The December quarter results paint a troubling picture for the Mumbai-based company, which operates in trading and investment activities alongside merchant banking and leasing services. Despite net sales surging 48.60% quarter-on-quarter to ₹13.79 crores, the company's operating profit before depreciation, interest, tax and other income (PBDIT excluding OI) collapsed to a loss of ₹2.14 crores from a profit of ₹1.90 crores in the preceding quarter.
The stock, currently trading at ₹19.48, has declined 0.10% in the latest session and remains under severe pressure, down 45.11% over the past year whilst the Sensex gained 9.66%, resulting in a negative alpha of 54.77 percentage points. With promoter holding at 22.35% and zero institutional participation, the company lacks the investor confidence typically required for a turnaround.
Financial Performance: A Quarter of Deterioration
In Q3 FY26, Samyak International's consolidated net sales reached ₹13.79 crores, representing a 48.60% increase from Q2 FY26's ₹9.28 crores and a 62.24% year-on-year improvement from ₹8.50 crores in Q3 FY25. However, this top-line growth masked significant operational challenges that emerged during the quarter.
| Metric | Dec'25 | Sep'25 | Jun'25 | Mar'25 | Dec'24 |
|---|---|---|---|---|---|
| Net Sales (₹ Cr) | 13.79 | 9.28 | 8.85 | 13.47 | 8.50 |
| QoQ Growth | +48.60% | +4.86% | -34.30% | +58.47% | — |
| YoY Growth | +62.24% | +27.30% | -27.16% | — | — |
| Operating Profit (₹ Cr) | -2.14 | 1.90 | 1.26 | 0.10 | 2.07 |
| Operating Margin % | -15.52% | 20.59% | 14.27% | 0.74% | 24.73% |
| Net Profit (₹ Cr) | -0.46 | 0.95 | -0.16 | -3.58 | 1.19 |
| PAT Margin % | -3.34% | 10.23% | -1.81% | -26.58% | 14.00% |
The most alarming development was the collapse in operating profitability. Operating profit before depreciation, interest, tax and other income (excluding other income) plunged to a loss of ₹2.14 crores in Q3 FY26 from a profit of ₹1.90 crores in Q2 FY26, representing a catastrophic swing of over ₹4 crores. This resulted in an operating margin of -15.52%, compared to a healthy 20.59% in the previous quarter.
The company's profit before tax stood at a meagre ₹0.02 crores in Q3 FY26, supported entirely by other income of ₹3.04 crores. This raises significant concerns about the quality of earnings, as non-operating income constituted 15,200% of profit before tax. Without this extraordinary other income, the company would have reported a substantial operating loss.
Employee costs rose to ₹1.28 crores in Q3 FY26 from ₹0.88 crores in Q2 FY26, whilst depreciation declined to ₹0.68 crores from ₹1.15 crores. Interest expenses decreased marginally to ₹0.21 crores from ₹0.27 crores, reflecting the company's relatively low leverage with a net debt-to-equity ratio of just 0.09.
Operational Challenges: Margin Collapse and Quality Concerns
The December quarter exposed fundamental weaknesses in Samyak International's operational model. The company's inability to convert revenue growth into operating profitability suggests either severe cost inflation, pricing pressure, or a shift in business mix towards lower-margin activities.
The company's return on equity (ROE) for the latest quarter stood at a negative 2.92%, though the five-year average ROE of 6.34% indicates historically modest capital efficiency. The return on capital employed (ROCE) of 2.61% remains weak, reflecting poor returns on the capital deployed in the business.
Critical Concerns: Earnings Quality Under Scrutiny
Other Income Dependency: In Q3 FY26, other income of ₹3.04 crores represented 15,200% of profit before tax, meaning the company's core operations generated virtually no profit. This extraordinary reliance on non-operating income raises serious questions about business sustainability.
Operating Loss: Excluding other income, the company reported an operating loss of ₹3.02 crores, the worst performance in recent quarters. This suggests fundamental challenges in the core business that revenue growth alone cannot mask.
From a balance sheet perspective, the company maintains shareholder funds of ₹52.26 crores as of March 2025, with fixed assets of ₹27.81 crores and investments of ₹8.67 crores. Long-term debt stood at a modest ₹0.39 crores, indicating conservative leverage. However, current liabilities of ₹15.05 crores against current assets of ₹19.54 crores provide a current ratio of approximately 1.3, which is adequate but not robust.
The Profitability Puzzle: What Went Wrong?
The dramatic swing from a 20.59% operating margin in Q2 FY26 to a -15.52% margin in Q3 FY26 represents a deterioration of 36.11 percentage points. Several factors appear to have contributed to this collapse:
Firstly, whilst net sales increased by 48.60% quarter-on-quarter, operating expenses appear to have risen disproportionately. Employee costs jumped 45.45% from ₹0.88 crores to ₹1.28 crores, suggesting either headcount expansion or wage inflation that was not matched by productivity gains.
Secondly, the company's gross profit margin fell to 5.00% in Q3 FY26 from 17.66% in Q2 FY26, indicating severe pressure at the gross margin level. This suggests either procurement cost inflation, pricing pressure in the market, or a shift towards lower-margin products or services.
Annual Performance Context
For the full year FY25 (ended March 2025), Samyak International reported net sales of ₹41.00 crores, up 10.80% from ₹37.00 crores in FY24. However, the company reported zero profit after tax for FY25, compared to ₹3.00 crores in FY24, representing a complete erosion of profitability despite revenue growth.
Operating margins for FY25 stood at 12.20%, down from 18.90% in FY24, indicating a structural deterioration in profitability that has accelerated in recent quarters.
Peer Comparison: Struggling Amongst Strugglers
Within the diversified commercial services sector, Samyak International's performance must be viewed in the context of peer companies, many of which are also facing challenges.
| Company | P/E (TTM) | P/BV | ROE % | Debt/Equity |
|---|---|---|---|---|
| Samyak International | NA (Loss Making) | 0.29x | 6.34% | 0.09x |
| Vishvprabha Ventures | NA (Loss Making) | 2.37x | 2.61% | 2.13x |
| Innovative Ideals | 18.16x | -18.16x | 2.50% | -20.87x |
| S I Capital & Finance | 37.33x | 2.96x | 2.52% | 1.07x |
| Rapid Investments | 32.05x | 1.52x | 3.82% | 0.00x |
Samyak International trades at a price-to-book value of 0.29x, significantly below book value, which typically signals either deep value or fundamental concerns about asset quality and earnings power. The company's five-year average ROE of 6.34% is higher than most peers, though this is a low bar given the sector's overall weak profitability.
With a market capitalisation of just ₹16.00 crores, Samyak International ranks fifth amongst its peer group, reflecting its micro-cap status and limited market presence. The absence of any institutional holdings (FII, mutual fund, or insurance company participation) further underscores the lack of professional investor interest in the stock.
Valuation Analysis: Deeply Discounted for Good Reason
At the current market price of ₹19.48, Samyak International trades at a price-to-book value of 0.29x against a book value per share of ₹65.35. This 71% discount to book value might appear attractive at first glance, but the company's loss-making status and deteriorating operational metrics justify the significant markdown.
The company's P/E ratio is not meaningful given the loss-making status in recent quarters. The EV-to-EBITDA multiple of 3.62x and EV-to-sales ratio of 0.48x appear optically cheap, but these metrics must be viewed in the context of negative operating margins and uncertain earnings trajectory.
The proprietary Mojo Score of 16 out of 100 places the stock firmly in "Strong Sell" territory, reflecting the combination of bearish technical trends, flat financial performance, weak fundamental strength, and expensive valuation relative to quality. The valuation grade has been classified as "Very Expensive" since June 2025, despite the low absolute multiples, because the company lacks the earnings quality and growth visibility to justify even current levels.
Shareholding: Promoter Stability, Zero Institutional Interest
The shareholding pattern reveals a company with stable promoter holding but complete absence of institutional validation. As of December 2025, promoter holding stood at 22.35%, unchanged from the previous two quarters but down from 23.93% in March 2025.
| Shareholder Category | Dec'25 | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|---|
| Promoter | 22.35% | 22.35% | 22.35% | 23.93% | 0.00% |
| FII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Fund | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Other DII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional | 77.65% | 77.65% | 77.65% | 76.07% | 0.00% |
The 1.58 percentage point decline in promoter holding between March and June 2025 was absorbed by non-institutional investors, who now control 77.65% of the company. The complete absence of FII, mutual fund, insurance company, and other domestic institutional investor participation is a significant red flag.
Institutional investors typically conduct rigorous due diligence before investing, and their complete absence suggests either lack of awareness (unlikely for a listed company) or conscious avoidance due to concerns about business quality, governance, or growth prospects. For retail investors, this should serve as a cautionary signal.
Stock Performance: Severe Underperformance Across All Timeframes
The stock's price performance has been dismal across virtually all timeframes, with particularly severe underperformance over the past year. Trading at ₹19.48, the stock is down 45.11% over the past 12 months, compared to a 9.66% gain in the Sensex, resulting in a negative alpha of 54.77 percentage points.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -1.86% | -0.94% | -0.92% |
| 1 Month | -10.89% | -0.35% | -10.54% |
| 3 Months | -15.23% | -1.52% | -13.71% |
| 6 Months | -21.29% | +3.32% | -24.61% |
| YTD | -11.05% | -2.28% | -8.77% |
| 1 Year | -45.11% | +9.66% | -54.77% |
| 2 Years | -6.57% | +14.98% | -21.55% |
| 3 Years | -7.02% | +35.81% | -42.83% |
The stock has underperformed its sector as well, with the diversified commercial services sector delivering a 26.54% return over the past year, meaning Samyak International lagged its sector by 71.65 percentage points. This severe underperformance reflects both company-specific challenges and lack of investor confidence.
From a technical perspective, the stock is in a confirmed bearish trend, trading below all key moving averages including the 5-day (₹19.37), 20-day (₹19.91), 50-day (₹21.58), 100-day (₹22.76), and 200-day (₹26.05) moving averages. The technical indicators across weekly and monthly timeframes show bearish signals, with MACD, KST, and Dow Theory all pointing to continued weakness.
The stock's beta of 1.50 indicates it is 50% more volatile than the broader market, classified as a high-beta stock. Combined with negative returns, this creates a "high risk, low return" profile that is unfavourable for most investors. The 52-week range of ₹16.21 to ₹45.80 shows the stock is currently 57.47% below its 52-week high and just 20.17% above its 52-week low, suggesting limited downside cushion.
Investment Thesis: Multiple Red Flags Outweigh Limited Positives
The investment case for Samyak International is severely challenged by multiple fundamental and technical weaknesses that far outweigh any potential positives.
Key Strengths & Risk Factors
Key Strengths
- Revenue growth momentum with 62.24% YoY increase in Q3 FY26
- Conservative leverage with net debt-to-equity of just 0.09
- Trading at 0.29x book value, significant discount to book
- Stable promoter holding at 22.35% with no pledging
- Five-year sales CAGR of 13.34% shows historical growth capability
Key Concerns
- Operating margin collapsed to -15.52% in Q3 FY26 from 20.59% in Q2 FY26
- Net loss of ₹0.46 crores despite revenue growth, indicating operational inefficiency
- Other income dependency: 15,200% of PBT from non-operating sources
- Zero institutional holdings reflects lack of professional investor confidence
- Stock down 45.11% over past year with severe underperformance vs sector
- Weak ROE of 6.34% and ROCE of 2.61% indicate poor capital efficiency
- Quality grade "Below Average" with flat financial trend
- Bearish technical trend with stock below all moving averages
- High beta of 1.50 with negative returns creates unfavourable risk profile
Outlook: What to Watch
Positive Catalysts
- Sustained revenue growth with improved cost management
- Return to positive operating margins above 10%
- Reduction in dependency on other income for profitability
- Entry of institutional investors signalling confidence
- Improvement in ROE and ROCE metrics
Red Flags
- Continued operating losses or negative margins
- Further decline in promoter holding
- Breach of ₹16.21 support level (52-week low)
- Inability to generate profits from core operations
- Further deterioration in quality metrics
For the company to stage a meaningful recovery, it must demonstrate the ability to convert revenue growth into operating profitability, reduce reliance on other income, and improve overall earnings quality. Until these fundamental improvements materialise, the stock is likely to remain under pressure.
The Verdict: Exit Recommended
Score: 16/100
For Fresh Investors: Avoid initiating any position. The combination of operating losses, weak earnings quality, zero institutional participation, and bearish technical trends creates an unfavourable risk-reward profile. Better opportunities exist elsewhere in the market.
For Existing Holders: Consider exiting positions on any relief rallies. The deteriorating operational metrics, margin collapse, and lack of visibility on turnaround make it prudent to reallocate capital to higher-quality opportunities.
Fair Value Estimate: Given the loss-making status and operational challenges, meaningful fair value estimation is not possible. Current price of ₹19.48 appears to adequately reflect the company's weak fundamentals and uncertain outlook.
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.
