The stock closed at ₹74.27 on November 04, 2025, trading 1.43% higher than the previous close, though it remains 12.18% below its 52-week high of ₹84.57. The company's operational performance continues to disappoint, with net sales declining 19.77% quarter-on-quarter to ₹125.33 crores, whilst operating profit margin (excluding other income) stood at a meagre 4.99%.
The quarterly results paint a picture of a company struggling with core operational challenges whilst relying heavily on non-operating income to shore up profitability. The stark contrast between the company's reported net profit and its underlying operational performance underscores the importance of scrutinising the quality of earnings rather than headline numbers alone.
Quarterly Performance Trend: Volatility and Inconsistency
| Quarter | Net Sales (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | QoQ Change | Operating Margin |
|---|---|---|---|---|---|
| Jun'25 | 125.33 | -19.77% | 15.68 | Turnaround | 4.99% |
| Mar'25 | 156.22 | -4.75% | -7.93 | +55.80% | 0.55% |
| Dec'24 | 164.01 | +26.84% | -5.09 | -57.01% | 6.10% |
| Sep'24 | 129.30 | +4.70% | -11.84 | -22.72% | 0.48% |
| Jun'24 | 123.50 | +0.67% | -15.32 | +2496.61% | -0.64% |
| Mar'24 | 122.68 | +2.46% | -0.59 | -76.68% | 2.19% |
| Dec'23 | 119.73 | — | -2.53 | — | 0.13% |
Financial Performance: Other Income Dominates Profitability
OnMobile Global's Q2 FY26 financial performance presents a troubling narrative of operational weakness masked by exceptional other income. Net sales for the quarter stood at ₹125.33 crores, declining 19.77% quarter-on-quarter from ₹156.22 crores in Q1 FY26, though showing modest year-on-year growth of 1.48% from ₹123.50 crores in Q2 FY25. This sequential revenue decline suggests potential challenges in client retention or project execution.
The company's operating profit before depreciation, interest, and tax (excluding other income) reached ₹6.26 crores, representing an operating margin of just 4.99%. Whilst this marks an improvement from the anaemic 0.55% margin in Q1 FY26, it remains well below the 6.10% achieved in Q3 FY25, indicating that the company has yet to establish consistent operational efficiency. Employee costs of ₹26.91 crores represented 21.47% of net sales, showing reasonable control compared to the prior quarter's 19.08%.
The most striking aspect of the quarterly results was the surge in other income to ₹22.38 crores, an astronomical 1077.89% increase from ₹1.90 crores in Q1 FY26. This non-operating income item was the primary driver of profitability, contributing 78.12% of operating profit (including other income) and accounting for 121.58% of profit before tax. Such heavy reliance on other income raises red flags about earnings quality and sustainability.
After accounting for interest costs of ₹1.54 crores and depreciation of ₹8.15 crores, the company reported profit before tax of ₹18.97 crores. Tax expenses of ₹3.38 crores represented an effective tax rate of 17.82%, resulting in consolidated net profit of ₹15.68 crores and a PAT margin of 12.44%. However, stripping out the exceptional other income reveals that the company's core operations would have generated a profit before tax of just ₹-3.41 crores, underscoring the fragility of the reported profitability.
Operational Challenges: Weak Returns and Deteriorating Efficiency
OnMobile Global's operational metrics reveal deep-seated challenges in capital efficiency and profitability. The company's return on equity (ROE) stands at a weak 3.04% on average, with the latest quarterly ROE deteriorating further to -4.48%. This indicates that the company is generating minimal returns for shareholders relative to the equity capital deployed, a critical concern for any investor evaluating long-term wealth creation potential.
The return on capital employed (ROCE) paints an even bleaker picture at -3.45%, suggesting that the company is destroying value rather than creating it. This negative ROCE indicates that the company's operating profit is insufficient to cover the cost of capital employed in the business, a fundamental red flag for operational viability.
The company's balance sheet as of March 2025 shows shareholder funds of ₹622.75 crores, comprising share capital of ₹106.32 crores and reserves of ₹507.36 crores. Notably, OnMobile Global operates with zero long-term debt, which eliminates leverage-related risks but also suggests limited ambition for growth investments. Current liabilities of ₹234.52 crores include trade payables of ₹164.61 crores, indicating working capital pressures.
Fixed assets stood at ₹279.11 crores, down from ₹297.05 crores in the prior year, reflecting depreciation outpacing capital expenditure. Investments totalled ₹68.06 crores, whilst current assets of ₹285.72 crores provide reasonable liquidity. The company's cash position of ₹63.00 crores as of March 2024 (down from ₹77.00 crores the previous year) suggests modest cash burn, though the negative operating cash flow trend requires monitoring.
⚠️ Critical Operational Concerns
Negative ROCE of -3.45%: The company is destroying shareholder value, with operating profits insufficient to justify the capital employed in the business.
Weak ROE of 3.04%: Returns to equity shareholders remain anaemic, well below the cost of equity and peer benchmarks.
Other Income Dependency: Q2 FY26 profitability was entirely driven by exceptional other income of ₹22.38 crores, masking underlying operational losses.
Declining Cash Position: Operating cash flow of ₹38.00 crores in FY24 could not prevent a decline in closing cash from ₹77.00 crores to ₹63.00 crores.
Five-Year Track Record: Stagnation and Margin Erosion
OnMobile Global's five-year financial track record reveals a company struggling with stagnation and margin compression. Annual net sales have remained essentially flat, growing at a compound annual rate of just 0.04% over the past five years, from ₹593.00 crores in FY19 to ₹513.00 crores in FY24. This lack of top-line growth in a dynamic technology sector raises questions about the company's competitive positioning and market relevance.
More concerning is the severe erosion in operating profitability. Operating profit (excluding other income) declined from ₹30.00 crores in FY19 (5.1% margin) to ₹23.00 crores in FY24 (4.5% margin), representing a compound annual decline of -183.40% in EBIT over five years. This dramatic deterioration in operating leverage suggests fundamental challenges in the business model, whether from pricing pressures, cost inflation, or competitive intensity.
Net profit has shown extreme volatility, ranging from a high of ₹46.00 crores in FY21 to just ₹15.00 crores in FY24. The PAT margin of 2.9% in FY24 remains well below the 8.3% achieved in FY21, indicating that the company has lost its ability to convert revenue into sustainable bottom-line profits. Employee costs have declined from ₹177.00 crores in FY19 to ₹108.00 crores in FY24, suggesting workforce rationalisation, but this has not translated into improved profitability.
| Year | Net Sales (₹ Cr) | YoY Growth | Operating Margin | PAT (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|
| FY24 | 513.00 | -2.3% | 4.5% | 15.00 | 2.9% |
| FY23 | 525.00 | +1.2% | 2.5% | 6.00 | 1.1% |
| FY22 | 519.00 | -5.8% | 8.9% | 32.00 | 6.2% |
| FY21 | 551.00 | -3.7% | 12.0% | 46.00 | 8.3% |
| FY20 | 572.00 | -3.5% | 6.8% | 27.00 | 4.7% |
| FY19 | 593.00 | — | 5.1% | 18.00 | 3.0% |
Peer Comparison: Lagging on Key Metrics
OnMobile Global's competitive positioning within the media and entertainment sector reveals significant underperformance relative to peers across multiple dimensions. With a market capitalisation of ₹777.00 crores, the company ranks fourth in its peer group, trailing Bright Outdoor Media, T.V. Today Network, and Entertainment Network India.
The company's ROE of 3.04% lags substantially behind peers such as R K Swamy (11.97%), T.V. Today Network (11.24%), and Bright Outdoor Media (8.02%). This indicates that OnMobile Global is generating significantly lower returns on shareholder equity compared to competitors, suggesting either inferior business economics or operational inefficiencies.
OnMobile Global's price-to-book ratio of 1.27x appears reasonable compared to peers, trading at a discount to Bright Outdoor Media (5.27x) and R K Swamy (2.63x), but at a premium to T.V. Today Network (0.98x) and Entertainment Network India (0.83x). However, given the company's weak ROE and negative earnings, this valuation discount may be justified rather than representing an attractive entry point.
The company's debt-to-equity ratio of 0.01 is amongst the lowest in the peer group, reflecting its conservative capital structure. Whilst this eliminates financial leverage risks, it also suggests limited capacity or willingness to invest aggressively for growth, which may explain the stagnant revenue trajectory.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| OnMobile Global | NA (Loss Making) | 1.27 | 3.04 | 0.01 | NA |
| Bright Outdoor | 45.19 | 5.27 | 8.02 | -0.13 | 0.13% |
| T.V. Today Network | 27.24 | 0.98 | 11.24 | -0.29 | 2.05% |
| Dish TV India | NA (Loss Making) | -0.25 | 0.00 | 0.05 | NA |
| Entertainment Network | 55.08 | 0.83 | 1.22 | -0.17 | 1.49% |
| R K Swamy | 33.92 | 2.63 | 11.97 | -0.51 | 1.15% |
Valuation Analysis: Risky Territory with Limited Visibility
OnMobile Global's valuation metrics reflect the market's scepticism about the company's earnings sustainability and growth prospects. With the company currently loss-making on a trailing twelve-month basis, the P/E ratio is not applicable, immediately signalling caution for value-oriented investors who rely on earnings multiples for assessment.
The price-to-book ratio of 1.27x suggests the stock is trading at a 27% premium to its book value of ₹58.57 per share. Given the company's weak ROE of 3.04% (well below the cost of equity), this premium appears unjustified from a fundamental perspective. Typically, companies trading above book value should demonstrate superior returns on equity, which OnMobile Global clearly does not.
The EV/EBITDA multiple of 44.71x appears elevated, though this metric is distorted by the company's low EBITDA base. More concerning is the negative EV/EBIT ratio of -54.02x, reflecting negative operating profits when other income is excluded. The EV/Sales ratio of 1.38x suggests the market is valuing the company at 1.38 times annual revenue, which may seem reasonable for a technology company but is concerning given the lack of profitability and growth.
The company's valuation grade has been consistently classified as "Risky" since August 2024, having previously oscillated between "Very Expensive" and "Expensive" through mid-2024. This assessment reflects the combination of weak fundamentals, earnings volatility, and uncertain growth trajectory. The stock currently trades at ₹74.27, down 12.18% from its 52-week high of ₹84.57 but up 85.67% from its 52-week low of ₹40.00, suggesting significant price volatility.
Valuation Dashboard
Shareholding Pattern: Minimal Institutional Interest
OnMobile Global's shareholding structure reveals a concerning lack of institutional confidence in the company's prospects. Promoter holding has remained stable at 47.90% across the last five quarters, indicating no change in management's stake or confidence level. The absence of promoter pledging is a positive, eliminating concerns about financial distress at the promoter level.
Foreign institutional investor (FII) holding witnessed a dramatic surge in Q2 FY26 (September 2025 quarter) to 1.85% from just 0.24% in the previous quarter, representing a sequential increase of 1.61 percentage points. This jump suggests some foreign investors may be taking speculative positions, though the absolute level of FII holding remains negligible. The increase from 0.31% in December 2024 to 1.85% in September 2025 indicates growing, albeit limited, foreign interest.
The complete absence of mutual fund holdings (0.00% across all quarters) is particularly telling. Indian mutual funds, which conduct rigorous fundamental analysis before investing, have chosen to stay entirely away from OnMobile Global. This lack of domestic institutional participation raises red flags about the company's investment attractiveness and growth visibility.
Similarly, insurance companies and other domestic institutional investors (DIIs) have zero exposure to the stock, further underscoring the lack of institutional conviction. Non-institutional holdings (retail and other investors) account for 50.25% of the equity, having declined from 51.86% in June 2025, suggesting some retail selling pressure.
| Quarter | Promoter | FII | Mutual Funds | Insurance | Other DII | Non-Institutional |
|---|---|---|---|---|---|---|
| Sep'25 | 47.90% | 1.85% (↑1.61%) | 0.00% | 0.00% | 0.00% | 50.25% (↓1.61%) |
| Jun'25 | 47.90% | 0.24% (↑0.01%) | 0.00% | 0.00% | 0.00% | 51.86% (↓0.01%) |
| Mar'25 | 47.90% | 0.23% (↓0.08%) | 0.00% | 0.00% | 0.00% | 51.87% (↑0.07%) |
| Dec'24 | 47.90% | 0.31% (↑0.06%) | 0.00% | 0.00% | 0.00% | 51.80% (↓0.05%) |
| Sep'24 | 47.90% | 0.25% | 0.00% | 0.00% | 0.00% | 51.85% |
Stock Performance: Short-Term Momentum, Long-Term Underperformance
OnMobile Global's stock price performance presents a tale of two narratives: impressive short-term momentum contrasted against dismal long-term wealth destruction. Over the past three months, the stock has surged 35.28%, significantly outperforming the Sensex's 3.01% gain during the same period, generating an alpha of 32.27 percentage points. This recent rally has been supported by bullish technical indicators and improving delivery volumes.
The six-month performance shows even stronger momentum, with the stock gaining 55.87% compared to the Sensex's 3.67% rise, delivering alpha of 52.20 percentage points. Year-to-date returns of 11.32% have also outpaced the benchmark's 6.81% gain by 4.51 percentage points. This short-term outperformance has pushed the stock above all its major moving averages, with the current price of ₹74.27 trading above the 5-day (₹73.29), 20-day (₹71.20), 50-day (₹63.40), 100-day (₹58.59), and 200-day (₹56.14) moving averages.
However, extending the time horizon reveals a starkly different picture. Over the past one year, the stock has declined 6.46% whilst the Sensex gained 5.94%, resulting in negative alpha of -12.40 percentage points. The underperformance becomes more severe over longer periods: two-year returns of -33.66% versus Sensex's +29.67% (alpha of -63.33 percentage points), three-year returns of -32.76% versus +36.93% (alpha of -69.69 percentage points), and five-year returns of 72.12% versus +105.48% (alpha of -33.36 percentage points).
The stock's volatility of 46.90% over the past year is nearly four times the Sensex volatility of 12.45%, classifying OnMobile Global as a high-beta stock (beta of 1.50) with significantly higher risk than the market. The negative risk-adjusted return of -0.14 indicates that investors have not been compensated for the elevated risk they've assumed. The stock's classification as "HIGH RISK LOW RETURN" accurately captures the unfavourable risk-reward profile.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Day | +1.43% | -0.62% | +2.05% |
| 1 Week | +0.76% | -1.38% | +2.14% |
| 1 Month | +7.59% | +2.77% | +4.82% |
| 3 Months | +35.28% | +3.01% | +32.27% |
| 6 Months | +55.87% | +3.67% | +52.20% |
| YTD | +11.32% | +6.81% | +4.51% |
| 1 Year | -6.46% | +5.94% | -12.40% |
| 2 Years | -33.66% | +29.67% | -63.33% |
| 3 Years | -32.76% | +36.93% | -69.69% |
| 5 Years | +72.12% | +105.48% | -33.36% |
Investment Thesis: Multiple Red Flags Outweigh Recent Momentum
OnMobile Global's investment case is characterised by significant structural weaknesses that overshadow the recent share price momentum. The company's proprietary Mojo Score of 60/100 places it in the "HOLD" category, reflecting a balanced but cautious assessment across four critical parameters.
The valuation parameter is graded as "RISKY," reflecting the combination of loss-making operations, weak return ratios, and uncertain earnings visibility. With a P/E ratio not applicable due to losses and a price-to-book ratio of 1.27x despite an ROE of just 3.04%, the stock offers little margin of safety for value investors. The quality grade is "AVERAGE," acknowledging the company's debt-free balance sheet and absence of promoter pledging, but penalising the poor long-term growth trajectory and weak profitability metrics.
The financial trend parameter is assessed as "POSITIVE" based on the recent quarterly turnaround, though this is heavily caveated by the exceptional nature of other income driving profitability. The technical trend is "BULLISH," supported by the stock trading above all major moving averages and positive momentum indicators. However, technical strength alone cannot compensate for fundamental weaknesses.
Mojo Investment Parameters
Key Strengths & Risk Factors
✅ KEY STRENGTHS
- Debt-Free Balance Sheet: Zero long-term debt eliminates financial leverage risks and provides flexibility
- No Promoter Pledging: Stable promoter holding of 47.90% with no pledging indicates management confidence
- Recent Quarterly Turnaround: Q2 FY26 showed consolidated net profit of ₹15.68 crores versus loss in prior quarter
- Strong Technical Momentum: Stock trading above all major moving averages with bullish indicators
- Improving Operating Margin: Operating margin (excl OI) improved to 4.99% from 0.55% quarter-on-quarter
- Adequate Interest Coverage: Average EBIT to interest ratio of 15.74x provides comfortable debt servicing
- Reasonable Liquidity: Current assets of ₹285.72 crores provide working capital cushion
⚠️ KEY CONCERNS
- Exceptional Other Income Dependency: Q2 profitability driven by ₹22.38 crores other income (121.58% of PBT)
- Negative ROCE of -3.45%: Company destroying shareholder value with inadequate operating returns
- Weak ROE of 3.04%: Returns well below cost of equity and peer benchmarks
- Stagnant Revenue Growth: Five-year sales CAGR of just 0.04% indicates lack of business momentum
- Operating Profit Decline: Five-year EBIT growth of -183.40% reflects severe margin erosion
- Zero Institutional Holdings: Complete absence of mutual fund, insurance, and DII participation signals lack of confidence
- Consistent Long-Term Underperformance: Negative alpha of -69.69% over three years versus Sensex
- High Volatility: Stock volatility of 46.90% (beta 1.50) creates elevated risk without commensurate returns
- Loss-Making TTM: Trailing twelve-month losses render traditional valuation metrics inapplicable
Outlook: Critical Monitoring Points for Investors
OnMobile Global stands at a critical juncture where the sustainability of its recent quarterly turnaround will determine the investment narrative going forward. Investors should closely monitor several key factors that will shape the company's trajectory over the coming quarters.
POSITIVE CATALYSTS
- Sustained Operating Margin Improvement: Ability to maintain 5%+ operating margins without other income support
- Revenue Growth Acceleration: Return to positive revenue growth trajectory on consistent basis
- Institutional Participation: Entry of domestic mutual funds or increased FII holdings signalling confidence
- Consistent Quarterly Profitability: Demonstration of earnings sustainability over multiple quarters
- Positive Operating Cash Flow: Improvement in cash generation from core operations
RED FLAGS TO WATCH
- Continued Other Income Dependency: Inability to generate profits from core operations
- Sequential Revenue Decline: Further QoQ sales contraction indicating business challenges
- Margin Compression: Operating margins falling below 3-4% range
- Negative ROE/ROCE Persistence: Continued value destruction over multiple quarters
- Institutional Selling: Further decline in already minimal institutional holdings
- Cash Burn Acceleration: Deteriorating cash position without operational improvement
"OnMobile Global's Q2 turnaround is a mirage built on exceptional other income rather than operational excellence – the company must demonstrate sustainable profitability from core operations before warranting investor confidence."
The Verdict: Avoid Fresh Positions, Existing Holders Exercise Caution
Score: 60/100
For Fresh Investors: OnMobile Global is not recommended for fresh investment at current levels. The company's Q2 FY26 profitability was driven entirely by exceptional other income of ₹22.38 crores, masking underlying operational weakness. With negative ROCE of -3.45%, weak ROE of 3.04%, stagnant revenue growth (0.04% five-year CAGR), and zero institutional participation, the fundamental investment case remains unconvincing. The stock's recent technical momentum and 35.28% three-month rally appear disconnected from deteriorating business fundamentals. Wait for sustained operational improvement and multiple quarters of profit generation from core operations before considering entry.
For Existing Holders: Current shareholders may continue to hold given the recent share price momentum and bullish technical indicators, but should set strict exit criteria. Monitor upcoming quarterly results closely for evidence of sustainable operational profitability without reliance on other income. If Q3 FY26 results show renewed losses or continued dependence on non-operating income, consider reducing exposure. The debt-free balance sheet and absence of promoter pledging provide some downside protection, but do not compensate for the weak return ratios and uncertain earnings visibility. Use any further rally towards the 52-week high of ₹84.57 as an opportunity to reassess position size.
Fair Value Estimate: ₹55-60 based on 1.0x price-to-book ratio (approximately 20-25% downside from current levels), reflecting the company's sub-par ROE and operational challenges. Current price of ₹74.27 appears to price in optimism that may not materialise without fundamental business improvement.
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. All investments carry risk, including potential loss of principal.
