The third quarter of FY26 marked a dramatic reversal for Panorama Studios, with net sales collapsing to ₹29.47 crores—the lowest quarterly figure in recent history—from ₹77.86 crores in Q2 FY26. This 62.15% sequential decline triggered a cascade of negative outcomes across all financial metrics, pushing the company into loss-making territory and raising serious questions about the sustainability of its business model in an increasingly competitive media landscape.
The company's operating profit before depreciation, interest, tax and other income (PBDIT) plummeted to ₹1.47 crores in Q3 FY26 from ₹3.73 crores in the previous quarter, with operating margins compressing to 4.99% from 4.79%. More alarmingly, when excluding other income, the company barely generated any operating cash flow, highlighting fundamental challenges in its core content production and distribution operations.
Quarterly Performance Trend: A Troubling Deterioration
| Quarter | Net Sales (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | QoQ Change | Operating Margin |
|---|---|---|---|---|---|
| Dec'25 (Q3) | 29.47 | -62.15% | -0.40 | -119.61% | 4.99% |
| Sep'25 (Q2) | 77.86 | -42.90% | 2.04 | -60.08% | 4.79% |
| Jun'25 (Q1) | 136.35 | -35.85% | 5.11 | -83.04% | 5.57% |
| Mar'25 (Q4) | 212.54 | +527.33% | 30.13 | +1314.55% | 20.91% |
| Dec'24 (Q3) | 33.88 | -58.75% | 2.13 | -64.56% | 11.75% |
| Sep'24 (Q2) | 82.14 | +130.80% | 6.01 | +64.66% | 9.73% |
The quarterly trend reveals extreme volatility in Panorama Studios' financial performance, with Q4 FY25's exceptional results proving to be an aberration rather than a new normal. The subsequent three quarters of FY26 have witnessed consistent sequential declines, with Q3 FY26 representing the nadir of this downward trajectory.
Financial Performance: A Quarter of Multiple Red Flags
In Q3 FY26, Panorama Studios' net sales of ₹29.47 crores represented not just a 62.15% quarter-on-quarter decline but also a 13.02% year-on-year contraction compared to ₹33.88 crores in Q3 FY24. This marks the lowest quarterly revenue figure in the company's recent operational history, indicating severe challenges in content monetisation and distribution partnerships.
The company's profit before tax turned negative at ₹-1.92 crores in Q3 FY26, compared to a positive ₹1.54 crores in Q2 FY26. The consolidated net loss of ₹0.40 crores compares unfavourably with the previous quarter's profit of ₹2.04 crores and represents a 118.78% year-on-year decline from the ₹2.13 crores profit recorded in Q3 FY24.
Operating margins have deteriorated sharply, with the operating profit margin (excluding other income) at 4.99% in Q3 FY26—the lowest in recent quarters and substantially below the 20.91% achieved in Q4 FY25. The PAT margin turned deeply negative at -5.16%, highlighting the severity of the profitability crisis.
Interest expenses remained elevated at ₹2.69 crores in Q3 FY26, whilst depreciation stood at ₹1.51 crores. The company's operating profit to interest coverage ratio collapsed to just 0.55 times, indicating that the business is generating insufficient operating cash flow to service its debt obligations—a critical warning sign for financial sustainability.
Critical Alert: Profitability Crisis
Operating Profit to Interest Coverage: At just 0.55 times in Q3 FY26, Panorama Studios is generating barely half the operating profit needed to cover interest expenses. This represents the lowest coverage ratio in the company's recent history and raises serious concerns about debt serviceability and financial sustainability.
Cash Flow Concerns: The company's operating cash flow generation has deteriorated significantly, with Q3 FY26 marking the weakest operational performance in years. Without a rapid turnaround in revenue and margins, the company faces mounting pressure on its balance sheet.
Nine-Month Performance: Growth Masks Quarterly Weakness
For the nine-month period ending December 2025, Panorama Studios reported net sales of ₹243.68 crores, representing a robust 60.73% year-on-year growth compared to ₹151.61 crores in the corresponding period of FY25. However, this impressive nine-month growth figure is heavily skewed by the exceptional Q4 FY25 performance that spilled into the FY26 base, masking the deteriorating quarterly trend that has emerged since.
The nine-month consolidated net profit stood at ₹6.75 crores, down from ₹11.99 crores in the same period last year—a 43.70% decline that more accurately reflects the underlying business challenges. Interest expenses for the nine-month period rose 38.42% to ₹8.43 crores, further pressuring profitability despite the top-line growth.
Balance Sheet Quality: Rising Leverage Amid Operational Stress
Panorama Studios' balance sheet as of March 2025 showed shareholder funds of ₹192.15 crores, comprising share capital of ₹14.19 crores and reserves of ₹173.17 crores. The company's long-term debt increased significantly to ₹28.23 crores from just ₹0.60 crores in the previous year, indicating substantial borrowing to fund operations or content investments.
Current liabilities stood at ₹300.55 crores, including trade payables of ₹91.09 crores and other current liabilities of ₹118.10 crores. Against this, current assets totalled ₹491.27 crores, providing a current ratio of approximately 1.63—adequate but declining from previous periods. Fixed assets jumped to ₹46.89 crores from ₹5.03 crores, suggesting significant capital expenditure, possibly in content libraries or production infrastructure.
The company's average net debt to equity ratio of 0.37 remains manageable, whilst the average return on capital employed (ROCE) of 24.91% and return on equity (ROE) of 26.38% over the past five years demonstrate historically strong capital efficiency. However, the latest half-yearly ROCE of 20.34% represents the lowest in recent periods, indicating deteriorating returns as operational challenges mount.
Capital Efficiency Under Pressure
Whilst Panorama Studios has maintained strong average returns over the long term—with ROCE at 24.91% and ROE at 26.38%—the latest data shows troubling deterioration. The half-yearly ROCE of 20.34% marks the lowest point in recent years, whilst the quarterly operating profit to interest coverage of just 0.55 times indicates that capital is being deployed less efficiently and debt servicing is becoming increasingly challenging.
Cash Flow Analysis: Operational Strain Evident
Panorama Studios' cash flow statement for FY25 reveals significant operational challenges. Despite reporting a profit before tax of ₹53.00 crores, the company generated negative cash flow from operations of ₹-25.00 crores, primarily due to adverse working capital changes of ₹-84.00 crores. This substantial working capital build-up suggests either delayed receivables from content distribution or inventory accumulation in unreleased content.
Cash flow from investing activities was negative at ₹-31.00 crores, reflecting capital expenditure in content production and infrastructure. The company relied on financing activities to generate ₹53.00 crores, primarily through the increased debt visible on the balance sheet. The net result was a decline in cash balances from ₹9.00 crores to ₹5.00 crores during FY25.
Industry Context: Navigating a Challenging Media Landscape
The media and entertainment sector in India faces a complex operating environment characterised by fragmented viewership, intense competition from streaming platforms, and evolving content consumption patterns. Panorama Studios operates primarily in content production and distribution, a segment experiencing significant pressure from both traditional theatrical releases and digital streaming economics.
The company's extreme quarterly volatility reflects the project-based nature of the film production business, where revenue recognition is lumpy and dependent on release schedules, distribution deals, and content performance. Q4 FY25's exceptional performance likely stemmed from one or more successful content releases or lucrative distribution agreements, whilst subsequent quarters have reverted to more normalised—and concerning—levels.
| Company | Market Cap (₹ Cr) | P/E (TTM) | ROE (%) | P/BV | Div Yield (%) |
|---|---|---|---|---|---|
| Panorama Studios | 1,151 | 31.01 | 26.38 | 5.76 | 0.12 |
| D B Corp | — | 13.00 | 13.88 | 1.82 | 2.98 |
| Hathway Cable | — | 18.71 | 2.84 | 0.45 | — |
| Jagran Prakashan | — | 8.58 | 9.69 | 0.72 | 9.28 |
| Den Networks | — | 7.13 | 6.26 | 0.36 | — |
| Signpost India | — | 25.85 | 20.09 | 5.15 | 0.21 |
Compared to media sector peers, Panorama Studios commands a premium valuation with a P/E ratio of 31.01x versus the peer average of approximately 15x, and a price-to-book ratio of 5.76x against the peer average of around 1.7x. This premium appears increasingly difficult to justify given the deteriorating operational performance and negative financial trend. The company's ROE of 26.38% remains the highest amongst peers, but this historical strength is under threat from current quarter losses.
Valuation Analysis: Premium Pricing for Deteriorating Fundamentals
At the current price of ₹44.17, Panorama Studios trades at a P/E ratio of 31.01x based on trailing twelve-month earnings—a significant premium to both the broader market and media sector peers. The price-to-book ratio of 5.76x suggests investors are paying nearly six times the company's net asset value, a multiple that appears increasingly stretched given the current operational challenges.
The company's enterprise value to EBITDA multiple of 21.76x and EV to sales ratio of 2.82x reflect elevated valuations that were perhaps justified during periods of strong growth but appear vulnerable to further de-rating as the negative financial trend persists. The stock's valuation grade has oscillated between "Fair" and "Expensive" in recent months, currently assessed as "Fair" but at risk of downgrade if operational performance fails to stabilise.
With the stock trading 29.51% below its 52-week high of ₹62.66 and 26.16% above its 52-week low of ₹35.01, the current price reflects partial recognition of operational challenges but may not fully discount the risk of continued deterioration. The minimal dividend yield of 0.12% provides little income support for investors during this turbulent period.
Shareholding Pattern: Promoters Increase Stake Modestly
| Category | Dec'25 | Sep'25 | Jun'25 | QoQ Change |
|---|---|---|---|---|
| Promoter Holding | 66.61% | 64.96% | 64.96% | +1.65% |
| FII Holding | 0.46% | 0.53% | 1.35% | -0.07% |
| Mutual Fund | 0.00% | 0.00% | 0.00% | — |
| Insurance | 0.00% | 0.00% | 0.00% | — |
| Other DII | 0.18% | 0.17% | 0.20% | +0.01% |
| Non-Institutional | 32.75% | 34.34% | 33.48% | -1.59% |
Promoter holding increased modestly to 66.61% in Q3 FY26 from 64.96% in the previous quarter, suggesting some confidence from the promoter group despite operational challenges. However, the total institutional holding remains negligible at just 0.64%, with no mutual fund or insurance company participation—a significant red flag indicating lack of institutional confidence in the company's prospects.
Foreign institutional investors have been gradually reducing their already minimal stake, declining from 1.35% in Q1 FY26 to 0.46% in Q3 FY26. Non-institutional investors, who hold 32.75%, have also reduced their stake by 1.59 percentage points in the latest quarter, potentially reflecting retail investor concerns about the deteriorating financial performance.
Stock Performance: Significant Underperformance Across Timeframes
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +2.39% | -1.40% | +3.79% |
| 1 Month | +14.05% | -0.81% | +14.86% |
| 3 Months | -9.37% | -1.98% | -7.39% |
| 6 Months | -7.40% | +2.85% | -10.25% |
| Year-to-Date | +13.69% | -2.73% | +16.42% |
| 1 Year | -12.09% | +9.15% | -21.24% |
| 2 Years | +16.18% | +14.45% | +1.73% |
| 3 Years | +547.58% | +35.18% | +512.40% |
Panorama Studios' stock has delivered a negative return of 12.09% over the past year, significantly underperforming the Sensex's 9.15% gain by 21.24 percentage points. The three-month and six-month performance is similarly weak, with losses of 9.37% and 7.40% respectively, both underperforming the broader market substantially.
The recent one-month surge of 14.05% appears to be a technical bounce rather than a fundamental recovery, as it coincides with broader market weakness. The year-to-date gain of 13.69% is also flattered by a low base from early 2026. Longer-term returns remain impressive, with three-year gains of 547.58%, but this reflects the stock's recovery from extremely depressed levels rather than consistent operational excellence.
The stock's beta of 1.50 indicates high volatility—50% more volatile than the broader market—with an annual volatility of 47.62%. Combined with negative returns, this places Panorama Studios firmly in the "high risk, low return" category, an unattractive combination for most investors. The media sector itself has delivered 311.82% returns over the past year, meaning Panorama Studios has underperformed its sector by a staggering 323.91 percentage points.
Technical Analysis: Mildly Bearish Trend with Multiple Resistance Levels
From a technical perspective, Panorama Studios is in a "mildly bearish" trend as of February 9, 2026, having shifted from a more pronounced bearish trend. The stock trades below all major moving averages—the 5-day, 20-day, 50-day, 100-day, and 200-day—a clear indication of weak technical momentum and lack of sustained buying interest.
The immediate support level lies at ₹35.01, representing the 52-week low, whilst immediate resistance is encountered at ₹41.75 (the 20-day moving average area). Major resistance levels exist at ₹45.85 (100-day moving average) and ₹48.83 (200-day moving average), with the 52-week high of ₹62.66 representing strong overhead resistance.
Technical indicators present a mixed picture: MACD shows mildly bullish on the weekly chart but mildly bearish on monthly, whilst Bollinger Bands suggest bullish on weekly but mildly bearish on monthly. The KST indicator remains bearish across both timeframes. Delivery volumes have surged 80.6% over the past month, with the latest day showing 88.82% delivery—potentially indicating some accumulation, though this could also reflect trapped long positions.
Investment Thesis: Quality Metrics Undermined by Operational Reality
Panorama Studios presents a contradictory investment profile. On one hand, the company has demonstrated historically strong capital efficiency with average ROCE of 24.91% and ROE of 26.38%—metrics that typically characterise quality businesses. The five-year sales CAGR of 12.37% and EBIT growth of 8.31%, whilst modest, suggest some underlying business momentum over the long term.
However, the current operational reality tells a starkly different story. The company's financial trend is classified as "negative," with Q3 FY26 marking a particularly troubling quarter characterised by the lowest net sales, operating profit, and profit before tax in recent history. The swing to loss-making operations, combined with deteriorating interest coverage and compressed margins, raises serious questions about near-term sustainability.
The company's quality grade has been downgraded from "Good" to "Average," reflecting the deteriorating operational performance. The absence of institutional investors—with just 0.64% institutional holding and zero mutual fund or insurance participation—indicates a lack of confidence from sophisticated investors who typically conduct thorough due diligence.
Key Strengths and Risk Factors
KEY STRENGTHS
- Strong Historical Returns: Average ROCE of 24.91% and ROE of 26.38% demonstrate efficient capital deployment over the long term
- Established Market Position: Operating since 1980 with transition to media entertainment, bringing decades of industry experience
- Promoter Commitment: Recent increase in promoter holding to 66.61% suggests confidence from controlling shareholders
- Manageable Leverage: Average net debt to equity of 0.37 remains within comfortable limits despite recent borrowing
- Long-term Growth: Five-year sales CAGR of 12.37% shows underlying business expansion over extended periods
KEY RISK FACTORS
- Severe Revenue Decline: Q3 FY26 revenue of ₹29.47 crores down 62.15% QoQ, marking the lowest quarterly sales in recent history
- Loss-Making Operations: Consolidated net loss of ₹0.40 crores in Q3 FY26, reversing from previous quarter profit
- Critical Interest Coverage: Operating profit to interest ratio of just 0.55x indicates insufficient cash generation to service debt
- Compressed Margins: Operating margin at 4.99%, down from 20.91% just two quarters ago
- No Institutional Support: Zero mutual fund or insurance holding, with total institutional ownership at negligible 0.64%
- High Volatility: Beta of 1.50 with 47.62% annual volatility creates significant price risk
- Sector Underperformance: Stock down 12.09% over one year whilst media sector gained 311.82%—a 323.91 percentage point underperformance
Outlook: What Lies Ahead
POSITIVE CATALYSTS
- Q4 FY26 revenue recovery above ₹75 crores would signal stabilisation
- New content releases or distribution deals could boost near-term revenues
- Operating margin expansion back above 10% would ease profitability concerns
- Institutional investor participation would validate investment thesis
- Successful content monetisation improving working capital cycle
RED FLAGS TO MONITOR
- Further quarterly revenue decline below ₹30 crores
- Continued loss-making operations in Q4 FY26
- Interest coverage remaining below 1.0x for consecutive quarters
- Additional debt raising without corresponding revenue improvement
- Promoter stake pledge or reduction
- Working capital deterioration beyond current levels
The outlook for Panorama Studios hinges critically on the company's ability to stabilise revenues and return to profitability in Q4 FY26. The media and entertainment business is inherently project-based and cyclical, but the severity of Q3 FY26's decline suggests structural challenges beyond normal business volatility. Management's ability to secure new content deals, monetise existing content libraries, and control costs will determine whether the current weakness represents a temporary setback or the beginning of a more prolonged downturn.
The Verdict: Exit Recommended
Score: 28/100
For Fresh Investors: Avoid initiating positions. The combination of deteriorating financial performance, loss-making operations, insufficient interest coverage, and lack of institutional confidence creates an unfavourable risk-reward profile. Wait for at least two consecutive quarters of revenue stabilisation and return to profitability before considering entry.
For Existing Holders: Consider exiting positions or reducing exposure significantly. The negative financial trend, mildly bearish technical setup, and operational challenges outweigh the historical quality metrics. Whilst long-term holders may have accumulated gains, the current trajectory suggests further downside risk. Those choosing to hold should monitor Q4 FY26 results closely for signs of stabilisation.
Rationale: Despite historically strong return ratios, Panorama Studios' current operational performance—characterised by a 62% quarterly revenue decline, swing to losses, and critically low interest coverage of 0.55x—presents unacceptable risks. The absence of institutional investors, significant sector underperformance, and negative financial trend classification justify the Strong Sell rating. The premium valuation appears unjustified given deteriorating fundamentals.
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 does not guarantee future results, and all investments carry risk of loss.
