The stock has witnessed extreme volatility, currently trading at ₹26.88, down 24.71% over the past year whilst the broader Sensex gained 6.63%, resulting in a stark underperformance of 31.34 percentage points. Year-to-date, however, the stock has surged 30.55%, reflecting speculative trading rather than fundamental improvement. The company's proprietary Mojo Score stands at a dismal 17 out of 100, firmly in "STRONG SELL" territory, with below-average quality ratings and risky valuation metrics.
Roselabs Finance operates with negligible institutional support—zero holdings from foreign institutional investors, mutual funds, or insurance companies—whilst promoter Lodha Developers Limited maintains a steady 74.25% stake. The absence of institutional confidence underscores the structural challenges facing this micro-cap NBFC, which has struggled to generate consistent revenue or profitability since its incorporation in 1995.
Financial Performance: Intermittent Revenue, Persistent Losses
In Q3 FY26, Roselabs Finance recorded net sales of ₹1.21 crores, marking the first revenue generation since Q4 FY25 (March 2025) when it reported ₹0.71 crores. The preceding two quarters—Q1 and Q2 FY26—saw zero revenue, highlighting the company's inability to sustain consistent business operations. On a quarter-on-quarter basis, the Q3 revenue represents a recovery from nil, though year-on-year comparisons remain unavailable due to the absence of sales in Q3 FY25.
| Quarter | Net Sales (₹ Cr) | Net Loss (₹ Cr) | PAT Margin (%) |
|---|---|---|---|
| Dec'25 (Q3) | 1.21 | -0.04 | -3.31% |
| Sep'25 (Q2) | 0.00 | -0.06 | — |
| Jun'25 (Q1) | 0.00 | -0.05 | — |
| Mar'25 (Q4) | 0.71 | -0.05 | -7.04% |
| Dec'24 (Q3) | 0.00 | -0.11 | — |
| Sep'24 (Q2) | 0.00 | -0.09 | — |
| Jun'24 (Q1) | 0.00 | -0.04 | — |
Operating profit before depreciation, interest, and tax (excluding other income) stood at ₹-0.03 crores in Q3 FY26, the highest (or least negative) figure in recent quarters, compared to ₹-0.06 crores in Q2 FY26. The operating margin came in at -2.48%, marginally better than the -5.63% recorded in Q4 FY25. However, these metrics remain deeply negative, indicating the company's core operations continue to burn cash rather than generate sustainable earnings.
The net loss of ₹0.04 crores in Q3 FY26 represents a 33.33% quarter-on-quarter improvement from the ₹0.06 crore loss in Q2 FY26, though this remains a loss nonetheless. With zero tax liabilities due to continued losses, the company's profit after tax (PAT) margin stood at -3.31%. Employee costs remain minimal at ₹0.01 crores, reflecting the skeletal operational structure of this distressed NBFC.
Critical Balance Sheet Weakness
Negative Shareholder Equity: Roselabs Finance's balance sheet reveals shareholder funds of ₹-4.73 crores as of March 2025, comprising share capital of ₹10.00 crores offset by accumulated reserves and surplus of ₹-14.73 crores. This negative equity position has deteriorated from ₹-4.44 crores in March 2024, indicating continued erosion of shareholder value. The company carries long-term debt of ₹4.93 crores against virtually no fixed assets or investments, raising serious questions about asset utilisation and debt serviceability.
Operational Challenges: Zero Institutional Confidence, Minimal Business Activity
Roselabs Finance's operational metrics paint a picture of a company in survival mode rather than growth. The NBFC sector typically thrives on asset under management (AUM) growth, disbursement momentum, and healthy net interest margins, yet Roselabs Finance exhibits none of these characteristics. The intermittent revenue pattern—₹1.21 crores in Q3 FY26 following two quarters of zero sales—suggests the company lacks a sustainable business model or recurring revenue streams.
The company's return on equity (ROE) stands at 0.0%, though this metric is rendered meaningless given the negative book value. Return on capital employed (ROCE) is deeply negative at -31.00%, reflecting inefficient capital deployment and value destruction. For context, a healthy NBFC would typically exhibit ROE in the 12-18% range and positive ROCE above 10%. Roselabs Finance's metrics fall catastrophically short of these benchmarks.
The institutional shareholding pattern reveals a complete absence of confidence from sophisticated investors. Foreign institutional investors (FIIs), mutual funds, insurance companies, and other domestic institutional investors collectively hold 0.0% of the company's equity. This zero institutional participation speaks volumes about the company's perceived investment merit and governance standards. In contrast, promoter Lodha Developers Limited has maintained a stable 74.25% stake across all recent quarters, with no pledging of shares, suggesting the parent remains committed despite the operational struggles.
Sector Context: NBFC Industry Resilience Bypasses Roselabs
The broader NBFC sector delivered a robust 17.94% return over the past year, driven by strong credit growth, improving asset quality, and healthy net interest margins across well-capitalised players. Roselabs Finance's 24.71% decline over the same period translates to a massive 42.65 percentage point underperformance versus its sector, highlighting its complete disconnect from industry tailwinds. Whilst peers expanded loan books and reported double-digit profit growth, Roselabs struggled to generate any meaningful revenue, let alone profitability.
Peer Comparison: Bottom of the Barrel
Comparing Roselabs Finance to its micro-cap NBFC peers reveals the depth of its underperformance. Whilst peers maintain positive book values, generate profits, and trade at reasonable multiples, Roselabs stands out for all the wrong reasons—negative book value, persistent losses, and unmeasurable valuation ratios.
| Company | P/E (TTM) | Price to Book | ROE (%) | Debt to Equity |
|---|---|---|---|---|
| Roselabs Finance | NA (Loss Making) | -5.57 | 0.0% | -1.02 |
| Richfield Finance | 51.56 | 3.20 | 3.92% | 4.97 |
| Shricon Industries | 44.53 | 5.80 | 21.14% | 0.00 |
| Dynamic Portfolio | 71.45 | 2.13 | 0.97% | 0.07 |
| Swarna Securities | 33.46 | 3.87 | 0.0% | 0.00 |
| Intec Capital | 5.32 | 0.70 | 2.94% | 0.89 |
Roselabs Finance's negative price-to-book ratio of -5.57x reflects its negative equity base, whilst peers trade at positive multiples ranging from 0.70x to 5.80x. The company's 0.0% ROE compares unfavourably to Shricon Industries' impressive 21.14% or even the modest single-digit returns generated by other peers. With a market capitalisation of ₹27.00 crores, Roselabs ranks third among this peer group, though size provides no comfort given the fundamental weaknesses.
Valuation Analysis: Risky and Unmeasurable
Traditional valuation metrics prove largely inapplicable to Roselabs Finance given its loss-making status and negative book value. The P/E ratio remains "NA (Loss Making)" due to negative earnings, whilst the price-to-book ratio of -5.57x reflects the negative equity base rather than any genuine valuation assessment. The company's enterprise value-to-EBITDA multiple stands at -31.82x, a meaningless figure given negative EBITDA.
The stock's valuation grade has oscillated between "Risky" and "Very Attractive" over recent months, most recently settling at "RISKY" as of October 15, 2025. These rapid grade changes reflect the stock's extreme volatility and speculative nature rather than any fundamental improvement. At the current price of ₹26.88, the stock trades 27.76% below its 52-week high of ₹37.21 but 35.35% above its 52-week low of ₹19.86, indicating it sits in the middle of a wide trading range driven by speculation rather than fundamentals.
Technical Outlook: Mildly Bearish Amid High Volatility
The stock's technical trend turned "MILDLY BEARISH" on January 12, 2026, at ₹23.25, improving from the previous "Bearish" classification. Weekly indicators show mixed signals—MACD flashes mildly bullish whilst Bollinger Bands suggest bullish momentum, but the monthly view remains largely bearish. With a beta of 1.50, Roselabs Finance exhibits 50% higher volatility than the broader market, amplifying both gains and losses. The stock's 54.94% annual volatility classifies it as "HIGH RISK LOW RETURN," with a negative risk-adjusted return of -0.45 over the past year.
Shareholding Pattern: Stable Promoter, Zero Institutional Interest
The shareholding structure has remained remarkably stable over the past five quarters, with promoter Lodha Developers Limited maintaining a consistent 74.25% stake and retail investors holding the remaining 25.75%. The complete absence of institutional participation—zero holdings from FIIs, mutual funds, insurance companies, or other domestic institutional investors—represents a significant red flag.
| Category | Dec'25 | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|---|
| Promoter | 74.25% | 74.25% | 74.25% | 74.25% | 0.00% |
| FII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Funds | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional | 25.75% | 25.75% | 25.75% | 25.75% | 0.00% |
Institutional investors typically conduct rigorous due diligence before committing capital, and their complete absence from Roselabs Finance suggests deep concerns about governance, business viability, or financial transparency. The stable promoter holding indicates the parent company has not increased its stake to support the struggling subsidiary, nor has it diluted its position, suggesting a status quo approach rather than active intervention to turn around the business.
Stock Performance: Extreme Volatility, Long-Term Destruction
Roselabs Finance's stock price performance reveals a pattern of extreme short-term volatility superimposed on long-term value destruction. Over the past week, the stock surged 10.25% versus the Sensex's 1.73% decline, generating positive alpha of 11.98 percentage points. The one-month return of 22.74% significantly outpaced the Sensex's 3.24% decline, producing 25.98 percentage points of alpha. These short-term gains, however, reflect speculative trading rather than fundamental improvement.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +10.25% | -1.73% | +11.98% |
| 1 Month | +22.74% | -3.24% | +25.98% |
| 3 Months | -16.00% | -2.59% | -13.41% |
| 6 Months | -5.68% | +0.52% | -6.20% |
| YTD | +30.55% | -3.57% | +34.12% |
| 1 Year | -24.71% | +6.63% | -31.34% |
| 3 Years | +36.10% | +35.56% | +0.54% |
| 5 Years | +85.38% | +65.05% | +20.33% |
| 10 Years | -51.52% | +241.54% | -293.06% |
Zooming out to longer timeframes reveals the true picture. Over one year, the stock declined 24.71% whilst the Sensex gained 6.63%, resulting in negative alpha of 31.34 percentage points. The three-month return of -16.00% underperformed the Sensex by 13.41 percentage points. Most damning is the 10-year performance: a catastrophic 51.52% decline whilst the Sensex surged 241.54%, producing negative alpha of 293.06 percentage points. This long-term destruction of shareholder value underscores the company's fundamental inability to create wealth.
Investment Thesis: Multiple Red Flags, No Catalysts
Roselabs Finance's investment thesis, if one can call it that, rests on shaky foundations. The company's Mojo Score of 17 out of 100 places it firmly in "STRONG SELL" territory, with below-average quality ratings, risky valuation, flat financial trends, and mildly bearish technicals. The quality assessment highlights zero institutional holdings, weak return on equity, and a negative book value—all critical deficiencies for an NBFC.
The financial trend analysis classifies the company as "FLAT" based on Q3 FY26 results, noting that whilst some quarterly metrics like PBDIT and PAT reached their "highest" levels, these remain deeply negative figures. The positive factors cited—such as PBDIT being the "highest" at ₹-0.03 crores—merely reflect the least negative performance rather than any genuine improvement. The negative factor of cash and cash equivalents hitting their lowest level at ₹0.00 crores underscores the liquidity crisis.
✅ KEY STRENGTHS
- Stable Promoter Holding: Lodha Developers maintains 74.25% stake with no pledging, indicating parent commitment.
- Zero Debt Pledging: No promoter shares pledged against borrowings, reducing governance risk.
- Marginal Loss Reduction: Q3 FY26 loss of ₹0.04 crores improved 33.33% QoQ from ₹0.06 crores in Q2 FY26.
- Revenue Generation: ₹1.21 crores in Q3 FY26 marks first sales in three quarters, showing intermittent business activity.
- Minimal Fixed Costs: Employee costs of just ₹0.01 crores quarterly reflect lean cost structure.
⚠️ KEY CONCERNS
- Negative Book Value: Shareholder equity of ₹-4.73 crores indicates complete erosion of capital base.
- Persistent Losses: Continuous quarterly losses with no path to profitability visible.
- Zero Institutional Holdings: Complete absence of FII, MF, or insurance participation signals lack of confidence.
- Intermittent Revenue: Sporadic sales pattern with zero revenue in multiple quarters indicates no sustainable business model.
- Negative ROCE: -31.00% return on capital employed reflects value destruction and inefficient asset utilisation.
- High Volatility: Beta of 1.50 and 54.94% annual volatility create extreme price swings disconnected from fundamentals.
- Sector Underperformance: 42.65 percentage point underperformance versus NBFC sector over past year.
Outlook: What to Watch
For the rare investor still monitoring Roselabs Finance, the outlook centres on whether the company can transition from intermittent revenue to sustainable business operations, and more critically, whether it can arrest the erosion of shareholder equity. The following catalysts and red flags merit close attention:
POSITIVE CATALYSTS
- Consistent Revenue: Two consecutive quarters of positive sales would signal business model viability.
- Path to Profitability: Detailed turnaround plan from management outlining route to positive PAT.
- Capital Infusion: Fresh equity from promoter or strategic investor to rebuild shareholder funds.
- Institutional Entry: Even minimal MF or insurance participation would validate investment case.
RED FLAGS
- Return to Zero Revenue: Q4 FY26 showing nil sales would confirm unsustainable business pattern.
- Further Equity Erosion: Shareholder funds declining below ₹-5.00 crores would deepen distress.
- Debt Servicing Issues: Any default on ₹4.93 crores long-term debt would trigger serious concerns.
- Promoter Stake Reduction: Any decline in 74.25% holding would signal parent abandonment.
- Regulatory Action: RBI intervention or NBFC licence issues would be terminal events.
"With negative equity, zero institutional support, and a decade-long track record of value destruction, Roselabs Finance epitomises a distressed micro-cap NBFC offering no credible path to recovery."
The Verdict: Avoid at All Costs
Score: 17/100
For Fresh Investors: Avoid entirely. The negative book value, persistent losses, zero institutional holdings, and intermittent revenue pattern present unacceptable risks with no visible catalysts for turnaround. Numerous better-capitalised NBFCs with positive fundamentals exist in the market.
For Existing Holders: Exit on any price strength. The Q3 FY26 revenue of ₹1.21 crores and marginal loss reduction do not constitute a turnaround—they merely represent less-bad quarterly performance. With shareholder equity at ₹-4.73 crores and deteriorating further, the risk of permanent capital loss remains extremely high. Use recent 30.55% YTD gains to exit positions.
Rationale: Roselabs Finance fails on every critical investment parameter—profitability (persistent losses), quality (below average grade, zero institutional holdings), valuation (risky classification with negative book value), and momentum (mildly bearish technicals, massive sector underperformance). The 10-year return of -51.52% versus Sensex's 241.54% gain demonstrates systematic value destruction unlikely to reverse without fundamental business model transformation and significant capital infusion—neither of which appears imminent.
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. The analysis presented herein is based on publicly available information as of January 20, 2026, and may not reflect subsequent developments. Past performance is not indicative of future results, and investments in micro-cap stocks carry substantial risks including illiquidity, volatility, and potential loss of capital.
