The stock, trading at ₹39.13 as of January 28, 2026, has declined 6.72% over the past year and sits 57.63% below its 52-week high of ₹92.35. With a proprietary Mojo Score of just 3 out of 100 and a "STRONG SELL" rating, the company faces critical challenges across multiple fronts—from deteriorating financial performance to weakening operational metrics.
The quarter's results represent a dramatic reversal from the exceptional Q2 FY25 performance, when the company had posted a profit of ₹24.18 crores. The current quarter's loss deepened sequentially as well, deteriorating 62.81% from Q1 FY26's loss of ₹1.99 crores. Revenue declined 32.78% quarter-on-quarter, indicating accelerating business contraction rather than stabilisation.
| Quarter | Revenue (₹ Cr) | QoQ Change | Net Profit (₹ Cr) | YoY Change | Operating Margin |
|---|---|---|---|---|---|
| Sep'25 | 2.03 | -32.78% | -3.24 | -113.40% | -94.09% |
| Jun'25 | 3.02 | +6.34% | -1.99 | -929.17% | -38.74% |
| Mar'25 | 2.84 | -43.43% | -0.03 | -100.79% | -47.54% |
| Dec'24 | 5.02 | +49.40% | 1.78 | — | 41.04% |
| Sep'24 | 3.36 | +30.23% | 24.18 | — | 17.26% |
| Jun'24 | 2.58 | -22.52% | 0.24 | — | 27.52% |
| Mar'24 | 3.33 | — | 3.81 | — | -191.89% |
Financial Performance: A Collapse in Operational Viability
The Q2 FY26 results reveal a company in severe financial distress. Revenue of ₹2.03 crores represents the lowest quarterly figure in the available dataset, having plummeted from ₹3.36 crores in the year-ago quarter. On a sequential basis, revenue fell 32.78% from Q1 FY26's ₹3.02 crores, indicating deteriorating business momentum rather than seasonal weakness.
The operating profit margin excluding other income collapsed to -94.09% in Q2 FY26, compared to a positive 17.26% in Q2 FY25. This represents a staggering 111.35 percentage point deterioration, signalling that the company is burning cash on core operations. The absolute operating loss (excluding other income) stood at ₹1.91 crores against revenue of just ₹2.03 crores—meaning the company lost nearly as much as it earned in revenue.
Employee costs remained relatively stable at ₹0.71 crores, unchanged from Q1 FY26 but higher than the ₹0.54 crores in Q2 FY25. With revenue collapsing, employee costs now represent 35% of revenue—an unsustainable burden. Depreciation of ₹0.90 crores and interest costs of ₹0.21 crores further pressured profitability, resulting in a pre-tax loss of ₹3.34 crores.
The half-yearly performance for H1 FY26 paints an equally bleak picture. On a consolidated basis, the company reported a net loss of ₹5.23 crores on revenue of ₹5.05 crores for the six months ended September 2025. This compares unfavourably to H1 FY25, when revenue stood at ₹5.94 crores with a profit of ₹24.42 crores. The dramatic profit swing of ₹29.65 crores year-on-year underscores the severity of the operational breakdown.
⚠️ Critical Operational Breakdown
Operating losses now exceed revenue: Q2 FY26 operating loss (excluding other income) of ₹1.91 crores against revenue of ₹2.03 crores means the company loses 94 paise for every rupee of revenue generated. This is operationally unsustainable and points to fundamental business model challenges.
Cash burn accelerating: The sequential deterioration in losses (Q1: -₹1.99 Cr → Q2: -₹3.24 Cr) suggests the situation is worsening rapidly rather than stabilising.
Profitability Crisis: Negative Returns Across All Metrics
Starlog Enterprises' profitability metrics reveal a company destroying shareholder value. The Return on Equity (ROE) for H1 FY26 stands at a dismal -9.56%, compared to an average ROE of 6.18% over the assessment period. This negative ROE indicates the company is eroding shareholder capital rather than generating returns. The Return on Capital Employed (ROCE) is even worse at -11.04% for the latest period, against an average of -8.05%.
The company's inability to generate positive returns stems from persistent operating losses. Over the past five years, sales have contracted at a compound annual rate of 40.36%, whilst EBIT has grown marginally at 1.92%—though this growth is from a deeply negative base. The average EBIT to interest coverage ratio of -2.17 times indicates the company cannot service its debt obligations from operating profits.
Balance sheet quality has deteriorated significantly. Shareholder funds stood at ₹60.63 crores as of March 2025, up from ₹34.47 crores in March 2024, primarily due to a reduction in long-term debt from ₹178.87 crores to zero. Whilst debt elimination appears positive, the company achieved this through asset sales rather than operational cash generation—a concerning sign. Current liabilities of ₹25.65 crores against current assets of ₹56.26 crores provide some liquidity cushion, but with ongoing losses, this buffer is eroding rapidly.
Asset Monetisation Masks Operational Failure
The company's transition from ₹178.87 crores of long-term debt in March 2023 to zero debt by March 2025 was achieved through asset disposals rather than profit generation. This explains the exceptional Q2 FY25 profit of ₹24.18 crores (driven by one-time gains) followed by sustained losses. The crane rental business appears to have lost viability, with the company now operating a skeleton infrastructure services operation.
Industry Context: Struggling in a Challenging Transport Infrastructure Sector
The transport infrastructure sector has faced headwinds, with the sector delivering a -18.64% return over the past year. Starlog Enterprises' 1-year return of -6.72% actually outperformed the sector by 11.92 percentage points, though this provides little comfort given absolute losses. The company's struggles appear company-specific rather than sector-wide, as evidenced by peer performance.
Starlog's business model—crane rental services that evolved into infrastructure solutions—has proven unviable at current scale. The company's micro-cap status (₹59.00 crores market capitalisation) limits access to capital needed for business transformation. With fixed assets of just ₹22.84 crores as of March 2025 (down from ₹209.97 crores in March 2023), the company has essentially liquidated its asset base.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity |
|---|---|---|---|---|
| Starlog Enterp. | NA (Loss Making) | 0.83 | 6.18 | -0.16 |
| BF Utilities | 13.34 | 9.81 | 267.57 | 2.67 |
| Allcargo Termi | 17.39 | 1.98 | 14.62 | 1.85 |
| Dreamfolks Servi | 7.60 | 1.47 | 28.30 | -0.39 |
| Atlantaa | 42.77 | 1.88 | 4.85 | 0.81 |
The peer comparison reveals Starlog's profound underperformance. Whilst the company trades at a low Price-to-Book ratio of 0.83 times (below peers averaging 2-3 times), this reflects justified scepticism about asset quality and future earnings potential. The company's ROE of 6.18% lags dramatically behind profitable peers like BF Utilities (267.57%) and Dreamfolks Services (28.30%). Starlog's loss-making status prevents meaningful P/E ratio comparison.
Valuation Analysis: Cheap for a Reason
Starlog Enterprises trades at ₹39.13, representing a Price-to-Book value of just 0.83 times—a significant discount to book value. However, this apparent cheapness is deceptive. With the company loss-making, traditional valuation metrics like P/E ratio are not applicable. The Enterprise Value to EBITDA multiple of -19.93 times reflects negative EBITDA, making the stock uninvestable from a fundamental perspective.
The stock's valuation grade of "RISKY" accurately captures the investment proposition. Book value of approximately ₹47 per share (based on shareholder funds of ₹60.63 crores and 1.2 crore shares) exceeds the current market price of ₹39.13, but with ongoing losses eroding capital, this book value is declining. At the current quarterly loss run rate of ₹3 crores, the company could deplete a significant portion of shareholder equity within 5-6 quarters unless operations stabilise.
The stock has declined 57.63% from its 52-week high of ₹92.35, reached during a period when asset monetisation created temporary optimism. Trading just 22.01% above its 52-week low of ₹32.07, the stock shows little technical support. The 200-day moving average of ₹60.20 sits 53.84% above the current price, indicating a sustained downtrend with no signs of reversal.
"At ₹39.13, Starlog Enterprises trades below book value—but with quarterly losses of ₹3+ crores eroding capital rapidly, this discount offers no margin of safety for investors."
Shareholding Pattern: Promoter Reduction Raises Concerns
The shareholding pattern reveals a significant shift in promoter confidence. Promoter holding declined sharply from 64.44% in March 2025 to 51.52% by June 2025—a reduction of 12.92 percentage points. This stake sale occurred precisely when operational performance was deteriorating, raising questions about promoter conviction in the business turnaround.
| Quarter | Promoter % | QoQ Change | FII % | MF % | Non-Inst % |
|---|---|---|---|---|---|
| Dec'25 | 51.52 | 0.00 | 0.00 | 0.00 | 48.48 |
| Sep'25 | 51.52 | 0.00 | 0.00 | 0.00 | 48.48 |
| Jun'25 | 51.52 | 0.00 | 0.00 | 0.00 | 48.48 |
| Apr'25 | 51.52 | -12.92 | 0.00 | 0.00 | 48.48 |
| Mar'25 | 64.44 | — | 0.00 | 0.00 | 35.56 |
Since the June 2025 reduction, promoter holding has stabilised at 51.52%, suggesting the stake sale was a one-time event rather than ongoing dilution. However, the complete absence of institutional investors—zero FII holdings, zero mutual fund holdings, and zero insurance company holdings—speaks volumes about professional investor sentiment. The stock remains entirely in the hands of promoters (51.52%) and non-institutional investors (48.48%), limiting liquidity and institutional oversight.
Positively, there is no promoter pledging, indicating promoters are not using shares as collateral for loans. This provides some comfort that financial distress has not reached crisis levels requiring desperate financing measures. However, the lack of institutional interest and the promoter stake reduction during operational distress remain significant red flags.
Stock Performance: Persistent Underperformance Across Timeframes
Starlog Enterprises' stock performance reflects the underlying business deterioration. Over the past year, the stock has declined 6.72%, underperforming the Sensex (up 8.49%) by 15.21 percentage points. The negative alpha across most recent timeframes indicates systematic underperformance rather than temporary weakness.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +6.07% | +0.53% | +5.54% |
| 1 Month | +2.73% | -3.17% | +5.90% |
| 3 Month | -23.29% | -2.70% | -20.59% |
| 6 Month | -35.16% | +1.80% | -36.96% |
| YTD | +3.52% | -3.37% | +6.89% |
| 1 Year | -6.72% | +8.49% | -15.21% |
| 2 Years | -3.38% | +16.47% | -19.85% |
| 3 Years | +107.59% | +38.79% | +68.80% |
The 3-month return of -23.29% and 6-month return of -35.16% capture the sharp deterioration as Q1 and Q2 FY26 results revealed the extent of operational distress. The stock's volatility of 57.59% (versus Sensex volatility of 11.24%) classifies it as high-risk, with a negative risk-adjusted return of -0.12 over the past year. The Sharpe ratio is negative, indicating returns do not compensate for the risk undertaken.
Interestingly, the 3-year return of 107.59% (outperforming Sensex by 68.80 percentage points) reflects the exceptional Q2 FY25 result driven by one-time asset sale gains. However, this historical outperformance is now entirely reversed, with the stock entering a sustained bearish trend since October 2025.
Technical Analysis: Bearish Trend with Limited Support
From a technical perspective, Starlog Enterprises remains in a confirmed bearish trend since October 20, 2025, when the trend changed at ₹50.83. The stock trades below all key moving averages—5-day MA (₹37.17), 20-day MA (₹37.31), 50-day MA (₹39.68), 100-day MA (₹47.33), and 200-day MA (₹60.20)—indicating sustained selling pressure across all timeframes.
Technical indicators uniformly signal weakness. The weekly MACD shows mildly bullish signals, but monthly MACD remains mildly bearish. RSI indicates bearish momentum on monthly charts, whilst Bollinger Bands suggest mildly bearish conditions on both weekly and monthly timeframes. The KST indicator is bearish on weekly charts and mildly bearish on monthly charts. Dow Theory shows no clear trend weekly but mildly bearish monthly.
The immediate support level sits at ₹32.07 (the 52-week low), just 18% below current levels. With limited buying interest evident in the minimal trading volume of 56 shares on January 28, the stock could test this support if losses continue. Resistance levels are distant—₹47.33 (100-day MA) represents 21% upside, whilst the 200-day MA at ₹60.20 sits 54% above current levels.
Investment Thesis: Multiple Red Flags Across All Parameters
The investment thesis for Starlog Enterprises is unequivocally negative across all assessment parameters. The company's Mojo Score of 3 out of 100 places it firmly in "STRONG SELL" territory, with fundamental, technical, and quality metrics all pointing to significant risk.
The quality assessment of "BELOW AVERAGE" reflects persistent operational challenges. Five-year sales growth of -40.36% indicates systematic business contraction. Average ROCE of -8.05% and ROE of 6.18% demonstrate capital destruction. The average EBIT to interest coverage of -2.17 times means the company cannot service debt from operations. Whilst debt has been eliminated (creating a net cash position), this occurred through asset sales rather than operational strength.
The financial trend is classified as "NEGATIVE" based on 9-month FY26 performance. Net sales for the nine months ended December 2025 declined 31.84% year-on-year, whilst consolidated PAT swung from profit to a loss of ₹6.83 crores. The half-yearly ROCE of -8.14% represents the lowest level recorded, indicating accelerating capital destruction.
Key Strengths & Risk Factors
✓ Limited Strengths
- Debt-Free Status: Long-term debt eliminated, reducing financial leverage risk (though achieved through asset sales rather than profit generation)
- No Promoter Pledging: Zero pledged shares indicates promoters not using equity as loan collateral
- Established Brand: Company operational since 1983 with infrastructure services experience
- Net Cash Position: Average net debt to equity of -0.16 provides some liquidity cushion
- Valuation Discount: Trading at 0.83x book value, below intrinsic book value (though justified by losses)
✗ Critical Risk Factors
- Severe Operating Losses: Q2 FY26 operating margin of -94.09% indicates core business unviable at current scale
- Revenue Collapse: Sales declined 39.58% YoY in Q2 FY26, with sequential deterioration continuing
- Capital Destruction: Negative ROCE (-11.04%) and ROE (-9.56%) eroding shareholder value
- Promoter Stake Reduction: 12.92 percentage point decline in promoter holding during operational distress
- Zero Institutional Interest: No FII, mutual fund, or insurance holdings reflects professional investor avoidance
- Asset Base Liquidation: Fixed assets declined from ₹209.97 Cr (Mar'23) to ₹22.84 Cr (Mar'25)
- Unsustainable Cost Structure: Employee costs represent 35% of revenue with minimal revenue base
- Technical Breakdown: Bearish trend with stock below all moving averages
Outlook: What to Watch
Potential Positive Catalysts
- Revenue Stabilisation: Any quarter showing sequential revenue growth above ₹5 crores
- Margin Improvement: Operating margin turning positive, even marginally
- Business Model Pivot: Announcement of new revenue streams or strategic partnerships
- Cost Rationalisation: Significant reduction in fixed costs to match revenue reality
⚠️ Critical Red Flags to Monitor
- Continued Losses: Any quarter with losses exceeding ₹3 crores would accelerate capital erosion
- Further Promoter Selling: Additional reduction in promoter stake below 51.52%
- Cash Depletion: Closing cash declining below ₹1 crore would signal liquidity crisis
- Revenue Below ₹2 Crores: Any quarter with revenue under ₹2 crores would indicate terminal decline
- Debt Recurrence: Return to borrowing would signal inability to fund operations from internal resources
The Verdict: Avoid at All Costs
Score: 3/100
For Fresh Investors: Completely avoid. The company is operationally insolvent with negative operating margins of -94.09%, meaning it loses nearly as much as it earns in revenue. With quarterly losses of ₹3+ crores eroding shareholder capital rapidly, there is no investment case. The absence of institutional investors and promoter stake reduction during distress are major red flags.
For Existing Holders: Exit at current levels or any technical bounce. The Q2 FY26 results confirm operational collapse rather than temporary weakness. With revenue declining 39.58% YoY and losses deepening sequentially, the situation is deteriorating rather than stabilising. At the current loss run rate, significant shareholder capital will be destroyed within 12-18 months unless drastic restructuring occurs—which appears unlikely given the micro-cap constraints.
Fair Value Estimate: ₹25-28 (36% downside from current price), reflecting liquidation value with ongoing capital erosion
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. Investing in micro-cap stocks carries substantial risk of capital loss.
