but the magnitude of deterioration points to deeper structural issues.
Return on equity (ROE) stands at an alarming negative 30.40%, indicating the company is destroying shareholder value. The latest return on capital employed (ROCE) of negative 12.65% further confirms inefficient capital deployment. Whilst the five-year average ROCE of 153.71% appears exceptional, this figure is distorted by volatile historical performance and does not reflect current operational reality.
Critical Operational Warning
Revenue Collapse: Nine-month FY26 sales of ₹10.53 crores represent a 94.07% decline from the prior year's ₹177.47 crores. The debtors turnover ratio for H1 FY26 dropped to a concerning 0.49 times, suggesting significant challenges in collecting receivables and converting sales into cash.
Margin Deterioration: Operating margins have turned deeply negative at -991.15%, whilst profit after tax margins reached -1823.89% in Q3 FY26. These metrics indicate the company is incurring substantial costs without corresponding revenue generation.
Balance sheet analysis reveals growing leverage concerns. Long-term debt surged to ₹146.53 crores as of March 2025, up from ₹19.76 crores in the previous year. Current liabilities ballooned to ₹592.67 crores, driven primarily by trade payables of ₹169.31 crores and other current liabilities of ₹382.03 crores. This represents a significant deterioration in the company's liability structure.
Shareholder funds stood at ₹276.47 crores as of March 2025, with reserves and surplus at ₹159.62 crores. However, the ongoing losses in FY26 are likely eroding this equity base rapidly. The company's book value per share of ₹157.28 provides some cushion, but continued losses threaten this metric.
Real Estate Sector Context: Navigating a Challenging Environment
The broader Indian real estate sector has experienced mixed performance in recent quarters, with larger developers benefiting from strong residential demand whilst smaller players face funding constraints and execution challenges. Nimbus Projects' struggles appear company-specific rather than sector-wide, as evidenced by the divergent performance of its peer group.
The company's negligible institutional holding of just 0.03% reflects limited confidence from sophisticated investors. Foreign institutional investors (FIIs) hold a mere 0.03%, whilst mutual funds and insurance companies have zero exposure. This absence of institutional support raises questions about the company's governance, transparency, and long-term viability.
Cash Flow Concerns Mounting
For FY25, Nimbus Projects reported negative operating cash flow of ₹120.00 crores, a dramatic reversal from the positive ₹14.00 crores in FY24. Changes in working capital consumed ₹153.00 crores, indicating significant cash tied up in operations. The company raised ₹162.00 crores through financing activities, primarily debt, to fund operations and investments.
Peer Comparison: Underperformance Across Metrics
Comparing Nimbus Projects to its real estate peers highlights the company's relative weakness across key financial and valuation parameters. The peer group includes B-Right Real Estate, Nila Spaces, Suratwwala Business Group, PropshareTitania Holdings, and Parsvnath Developers.
| Company | P/E Ratio (TTM) | P/BV Ratio | ROE (%) | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Nimbus Projects | NA (Loss Making) | 1.40 | 0.00 | 0.62 | - |
| B-Right Real Estate | 223.54 | 4.74 | 2.17 | 0.54 | - |
| Nila Spaces | 25.03 | 3.92 | 5.58 | 0.18 | - |
| Suratwwala Business | 26.04 | 6.41 | 44.70 | 0.63 | 0.33% |
| PropshareTitania | 96.05 | 10.75 | 61.81 | 1.33 | 1.93% |
| Parsvnath Developers | NA (Loss Making) | -0.17 | 0.00 | -1.45 | - |
Nimbus Projects' inability to generate profits renders traditional P/E ratio analysis meaningless. The company's price-to-book ratio of 1.40x sits well below the peer average of approximately 5.1x, reflecting the market's scepticism about the company's asset quality and earnings potential. The zero ROE compares unfavourably to profitable peers like Suratwwala Business Group (44.70%) and PropshareTitania Holdings (61.81%).
The debt-to-equity ratio of 0.62 appears moderate compared to some peers, but when combined with negative profitability and cash burn, it raises sustainability concerns. Nimbus Projects' market capitalisation of ₹401.54 crores ranks fifth among the peer group, reflecting its micro-cap status and limited institutional interest.
Valuation Analysis: Risky Proposition with Limited Visibility
Nimbus Projects' valuation metrics reflect the market's deep concerns about the company's financial health and future prospects. The stock currently trades at 1.40 times book value, a significant discount to the sector average, suggesting investors are pricing in substantial risk of further equity erosion.
The enterprise value to EBITDA multiple of negative 10.07x and EV/EBIT of negative 9.86x are meaningless in the context of loss-making operations. The EV/Sales ratio of 51.23x appears extraordinarily high, but this is driven by the company's minimal revenue base rather than investor optimism. The enterprise value to capital employed ratio of 1.25x offers little insight given the operational challenges.
The stock's valuation grade is classified as "Risky," a designation it has held since April 2023. This reflects persistent concerns about the company's business model, financial performance, and lack of earnings visibility. With no dividend yield and negative profitability metrics, the investment case rests entirely on a turnaround scenario that currently lacks supporting evidence.
Shareholding Pattern: Stable Promoter Base, Absent Institutions
Nimbus Projects' shareholding structure reveals a promoter-dominated company with virtually no institutional participation. Promoter holding stands at 70.50% as of December 2025, having increased from 51.30% in March 2025 through a significant 19.20 percentage point jump in May 2025. This increase demonstrates promoter commitment, though it also reflects the inability to attract external investors.
| Quarter | Promoter % | FII % | MF % | Insurance % | Non-Inst % |
|---|---|---|---|---|---|
| Dec'25 | 70.50 | 0.03 | 0.00 | 0.00 | 29.47 |
| Sep'25 | 70.50 | 0.00 | 0.00 | 0.00 | 29.47 |
| Jun'25 | 70.50 | 0.00 | 0.00 | 0.00 | 29.50 |
| May'25 | 70.50 | 0.00 | 0.00 | 0.00 | 29.50 |
| Mar'25 | 51.30 | 0.00 | 0.00 | 0.00 | 48.70 |
The minuscule FII holding of 0.03% (representing just one foreign institutional investor) and complete absence of mutual fund and insurance company holdings signals severe institutional scepticism. Non-institutional investors hold 29.47%, down from 48.70% in March 2025, as retail investors appear to be reducing exposure following the promoter stake increase.
Positively, there is no promoter pledging, eliminating one potential risk factor. However, the concentrated ownership structure and lack of institutional validation remain significant concerns for potential investors seeking liquidity and governance comfort.
Stock Performance: Severe Underperformance Across Timeframes
Nimbus Projects' stock price performance reflects the market's negative assessment of the company's deteriorating fundamentals. Trading at ₹207.85 as of February 11, 2026, the stock has declined 30.01% over the past three months, significantly underperforming the Sensex's 0.53% gain during the same period, resulting in negative alpha of 30.54%.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +0.97% | +0.59% | +0.38% |
| 1 Month | -23.23% | +0.88% | -24.11% |
| 3 Months | -30.01% | +0.53% | -30.54% |
| 6 Months | -1.89% | +4.60% | -6.49% |
| YTD | -23.57% | -1.07% | -22.50% |
| 1 Year | -3.39% | +10.51% | -13.90% |
| 2 Years | +493.69% | +17.76% | +475.93% |
| 3 Years | +402.05% | +38.94% | +363.11% |
The one-month decline of 23.23% and year-to-date loss of 23.57% underscore the severity of recent selling pressure. The stock trades 32.30% below its 52-week high of ₹307.00 but remains 17.33% above its 52-week low of ₹177.15, suggesting potential downside risk if operational performance fails to stabilise.
Longer-term returns paint a more complex picture. The two-year return of 493.69% and three-year gain of 402.05% reflect significant historical outperformance, likely driven by specific project completions or asset realisations. However, these historical gains offer little comfort given the current trajectory of deteriorating fundamentals.
Technical indicators uniformly signal caution. The stock trades below all major moving averages—5-day (₹205.24), 20-day (₹221.24), 50-day (₹252.52), 100-day (₹266.40), and 200-day (₹246.41)—indicating sustained selling pressure. The overall technical trend is classified as "Mildly Bearish," with MACD, Bollinger Bands, and KST indicators all flashing bearish signals.
Investment Thesis: Multiple Red Flags Outweigh Limited Positives
The investment case for Nimbus Projects is severely compromised by deteriorating fundamentals, operational losses, and lack of institutional validation. The company's Mojo score of 9 out of 100 places it firmly in "Strong Sell" territory, reflecting weak performance across valuation, quality, financial trends, and technical parameters.
The quality assessment categorises Nimbus Projects as a "Below Average" company based on long-term financial performance. Whilst the company benefits from zero promoter pledging and a five-year sales growth rate of 13.59%, these positives are overwhelmed by negative ROE, deeply negative EBIT-to-interest coverage, and minimal institutional participation.
The financial trend turned negative in the current quarter, driven by the 94.07% decline in nine-month sales, 87.20% drop in profit before tax (excluding other income), and 81.10% fall in profit after tax compared to recent quarterly averages. The debtors turnover ratio reaching a low of 0.49 times further highlights operational stress.
Key Strengths & Risk Factors
KEY STRENGTHS
- Zero Promoter Pledging: No shares pledged by promoters, eliminating one governance risk factor
- Increased Promoter Stake: Promoter holding rose from 51.30% to 70.50%, demonstrating commitment
- Moderate Leverage: Debt-to-equity ratio of 0.62 remains manageable compared to highly leveraged peers
- Book Value Cushion: Book value per share of ₹157.28 provides some downside protection
- Historical Average ROCE: Five-year average ROCE of 153.71% indicates past profitability potential
KEY CONCERNS
- Revenue Collapse: 94.07% decline in nine-month sales to ₹10.53 crores indicates severe operational distress
- Mounting Losses: Q3 FY26 net loss of ₹40.95 crores with deeply negative margins across all metrics
- Negative Cash Flow: Operating cash flow of negative ₹120.00 crores in FY25 signals cash burn
- Zero Institutional Interest: No mutual fund or insurance holdings; minimal FII exposure at 0.03%
- Deteriorating ROE/ROCE: Latest ROE of -30.40% and ROCE of -12.65% indicate value destruction
- Quality Concerns: Below Average quality grade with weak long-term fundamentals
- Technical Weakness: Stock trading below all major moving averages with bearish indicators
Outlook: Critical Monitoring Points Ahead
The outlook for Nimbus Projects remains highly uncertain, contingent on the company's ability to stabilise operations, generate meaningful revenue, and return to profitability. Investors should monitor specific catalysts and warning signals in coming quarters.
POSITIVE CATALYSTS TO WATCH
- Meaningful revenue recovery above ₹20 crores quarterly
- Return to positive operating margins
- Project completion announcements and revenue recognition
- Stabilisation of cash flows from operations
- Entry of institutional investors or strategic partners
RED FLAGS REQUIRING ATTENTION
- Further sequential revenue decline below ₹2 crores
- Continued negative cash flow from operations
- Rising debt levels without corresponding revenue growth
- Promoter stake reduction or share pledging
- Breaches of debt covenants or payment defaults
The real estate sector's inherent lumpiness means quarterly volatility is expected, but Nimbus Projects' magnitude of deterioration suggests structural rather than cyclical challenges. The absence of institutional investors and research coverage limits information flow, increasing investment risk for retail participants.
The Verdict: Exit Recommended for Risk-Averse Investors
Score: 9/100
For Fresh Investors: Avoid initiating positions. The company faces severe operational challenges with revenue collapsing 94% year-on-year, mounting losses, and negative cash flows. The absence of institutional validation and deeply negative profitability metrics make this an unsuitable investment for risk-averse investors.
For Existing Holders: Strongly consider exiting positions, particularly if the stock provides relief rallies. The deteriorating financial trend, negative quality grade, and risky valuation assessment suggest limited near-term recovery prospects. Only high-risk investors with deep sector expertise and ability to absorb potential total loss should consider holding.
Risk Assessment: This micro-cap real estate stock carries extremely high risk with current fundamentals offering no margin of safety. The combination of operational losses, cash burn, and lack of institutional support creates a precarious situation requiring immediate management action and operational turnaround.
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.
