The company, incorporated in November 1994 and registered with the Reserve Bank of India as a Non-Systematically Important Non-Deposit Taking NBFC, has seen its operational scale shrink dramatically over recent years. With equity capital of ₹4.50 crores distributed across 45.00 crore shares, the stock trades at a significant premium to its book value of ₹8.22 per share, presenting a valuation conundrum given the virtually dormant business activity.
Financial Performance: A Picture of Inactivity
The financial statements for FY24 reveal the stark reality facing S I Capital & Financial Services. For the full year Mar'24, the company reported net sales of ₹1.00 crore with total expenditure matching at ₹1.00 crore, resulting in zero operating profit and zero profit after tax. This pattern represents a continuation of minimal activity that has characterised the company's operations in recent years.
Historical quarterly data from Mar'16 and Mar'15 provides additional context. In Q4 FY16, the company posted net sales of ₹1.91 crores, marking a sequential growth of 49.22% from ₹1.28 crores in Mar'15. However, the company recorded a net loss of ₹0.42 crores in Mar'16 compared to a modest profit of ₹0.03 crores in the previous quarter. The operating margin excluding other income deteriorated sharply to -16.96% in Mar'16 from -7.13% in Mar'15, whilst PAT margin plunged to -21.99% from 2.66%.
Critical Concern: Near-Zero Revenue Generation
The company's financial statements show virtually no meaningful revenue generation in FY24, with net sales of just ₹1.00 crore and zero profitability. This minimal activity level raises serious questions about the company's operational viability and strategic direction as a registered NBFC and money changer.
Balance Sheet Quality: Deteriorating Fundamentals
The balance sheet as of Mar'24 reveals concerning trends in the company's financial health. Shareholder funds stood at ₹2.96 crores, comprising share capital of ₹3.60 crores and negative reserves of ₹0.64 crores. This represents a decline from ₹3.29 crores in Mar'23, indicating erosion of shareholder value. The negative reserves have expanded from ₹0.23 crores in Mar'23 to ₹0.64 crores in Mar'24, reflecting accumulated losses.
Current liabilities surged dramatically to ₹7.33 crores in Mar'24 from ₹2.75 crores in Mar'23, a 166% increase that significantly outpaces the company's asset base. Current assets remained subdued at ₹0.70 crores, up marginally from ₹0.57 crores, creating a severe working capital deficit. Fixed assets increased modestly to ₹0.19 crores from ₹0.15 crores, representing minimal capital investment.
The company's debt-to-equity ratio of 1.07 indicates elevated leverage for an entity with minimal revenue generation. With no long-term debt on the books, the leverage appears concentrated in current liabilities, which have ballooned disproportionately relative to the company's operational scale.
| Balance Sheet Item | Mar'24 | Mar'23 | Mar'22 | Change (YoY) |
|---|---|---|---|---|
| Shareholder Funds | ₹2.96 Cr | ₹3.29 Cr | ₹2.47 Cr | ▼ 10.03% |
| Current Liabilities | ₹7.33 Cr | ₹2.75 Cr | ₹1.12 Cr | ▲ 166.55% |
| Current Assets | ₹0.70 Cr | ₹0.57 Cr | ₹0.79 Cr | ▲ 22.81% |
| Fixed Assets | ₹0.19 Cr | ₹0.15 Cr | ₹0.10 Cr | ▲ 26.67% |
Cash Flow Analysis: Financing-Dependent Operations
The cash flow statement for Mar'24 reveals a troubling pattern of cash generation and deployment. Cash flow from operations was negative at ₹4.00 crores, driven by adverse changes in working capital of ₹4.00 crores. This operational cash burn was entirely funded through cash flow from financing activities of ₹4.00 crores, indicating complete dependence on external funding to sustain even minimal operations.
This pattern repeated in Mar'23, where operational cash flow was negative ₹2.00 crores, offset by financing inflows of ₹2.00 crores. The company generated no cash from investing activities in recent years, with the exception of ₹1.00 crore in Mar'19. The closing cash position remained at zero across Mar'24, Mar'23, and Mar'22, highlighting the company's inability to generate and retain cash from operations.
Profitability Metrics: Weak Capital Efficiency
S I Capital & Financial Services' profitability metrics underscore the challenges facing the business. The company's average return on equity (ROE) stands at a meagre 2.52%, significantly below acceptable thresholds for financial services companies. Whilst the latest ROE improved to 12.59%, this appears to be an anomaly given the near-zero profit generation in recent periods.
Return on capital employed (ROCE) registered at 12.34% as of the latest calculation, though this metric must be viewed with caution given the minimal operational scale. The company's five-year sales growth of 31.42% and EBIT growth of 20.78% appear mathematically inflated due to the low base effect and intermittent periods of activity.
Key Quality Concern
The company's quality assessment is rated "Below Average" by proprietary scoring systems, reflecting weak long-term financial performance with an average ROE of just 2.52%. The institutional holding of merely 0.18% indicates minimal confidence from sophisticated investors, whilst the high debt-to-equity ratio of 1.07 adds financial risk to an already challenged business model.
Shareholding Pattern: Stable but Uninspiring
The shareholding pattern as of Dec'25 shows promoter holding steady at 39.47%, unchanged from Sep'25. However, promoter stake declined from 41.10% in Jun'25 to 39.47% in Jul'25, representing a reduction of 1.63 percentage points. This decline, though modest, is noteworthy given the company's operational challenges.
Institutional participation remains negligible, with FII holding at 0.00%, mutual fund holding at 0.00%, and insurance holdings at 0.00%. Other domestic institutional investors (DII) hold a mere 0.18%, unchanged over recent quarters. Non-institutional shareholders comprise 60.34% of the equity base, having increased from 58.71% following the promoter stake reduction in Jul'25.
| Shareholder Category | Dec'25 | Sep'25 | Jul'25 | Jun'25 | QoQ Change |
|---|---|---|---|---|---|
| Promoter Holding | 39.47% | 39.47% | 39.47% | 41.10% | 0.00% |
| FII Holding | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Fund | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Other DII | 0.18% | 0.18% | 0.18% | 0.19% | 0.00% |
| Non-Institutional | 60.34% | 60.34% | 60.34% | 58.71% | 0.00% |
The promoter entity, Sharewealth Securities Ltd., holds the entire 39.47% promoter stake. Notably, there is no pledging of promoter shares, which provides some comfort regarding financial stress at the promoter level. However, the absence of institutional investors and the minimal DII participation signal a lack of confidence in the company's prospects amongst professional investors.
Valuation Analysis: Premium Without Justification
At the current market price of ₹34.00, S I Capital & Financial Services trades at a P/E ratio of 24.00x, which appears elevated given the company's operational inactivity. The price-to-book value ratio of 2.96x represents a substantial premium to the book value of ₹8.22 per share, raising questions about valuation rationality.
The company's EV/EBITDA multiple of 15.41x and EV/EBIT of 16.06x seem disconnected from operational reality, given the minimal EBITDA and EBIT generation. The EV/Sales ratio of 7.22x suggests the market is valuing the company at over seven times its negligible revenue base. The PEG ratio of 0.12x appears mathematically attractive but is misleading given the erratic and minimal earnings profile.
Despite these elevated multiples relative to operational performance, the proprietary valuation assessment rates the stock as "Very Attractive" as of Feb 11, 2026. This valuation grade changed from "Fair" to "Very Attractive" on Oct 27, 2025, following a series of downgrades earlier in the year. The stock trades 33.81% below its 52-week high of ₹51.37 and 34.44% above its 52-week low of ₹25.29.
| Valuation Metric | Current Value | Assessment |
|---|---|---|
| P/E Ratio (TTM) | 24.00x | Elevated for minimal earnings |
| Price to Book Value | 2.96x | Substantial premium to book |
| EV/EBITDA | 15.41x | High for negligible EBITDA |
| EV/Sales | 7.22x | Expensive relative to revenue |
| 52-Week Range | ₹25.29 - ₹51.37 | Currently at ₹34.00 |
Stock Performance: Short-Term Gains Mask Long-Term Weakness
The stock has delivered mixed returns across different timeframes. Over the past week, S I Capital & Financial Services gained 10.93%, outperforming the Sensex by 10.46 percentage points. The one-month return of 21.43% and three-month return of 26.72% demonstrate strong recent momentum, with alpha of 20.66% and 26.31% respectively over the benchmark.
Year-to-date, the stock has returned 21.86%, significantly ahead of the Sensex's -1.18% decline, generating alpha of 23.04%. However, the six-month performance tells a different story, with the stock declining 5.56% whilst the Sensex gained 4.48%, resulting in negative alpha of 10.04%.
Over longer periods, the picture deteriorates. The two-year return of 30.77% exceeds the Sensex's 17.63% by 13.14 percentage points, but the five-year return of 25.93% significantly underperforms the benchmark's 63.43% gain, producing negative alpha of 37.50%. One-year, three-year, four-year, and ten-year return data are not available, limiting comprehensive performance analysis.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +10.93% | +0.47% | +10.46% |
| 1 Month | +21.43% | +0.77% | +20.66% |
| 3 Months | +26.72% | +0.41% | +26.31% |
| 6 Months | -5.56% | +4.48% | -10.04% |
| YTD | +21.86% | -1.18% | +23.04% |
| 2 Years | +30.77% | +17.63% | +13.14% |
| 5 Years | +25.93% | +63.43% | -37.50% |
The stock's technical trend is classified as "Mildly Bearish" as of Feb 11, 2026, having changed from "Bearish" on Jan 21, 2026. The stock trades above its 5-day moving average of ₹31.93 but remains below the 20-day MA of ₹29.11, 50-day MA of ₹29.81, and 100-day MA of ₹34.16. The absence of a 200-day moving average limits longer-term trend analysis.
Peer Comparison: Relative Positioning in Micro-Cap Space
Within the diversified commercial services sector, S I Capital & Financial Services occupies the fourth position by market capitalisation amongst its peer group. The company's P/E ratio of 23.52x is lower than the peer average, whilst its ROE of 2.52% is amongst the weakest in the group.
Comparative analysis reveals that S I Capital & Financial Services has a higher price-to-book value of 2.96x compared to most peers, despite its weak operational metrics. The debt-to-equity ratio of 1.07 positions the company in the middle of the peer range, with some peers exhibiting negative or extremely low leverage ratios.
| Company | P/E (TTM) | ROE | Debt/Equity | P/BV |
|---|---|---|---|---|
| S I Cap. & Fin. | 23.52x | 2.52% | 1.07 | 2.96x |
| Sawaca Enterpri. | NA (Loss Making) | 2.58% | 0.04 | 0.34x |
| Vishvprabha Ven. | NA (Loss Making) | 2.61% | 2.13 | 2.54x |
| Innovative Ideal | 18.01x | 2.50% | -20.87 | -18.01x |
| Samyak Internati | NA (Loss Making) | 6.34% | 0.09 | 0.29x |
| Rapid Invest. | 29.90x | 3.82% | 0.00 | 1.52x |
The peer comparison highlights that S I Capital & Financial Services is not alone in struggling with weak returns and operational challenges within the micro-cap diversified commercial services space. However, the company's elevated valuation multiples relative to its operational performance stand out as particularly concerning.
Investment Thesis: Multiple Red Flags Outweigh Valuation Appeal
The proprietary Mojo Score for S I Capital & Financial Services stands at 31 out of 100, placing it firmly in the "SELL" category. The overall advisory rating is "SELL" with a recommendation to consider selling and look for exit opportunities. The score improved from 26 (Strong Sell) on Feb 1, 2026, but remains well below the threshold for even a neutral rating.
The Mojo 4 Dots analysis reveals mixed signals. The valuation parameter scores positively as "Very Attractive," reflecting the stock's decline from higher levels. However, the quality assessment remains "Below Average," the financial trend is classified as "Flat," and the technical trend is "Mildly Bearish." This combination of one positive factor against three neutral-to-negative factors results in an overall "Mixed" assessment that leans bearish.
Key Strengths & Risk Factors
KEY STRENGTHS ✓
- Regulatory Status: Registered with RBI as NBFC and full-fledged money changer, providing operational legitimacy
- Recent Price Momentum: Strong gains of 21.43% over one month and 26.72% over three months
- No Promoter Pledging: Zero pledging of promoter shares indicates no immediate financial stress at promoter level
- Valuation Grade: Rated "Very Attractive" by proprietary metrics following price correction from 52-week high
- Established Presence: Company incorporated in 1994 with over three decades of existence
KEY CONCERNS ⚠️
- Negligible Revenue: Net sales of just ₹1.00 crore in FY24 with zero profitability across all metrics
- Deteriorating Balance Sheet: Current liabilities surged 166% to ₹7.33 crores whilst assets remain minimal
- Negative Cash Generation: Operational cash flow negative ₹4.00 crores in FY24, entirely funded by external financing
- Weak Profitability: Average ROE of 2.52% significantly below acceptable thresholds for financial services
- Zero Institutional Interest: FII, MF, and insurance holdings all at 0.00%, signalling lack of confidence
- High Leverage: Debt-to-equity of 1.07 despite minimal business operations
- Promoter Stake Reduction: Promoter holding declined from 41.10% to 39.47% in Jul'25
Outlook: What Lies Ahead
POSITIVE CATALYSTS
- Resumption of meaningful business operations with revenue generation
- Reduction in current liabilities and improvement in working capital position
- Positive operational cash flow indicating self-sustaining business model
- Institutional investor participation signalling confidence in turnaround
- Clear strategic direction and business plan from management
RED FLAGS TO MONITOR
- Continued near-zero revenue generation in upcoming quarters
- Further deterioration in balance sheet with expanding liabilities
- Ongoing negative operational cash flow requiring external funding
- Additional reduction in promoter stake or emergence of pledging
- Regulatory concerns or loss of NBFC/money changer licences
The Verdict: Avoid Until Operational Clarity Emerges
Score: 31/100
For Fresh Investors: Avoid initiating positions. The company's near-zero revenue generation, deteriorating balance sheet, and complete absence of institutional interest present substantial risks that far outweigh any perceived valuation appeal. The business model appears dormant, and there is no clear catalyst for operational improvement.
For Existing Holders: Consider exiting positions during periods of price strength. The recent momentum appears disconnected from operational fundamentals. With operational cash flow deeply negative and the company entirely dependent on external financing, the risk of further value erosion remains high. Wait for concrete evidence of business revival before reconsidering.
Fair Value Estimate: ₹15.00-18.00 (50-56% downside from current levels), based on book value and minimal operational activity
The combination of negligible business activity, weak balance sheet quality, and absence of institutional confidence makes S I Capital & Financial Services unsuitable for investment until clear operational improvements materialise. The elevated valuation multiples relative to non-existent earnings present significant downside risk.
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.
