The quarter saw revenue growth of 9.09% QoQ to ₹371.97 crores, marking the highest quarterly sales in the company's recent history. However, this top-line expansion came at a cost, with operating margins (excluding other income) contracting sharply from 46.68% in Q2 FY26 to 41.96% in Q3 FY26. The stock closed at ₹145.70 on January 28, 2026, up 3.41% on the day but still firmly entrenched in bearish technical territory, with all major moving averages acting as resistance levels.
The December 2025 quarter marks a critical juncture for Share India Securities, as the company navigates a challenging environment characterised by rising employee costs, increased interest expenses, and deteriorating stock market sentiment. While the company has delivered impressive long-term growth—with five-year sales and EBIT CAGRs of 32.20% and 39.62% respectively—the recent quarter reveals cracks in operational efficiency that warrant close scrutiny from investors.
| Quarter | Revenue (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | QoQ Change | PAT Margin |
|---|---|---|---|---|---|
| Dec'25 | 371.97 | +9.09% | 88.55 | -4.69% | 23.87% |
| Sep'25 | 340.96 | -0.13% | 92.91 | +10.37% | 27.34% |
| Jun'25 | 341.41 | +42.59% | 84.18 | +348.72% | 24.72% |
| Mar'25 | 239.44 | -30.03% | 18.76 | -77.11% | 7.79% |
| Dec'24 | 342.20 | -24.42% | 81.96 | -33.96% | 24.02% |
| Sep'24 | 452.76 | +9.31% | 124.10 | +20.72% | 27.45% |
| Jun'24 | 414.18 | — | 102.80 | — | 24.86% |
Financial Performance: Growth Clouded by Margin Erosion
Share India Securities posted revenue of ₹371.97 crores in Q3 FY26, up 9.09% quarter-on-quarter and 8.70% year-on-year, representing the company's highest quarterly sales on record. However, this top-line expansion failed to translate into proportionate bottom-line growth, with consolidated net profit declining 4.69% QoQ to ₹88.55 crores despite the 8.04% YoY improvement. The divergence between revenue and profit growth signals mounting cost pressures that are eroding the company's profitability.
The most concerning aspect of Q3 FY26 results was the sharp compression in operating margins. Operating profit margin (excluding other income) contracted from 46.68% in Q2 FY26 to 41.96% in Q3 FY26—a decline of 468 basis points in a single quarter. Similarly, PAT margin fell from 27.34% to 23.87%, down 347 basis points QoQ. This margin deterioration reflects the company's struggle to control costs even as revenue scales new highs.
Employee costs surged 21.99% QoQ to ₹89.80 crores in Q3 FY26, representing 24.14% of revenue compared to 21.59% in the previous quarter. This sharp increase suggests either aggressive hiring, higher compensation expenses, or both—factors that could indicate the company's efforts to expand operations or retain talent in a competitive market. However, the timing of such cost escalation during a period of market volatility raises questions about operational discipline.
Interest expenses climbed to ₹34.39 crores in Q3 FY26, up from ₹33.73 crores in Q2 FY26 and significantly higher than the ₹22.47 crores recorded in Q3 FY25. The 53.08% YoY increase in interest costs reflects the company's growing debt burden, which is being deployed to fund business expansion. With a net debt-to-equity ratio of 0.22, leverage remains manageable but is trending upward.
Profitability Under Pressure: The Margin Compression Challenge
The company's return on equity (ROE) stood at an impressive 29.41% on average, reflecting efficient capital deployment over the long term. However, the latest quarter's ROE of 11.07% reveals a significant decline from historical levels, indicating that recent profitability has not kept pace with growing shareholder equity. This divergence between average and current ROE is a red flag, suggesting that the company's ability to generate returns on incremental capital has weakened.
Share India Securities' balance sheet reveals a company in expansion mode. Shareholder funds grew from ₹1,746.78 crores in FY24 to ₹2,334.02 crores in FY25, driven by retained earnings and a capital raise that increased share capital from ₹38.29 crores to ₹43.64 crores. Current assets stood at ₹2,891.40 crores as of March 2025, while current liabilities totalled ₹1,470.94 crores, providing adequate liquidity with a current ratio of approximately 1.97.
The company's investment portfolio expanded dramatically from ₹151.89 crores in FY24 to ₹357.31 crores in FY25, reflecting strategic capital deployment. However, this aggressive investment strategy comes at a time when cash flow from operations turned negative in FY25 at ₹5.00 crores, compared to a negative ₹310.00 crores in FY24. The company relied on financing cash flows of ₹274.00 crores in FY25 to fund operations and investments, raising concerns about sustainable growth.
Margin Compression Alert
Critical Concern: Operating margins (excluding other income) have contracted from 46.68% in Q2 FY26 to 41.96% in Q3 FY26—a decline of 468 basis points. Employee costs surged 21.99% QoQ, whilst interest expenses climbed 53.08% YoY. The company must demonstrate cost control in coming quarters to restore investor confidence.
Market Context: Capital Markets Sector Challenges
Share India Securities operates in the capital markets sector, which has experienced significant volatility over the past year. The company's stock performance reflects broader sector headwinds, with the capital markets sector delivering a 23.07% return over the past year whilst Share India Securities declined 37.05%—an underperformance of 60.12 percentage points. This massive underperformance suggests company-specific challenges beyond general sector trends.
The company's high beta of 1.99 indicates that it is nearly twice as volatile as the broader market, amplifying both gains and losses. This high-beta characteristic makes the stock particularly vulnerable during market downturns, as evidenced by the 29.37% decline over the past three months compared to the Sensex's 2.81% fall. The stock's volatility of 48.95% over the past year places it firmly in the "high risk" category.
Despite the recent underperformance, Share India Securities has delivered exceptional long-term returns. The stock has gained 246.54% over three years and an astounding 2,261.51% over five years, vastly outperforming the Sensex's 38.63% and 75.46% returns over the same periods. This historical outperformance suggests that the company has strong fundamentals that have been temporarily overshadowed by near-term challenges.
Industry Leadership: How Share India Securities Compares to Peers
Share India Securities trades at a price-to-earnings ratio of 11.28x, significantly below the capital markets sector average of approximately 42x and well below peers such as Indo Thai Securities (85.29x), Anand Rathi Shares (35.30x), and CARE Ratings (31.24x). This valuation discount reflects market concerns about the company's growth trajectory and margin sustainability, but also presents a potential value opportunity if the company can address operational challenges.
The company's return on equity of 29.41% stands out favourably against peers, with ICRA at 15.18%, CARE Ratings at 14.44%, and Indo Thai Securities at 10.56%. This superior ROE demonstrates Share India Securities' historical efficiency in generating returns on shareholder capital, though the recent quarterly ROE of 11.07% suggests this advantage is eroding. The company's price-to-book ratio of 1.25x is the lowest among peers, with competitors trading at multiples ranging from 2.81x to 14.72x.
Share India Securities offers a dividend yield of 0.80%, having paid a dividend of ₹0.40 per share with an ex-dividend date of November 6, 2025. This yield is competitive with ICRA (1.02%) and higher than CARE Ratings (0.50%), though the sustainability of dividends depends on the company's ability to restore margin expansion and profit growth in coming quarters.
| Company | P/E (TTM) | P/BV | ROE (%) | Div Yield (%) |
|---|---|---|---|---|
| Share India Sec. | 11.28 | 1.25 | 29.41 | 0.80 |
| ICRA | 30.29 | 5.24 | 15.18 | 1.02 |
| Canara Robeco | 26.39 | 7.41 | — | 0.59 |
| CARE Ratings | 31.24 | 5.54 | 14.44 | 0.50 |
| Anand Rathi Shar | 35.30 | 2.81 | — | — |
| Indo Thai Sec. | 85.29 | 14.72 | 10.56 | 0.04 |
Valuation Analysis: Attractive Entry Point or Value Trap?
Share India Securities' current valuation metrics suggest a stock trading at a significant discount to both its historical averages and peer group multiples. The P/E ratio of 11.28x compares favourably to the industry P/E of 22x, implying a 48.73% discount to sector valuations. The price-to-book ratio of 1.25x is substantially below the peer average of approximately 7.1x, whilst the EV/EBITDA multiple of 2.10x and EV/Sales of 0.80x indicate compressed valuations.
The company's valuation grade has been classified as "Very Attractive" since December 27, 2024, reflecting the significant de-rating from its 52-week high of ₹256.35. The stock currently trades at ₹145.70, representing a 43.16% decline from its peak and just 14.10% above its 52-week low of ₹127.70. This valuation compression creates a potential opportunity for long-term investors, though the recent margin deterioration and negative technical trends warrant caution.
The company's enterprise value metrics suggest operational efficiency, with EV/EBIT at 2.18x and EV/Capital Employed at 2.62x—both indicating that the company generates substantial earnings relative to its enterprise value and capital base. However, these attractive multiples must be weighed against the deteriorating margin profile and flat financial trend classification for the recent quarter.
Shareholding: Stable Promoter Base, Limited Institutional Interest
Promoter holding in Share India Securities stood at 48.62% as of December 2025, reflecting a marginal increase of 0.01% from the previous quarter. The promoter group, comprising members of the Gupta family and associated entities, has maintained a stable shareholding pattern over the past year, with holdings ranging between 48.44% and 48.74%. This stability suggests promoter confidence in the company's long-term prospects, though the absence of significant promoter buying during the stock's decline is noteworthy.
Foreign institutional investor (FII) holdings doubled from 0.72% in September 2025 to 1.44% in December 2025, representing a 0.72 percentage point sequential increase. This uptick in FII interest could signal growing recognition of the stock's attractive valuation, though the absolute level of FII holding remains extremely low at just 1.44%. The increase came after FII holdings had declined from 1.88% in March 2025 to 0.72% in September 2025.
Mutual fund holdings remained negligible at 0.12% in December 2025, unchanged from the previous quarter but down significantly from 0.44% in March 2025. The lack of mutual fund interest is concerning, as these institutional investors typically conduct thorough due diligence before making investment decisions. The low mutual fund participation suggests that professional fund managers remain cautious about the company's near-term prospects despite attractive valuations.
| Quarter | Promoter | FII | MF | Other DII | Non-Inst |
|---|---|---|---|---|---|
| Dec'25 | 48.62% | 1.44% | 0.12% | 0.30% | 49.53% |
| Sep'25 | 48.61% | 0.72% | 0.12% | 0.28% | 50.27% |
| Jun'25 | 48.74% | 0.98% | 0.11% | 0.28% | 49.88% |
| Mar'25 | 48.67% | 1.88% | 0.44% | 0.61% | 48.40% |
| Dec'24 | 48.44% | 1.70% | 0.36% | 0.12% | 49.38% |
Stock Performance: Severe Underperformance Across Timeframes
Share India Securities has delivered dismal stock performance over the past year, declining 37.05% whilst the Sensex gained 8.36%—resulting in a negative alpha of 45.41 percentage points. The underperformance has been particularly acute over the past three months, with the stock falling 29.37% compared to the Sensex's 2.81% decline. This severe underperformance reflects deep-seated investor concerns about the company's operational challenges and margin compression.
The stock's short-term performance has been equally weak, with declines of 14.94% over one month and 15.17% over six months, both significantly underperforming the benchmark index. Year-to-date, the stock is down 12.52% compared to the Sensex's 3.49% decline. The only bright spots are the one-day and one-week returns of 3.41% and 3.74% respectively, representing modest technical bounces from oversold levels rather than sustained recoveries.
Despite the recent carnage, Share India Securities has delivered exceptional long-term returns for patient investors. The stock has gained 92.56% over two years, 246.54% over three years, and an astounding 2,261.51% over five years—vastly outperforming the Sensex's returns of 16.33%, 38.63%, and 75.46% over the same periods. These long-term returns demonstrate the company's strong growth trajectory, though the recent reversal raises questions about whether this growth phase has peaked.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +3.74% | +0.41% | +3.33% |
| 1 Month | -14.94% | -3.29% | -11.65% |
| 3 Month | -29.37% | -2.81% | -26.56% |
| 6 Month | -15.17% | +1.68% | -16.85% |
| 1 Year | -37.05% | +8.36% | -45.41% |
| 2 Years | +92.56% | +16.33% | +76.23% |
| 3 Years | +246.54% | +38.63% | +207.91% |
| 5 Years | +2,261.51% | +75.46% | +2,186.05% |
Investment Thesis: Mixed Signals Demand Caution
Share India Securities presents a complex investment case characterised by attractive valuation metrics, strong long-term fundamentals, and concerning near-term operational trends. The company's Mojo Score of 37/100 places it firmly in "SELL" territory, reflecting the confluence of bearish technical trends, flat financial performance in the recent quarter, and significant underperformance relative to the broader market over the past year.
The investment thesis rests on four key pillars. First, valuation appears compelling, with the stock trading at a P/E of 11.28x—well below the industry average of 22x—and a price-to-book ratio of 1.25x that is substantially lower than peers. Second, the company's quality metrics remain solid, with an average ROE of 29.41% and impressive five-year growth rates. Third, the financial trend is classified as "flat" for the recent quarter, reflecting margin compression and cost pressures. Fourth, technical indicators are uniformly bearish, with the stock trading below all major moving averages and entrenched in a downtrend.
The company's proprietary score of 37/100 reflects the balance between attractive valuation (scored positively) and concerning operational trends and technical weakness (scored negatively). The rating was downgraded from "HOLD" to "SELL" in June 2025 and has remained in sell territory since then, with a brief stint in "STRONG SELL" territory in July-August 2025. The current score suggests that whilst the stock may be cheap, it is not yet cheap enough to warrant accumulation given the operational headwinds.
Key Strengths & Risk Factors
KEY STRENGTHS
- Exceptional Long-Term Growth: Five-year sales CAGR of 32.20% and EBIT CAGR of 39.62% demonstrate strong historical momentum and market share gains in the capital markets sector.
- Superior Return on Equity: Average ROE of 29.41% significantly outpaces peer group averages, reflecting efficient capital deployment and strong profitability on shareholder funds.
- Attractive Valuation: Trading at P/E of 11.28x (vs industry 22x) and P/BV of 1.25x (vs peer avg ~7.1x), offering substantial discount to both sector and peers.
- Strong Balance Sheet: Current ratio of approximately 1.97, manageable debt levels with net debt-to-equity of 0.22, and substantial cash position of ₹545 crores as of FY25.
- Stable Promoter Holding: Promoter stake of 48.62% with minimal fluctuation over past year signals confidence in long-term business prospects.
- Record Revenue Achievement: Q3 FY26 revenue of ₹371.97 crores represents the highest quarterly sales in company history, demonstrating continued business expansion.
- Increasing FII Interest: FII holdings doubled from 0.72% to 1.44% in Q3 FY26, suggesting growing institutional recognition of valuation opportunity.
KEY CONCERNS
- Severe Margin Compression: Operating margin (excl OI) contracted 468 bps QoQ from 46.68% to 41.96%, whilst PAT margin fell 347 bps from 27.34% to 23.87% in Q3 FY26.
- Escalating Employee Costs: Employee expenses surged 21.99% QoQ to ₹89.80 crores, now representing 24.14% of revenue versus 21.59% in previous quarter.
- Rising Interest Burden: Interest costs increased 53.08% YoY to ₹34.39 crores, reflecting growing debt servicing requirements as company expands operations.
- Deteriorating ROE: Latest quarterly ROE of 11.07% has declined sharply from historical average of 29.41%, indicating weakening return generation on incremental capital.
- Negative Operating Cash Flow: Cash flow from operations turned marginally positive at ₹5.00 crores in FY25 after negative ₹310 crores in FY24, raising sustainability concerns.
- Bearish Technical Setup: Stock trading below all major moving averages (5-day to 200-day), in confirmed bearish trend since January 19, 2026, with high beta of 1.99 amplifying downside volatility.
- Massive Underperformance: Stock down 37.05% over past year versus Sensex gain of 8.36%, underperforming capital markets sector by 60.12 percentage points, signalling deep investor concerns.
- Limited Institutional Support: Mutual fund holdings at just 0.12% and total institutional holdings at 1.86% reflect lack of professional investor confidence in near-term prospects.
Outlook: What to Watch
POSITIVE CATALYSTS
- Margin Recovery: Demonstration of cost control and operating leverage as revenue scales, with operating margins returning towards 45%+ levels seen in Q2 FY26.
- Sustained Revenue Growth: Continuation of QoQ revenue expansion above ₹370 crores, validating Q3 FY26 as a new baseline rather than a peak.
- Institutional Accumulation: Meaningful increase in mutual fund and FII holdings beyond current negligible levels, signalling professional investor confidence.
- Technical Reversal: Stock reclaiming key moving averages (particularly 50-day and 100-day MAs) and breaking above ₹165-170 resistance zone.
RED FLAGS
- Further Margin Erosion: Operating margins falling below 40% or PAT margins declining below 22%, indicating structural profitability challenges.
- Revenue Deceleration: QoQ revenue growth turning negative or YoY growth falling below 5%, suggesting market share loss or sector headwinds.
- Promoter Selling: Any reduction in promoter holding below 48%, which would signal lack of confidence in turnaround prospects.
- Technical Breakdown: Stock breaking below 52-week low of ₹127.70, which could trigger further technical selling and momentum deterioration.
"Share India Securities stands at a crossroads—attractive valuations and strong long-term fundamentals clash with deteriorating margins and bearish technicals, demanding proof of operational discipline before investors can confidently accumulate."
The Verdict: Wait for Operational Stabilisation
Score: 37/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst valuation appears attractive at 11.28x P/E and 1.25x P/BV, the sharp margin compression (468 bps decline in operating margin QoQ), bearish technical setup, and 37% one-year decline warrant caution. Wait for evidence of margin stabilisation, preferably with operating margins returning above 44% and PAT margins above 26%, before considering entry. A technical reversal above the 50-day moving average (₹162.20) would provide additional confidence.
For Existing Holders: Consider reducing positions on any technical bounce towards ₹160-165 levels. The company's strong long-term track record (2,261% five-year return) and superior ROE provide some comfort, but the recent operational deterioration and negative financial trend classification suggest near-term challenges persist. If holding for long-term wealth creation, maintain strict vigilance on quarterly margin trends and be prepared to exit if operating margins fall below 40% or the stock breaks below ₹127.70 (52-week low). The ₹127.70 level represents a critical support—a break below would signal deeper structural issues.
Fair Value Estimate: ₹175-185 (20-27% upside from current levels), contingent upon successful margin recovery and sustained revenue growth above ₹370 crores per quarter. Current price of ₹145.70 offers limited margin of safety given operational uncertainties.
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. The stock market involves substantial risk, and investors may lose their entire investment.
