The company's Q2 FY26 results present a complex and concerning picture. While net sales showed sequential improvement at ₹13.50 crores (up 62.26% QoQ and 32.48% YoY), the reported consolidated net profit of ₹6,305.93 crores appears to be a one-time accounting adjustment rather than genuine operational improvement. The underlying operational performance remains deeply troubling, with operating profit before depreciation, interest, and tax (excluding other income) at negative ₹3.63 crores, reflecting a margin of -26.89%.
Supreme Infrastructure India's financial trajectory over recent years has been marked by consistent value destruction. The company has reported cumulative losses exceeding ₹5,000 crores in reserves and surplus, resulting in negative shareholder funds. Interest expenses continue to mount, reaching ₹155.36 crores in Q2 FY26, whilst the company generates minimal operational cash flows. This structural imbalance has persisted across multiple fiscal years, with annual losses ranging from ₹738 crores to ₹1,201 crores between FY20 and FY24.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Operating Margin | Net Profit (₹ Cr) |
|---|---|---|---|---|---|
| Sep'25 | 13.50 | +62.26% | +32.48% | -26.89% | 6,305.93 |
| Jun'25 | 8.32 | -62.45% | -68.79% | -34.50% | -399.91 |
| Mar'25 | 22.16 | +209.93% | -22.54% | -53.88% | -372.74 |
| Dec'24 | 7.15 | -29.83% | — | -59.02% | -361.88 |
| Sep'24 | 10.19 | -61.78% | — | -41.32% | -340.74 |
| Jun'24 | 26.66 | -6.82% | — | -114.40% | -350.96 |
| Mar'24 | 28.61 | — | — | -75.11% | -326.26 |
Financial Performance: Structural Operational Weakness Persists
Supreme Infrastructure India's Q2 FY26 operational performance reveals deep-seated challenges that overshadow the headline profit figure. Net sales of ₹13.50 crores, whilst showing sequential improvement from Q1 FY26's ₹8.32 crores, remain at distressed levels compared to the company's historical revenue base. The company generated annual sales of ₹677 crores in FY19, which has collapsed to just ₹58 crores in FY24—a staggering 91.43% decline over five years, representing a compound annual decline of 25.81%.
Operating profit before depreciation, interest, and tax (excluding other income) stood at negative ₹3.63 crores in Q2 FY26, translating to an operating margin of -26.89%. This metric has remained persistently negative across all recent quarters, ranging from -26.89% to -114.40% over the past seven quarters. The company's inability to generate positive operating cash flows from its core construction business reflects fundamental issues with project execution, cost management, and competitive positioning.
Interest expenses continue to weigh heavily on the income statement, reaching ₹155.36 crores in Q2 FY26. On an annualised basis, this suggests interest costs exceeding ₹600 crores, far outstripping the company's revenue generation capacity. The interest burden has remained consistently high, averaging ₹1,135 crores annually in FY24 and ₹1,102 crores in FY23. With minimal operational earnings, the company lacks the capacity to service this debt burden through internal cash generation.
The quality of earnings remains highly questionable. The reported net profit of ₹6,305.92 crores in Q2 FY26 appears to stem from a one-time accounting entry related to profit before tax of ₹6,305.92 crores, a figure that bears no relation to the company's operational reality. Excluding this anomaly, the underlying business continues to generate substantial losses, with operating profit before interest deeply negative.
Balance Sheet Distress: Negative Net Worth and Mounting Liabilities
Supreme Infrastructure India's balance sheet as of March 2024 reveals a company in severe financial distress. Shareholder funds stand at negative ₹4,870.54 crores, comprising share capital of ₹207.10 crores offset by reserves and surplus of negative ₹5,077.65 crores. This negative net worth position indicates that the company's liabilities exceed its assets by nearly ₹4,871 crores, representing a complete erosion of shareholder equity accumulated over years of persistent losses.
The company's capital structure is heavily skewed towards debt and current liabilities. Long-term debt stood at ₹1,669.00 crores as of March 2024, whilst current liabilities ballooned to ₹8,808.87 crores. Within current liabilities, other current liabilities account for ₹5,965.17 crores, suggesting significant outstanding obligations to creditors, suppliers, and potentially financial institutions. Trade payables, whilst lower at ₹39.65 crores, have declined from ₹177.32 crores in March 2022, potentially indicating reduced business activity or strained supplier relationships.
Critical Balance Sheet Warning
Negative Net Worth: Shareholder funds at negative ₹4,870.54 crores represent complete equity erosion. The company's book value per share stands at negative ₹1,965.86, indicating liabilities far exceed assets. This structural imbalance raises serious questions about the company's ability to continue as a going concern without substantial capital infusion or debt restructuring.
Debt Burden: With long-term debt of ₹1,669 crores and current liabilities of ₹8,809 crores against minimal revenue generation, the company faces an unsustainable debt servicing burden. Interest expenses alone exceed annual revenues by a factor of 20x.
On the asset side, fixed assets have declined dramatically from ₹1,216.18 crores in FY19 to just ₹90.99 crores in FY24, suggesting significant asset disposals or impairments. Current assets stood at ₹1,010.91 crores, down from ₹1,323.30 crores in FY23. Investments increased substantially to ₹1,448.09 crores from ₹22.42 crores, though the nature and liquidity of these investments remain unclear from available disclosures.
The company's return on equity (ROE) stands at 0.0%, reflecting the negative book value situation. Return on capital employed (ROCE) averaged 4.13% over recent years, a figure that appears inconsistent with persistent operational losses and likely distorted by the negative capital employed base. The average EBIT to interest coverage ratio stands at 0.0x, confirming the company's complete inability to service interest obligations from operational earnings.
Cash Flow Crisis: Negative Operating Cash Generation
Supreme Infrastructure India's cash flow statement reveals a company unable to generate positive cash flows from operations. In FY24, cash flow from operations stood at negative ₹14 crores, continuing a pattern of negative or minimal positive operating cash flows. The company generated ₹203 crores from operations in FY21 and a substantial ₹1,518 crores in FY20, but these appear to be anomalies driven by working capital adjustments rather than sustainable operational improvements.
Working capital changes have been volatile, ranging from positive ₹1,320 crores in FY20 to negative ₹184 crores in FY21. The FY24 working capital change of negative ₹5 crores, combined with adjustments of ₹1,166 crores (likely depreciation, interest, and other non-cash items), resulted in minimal operational cash generation despite reported losses of ₹1,175 crores before tax.
Cash flow from investing activities has been limited, with the company generating ₹4 crores in FY24, likely from asset disposals given the sharp decline in fixed assets. Cash flow from financing activities contributed ₹5 crores in FY24, suggesting minimal new capital raising or debt additions. The company's closing cash balance stood at just ₹2 crores in FY24, down from ₹7 crores in FY23, providing virtually no liquidity buffer.
| Metric | FY24 | FY23 | FY22 | FY21 | FY20 |
|---|---|---|---|---|---|
| Net Sales (₹ Cr) | 58.00 | 96.00 | 136.00 | 263.00 | 320.00 |
| YoY Growth | -39.60% | -29.40% | -48.30% | -17.80% | -52.70% |
| Operating Margin | -62.10% | -14.60% | -2.20% | -11.00% | +16.60% |
| Interest (₹ Cr) | 1,135.00 | 1,102.00 | 840.00 | 745.00 | 631.00 |
| PAT (₹ Cr) | -1,175.00 | -1,201.00 | -919.00 | -910.00 | -738.00 |
| Cash from Operations | -14.00 | -17.00 | -17.00 | +203.00 | +1,518.00 |
Peer Comparison: Severely Lagging Industry Standards
Supreme Infrastructure India's financial metrics place it at the bottom of its peer group across virtually every meaningful parameter. Compared to construction sector peers including A2Z Infra Engineering, Suyog Gurbaxani, Niraj Cement, and Gayatri Projects, Supreme Infrastructure exhibits the weakest financial profile.
| Company | P/E Ratio | P/BV | ROE (%) | Debt to Equity | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Supreme Infra | NA (Loss Making) | -0.04 | 0.00% | -0.46 | 244 |
| A2Z Infra Engg. | 28.73 | 6.14 | 4.27% | 1.97 | — |
| Suyog Gurbaxani | 30.61 | 8.63 | 14.80% | 3.51 | — |
| Niraj Cement | 11.20 | 0.88 | 6.69% | -0.09 | — |
| Gayatri Projects | NA (Loss Making) | -0.33 | 4.12% | -5.24 | — |
Supreme Infrastructure's ROE of 0.00% compares unfavourably to the peer average of approximately 7.47% (excluding Supreme). Suyog Gurbaxani leads with an ROE of 14.80%, demonstrating the returns achievable in the construction sector under competent management. Supreme Infrastructure's negative price-to-book value of -0.04x reflects the market's assessment that the company's liabilities substantially exceed its assets, a view corroborated by the negative shareholder funds of ₹4,870.54 crores.
The company's market capitalisation of ₹244 crores positions it as the smallest amongst its peer group, reflecting both the micro-cap nature of the stock and the market's deep scepticism about the company's viability. With 63.87% of promoter shares pledged and institutional holding at just 8.55%, the stock exhibits characteristics of severe financial stress and limited institutional confidence.
Valuation Analysis: Market Pricing in Distress Scenario
Supreme Infrastructure India's valuation metrics reflect a company trading in distress territory. The stock's price-to-book value of -0.04x indicates the market values the company at just 4% of its (negative) book value. This anomalous metric stems from the negative shareholder funds of ₹4,870.54 crores, resulting in a book value per share of negative ₹1,965.86.
Traditional valuation multiples prove meaningless for Supreme Infrastructure given persistent losses. The P/E ratio is not applicable (loss-making), whilst EV/EBITDA of -133.31x and EV/EBIT of -106.68x reflect negative operational metrics. The EV/Sales ratio of 64.79x appears elevated, but this stems from the minimal revenue base of ₹58 crores annually against enterprise value considerations including substantial debt.
The stock currently trades at ₹94.74, down 41.30% from its 52-week high of ₹161.40 but up 17.62% from its 52-week low of ₹80.55. This trading range reflects extreme volatility and speculative activity rather than fundamental value discovery. The stock's beta of 1.50 confirms high volatility, moving 50% more than the broader market.
The company's valuation grade stands at "RISKY" with a history of downgrades from "Does Not Qualify" to "Very Expensive" and back, reflecting the market's ongoing struggle to assign meaningful value to a structurally impaired business. With negative book value, persistent losses, and minimal revenue generation, traditional valuation frameworks offer limited guidance. The stock trades primarily on speculative sentiment and potential restructuring scenarios rather than fundamental business value.
Shareholding Pattern: Promoter Volatility and High Pledging
Supreme Infrastructure India's shareholding pattern reveals significant volatility and concerning trends. Promoter holding stood at 34.68% as of September 2025, down sharply from 47.32% in July 2025 (a 12.64 percentage point decline in one quarter). This followed an earlier increase from 34.68% in June 2025 to 47.32% in July 2025, suggesting significant share movements or reclassifications within the promoter group.
| Quarter | Promoter | FII | Mutual Fund | Insurance | Other DII | Non-Institutional |
|---|---|---|---|---|---|---|
| Sep'25 | 34.68% | 8.55% | 0.00% | 0.00% | 0.00% | 56.76% |
| Jul'25 | 47.32% | 2.25% | 0.00% | 0.00% | 4.70% | 45.73% |
| Jun'25 | 34.68% | 8.48% | 0.00% | 0.00% | 0.00% | 56.84% |
| Mar'25 | 34.68% | 8.48% | 0.00% | 0.00% | 0.00% | 56.84% |
| Dec'24 | 34.68% | 8.55% | 0.00% | 0.00% | 0.00% | 56.76% |
Foreign institutional investor (FII) holding increased to 8.55% in September 2025 from 2.25% in July 2025, a substantial 6.30 percentage point jump. However, mutual fund and insurance company holdings remain at zero, indicating a complete absence of domestic institutional investor interest. This lack of institutional participation reflects fundamental concerns about the company's financial viability and governance.
Non-institutional holdings, comprising retail and other investors, stood at 56.76% in September 2025, up from 45.73% in July 2025. This high proportion of non-institutional ownership, combined with zero mutual fund participation, suggests the stock is held primarily by retail investors and potentially distressed debt holders rather than quality-focused institutional investors.
Critically, 63.87% of promoter shares are pledged, indicating significant financial stress at the promoter level. This high pledging ratio raises concerns about potential forced selling in adverse market conditions and questions the promoters' ability to inject fresh capital if required. The promoter group comprises multiple entities including Supreme Lake View Bungalow Private Limited (11.12%), Bja Agro Infra Private Limited (9.99%), and various individuals from the Sharma family.
Stock Performance: Severe Underperformance Across Timeframes
Supreme Infrastructure India's stock performance has been characterised by extreme volatility and significant underperformance relative to benchmarks. Over the past year, the stock has declined 22.38%, underperforming the Sensex (+8.43%) by 30.81 percentage points and the construction sector (-6.50%) by 15.88 percentage points. Year-to-date, the stock is down 31.05% against the Sensex's gain of 9.68%, representing a negative alpha of 40.73 percentage points.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +6.41% | +0.56% | +5.85% |
| 1 Month | -3.33% | +1.27% | -4.60% |
| 3 Months | -17.47% | +7.03% | -24.50% |
| 6 Months | +1.87% | +5.40% | -3.53% |
| YTD | -31.05% | +9.68% | -40.73% |
| 1 Year | -22.38% | +8.43% | -30.81% |
| 2 Years | +171.38% | +29.52% | +141.86% |
| 3 Years | +334.59% | +37.12% | +297.47% |
| 5 Years | +924.22% | +94.13% | +830.09% |
Paradoxically, longer-term returns appear superficially impressive, with the stock up 171.38% over two years, 334.59% over three years, and 924.22% over five years. However, these returns must be contextualised against the stock's dramatic collapse from historical highs and extreme volatility. The stock's risk-adjusted return over one year stands at -0.44 with volatility of 50.41%, placing it firmly in the "HIGH RISK LOW RETURN" category.
Technical indicators uniformly point to bearish momentum. The stock trades below all major moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), indicating sustained downward pressure. The overall technical trend is classified as "BEARISH" as of November 4, 2025, with multiple indicators including MACD, Bollinger Bands, and KST showing bearish or mildly bearish signals across weekly and monthly timeframes.
The stock's beta of 1.50 indicates it moves 50% more than the broader market, amplifying both gains and losses. Combined with extreme volatility and negative risk-adjusted returns, Supreme Infrastructure represents a highly speculative investment unsuitable for risk-averse investors. Trading volumes remain thin at 1,916 shares on November 28, 2025, with delivery percentage at just 4.67%, suggesting predominantly speculative trading rather than investment-oriented buying.
Investment Thesis: Multiple Red Flags Override Any Positives
Supreme Infrastructure India's investment thesis is fundamentally negative across all critical parameters. The company's proprietary score stands at just 3 out of 100, firmly in "STRONG SELL" territory (0-30 range). This exceptionally low score reflects the confluence of negative factors: bearish technical trend, negative financial trend, weak long-term fundamental strength evidenced by negative book value, and significant underperformance relative to the market over the past year.
The company's quality grade of "BELOW AVERAGE" reflects long-term financial underperformance. Key quality metrics paint a uniformly negative picture: 5-year sales growth of -25.81%, average ROCE of just 4.13%, average ROE of 0.0%, and zero institutional holdings from mutual funds and insurance companies. The company has failed to generate sustainable operational profits, maintain positive cash flows, or demonstrate any competitive advantages in the construction sector.
The financial trend classification of "NEGATIVE" as of September 2025 highlights deteriorating operational performance. Net sales for the latest six months (H1 FY26) stood at just ₹21.82 crores, down 40.79% compared to the corresponding period. Profit after tax for the same period reached negative ₹560.05 crores (excluding the anomalous accounting entry), continuing the pattern of substantial losses.
KEY CONCERNS ⚠️
- Negative Net Worth: Shareholder funds at negative ₹4,870.54 crores represent complete equity erosion with book value per share at negative ₹1,965.86
- Persistent Losses: Cumulative losses exceeding ₹5,000 crores with annual losses ranging from ₹738 crores to ₹1,201 crores over FY20-FY24
- Revenue Collapse: Sales declined from ₹677 crores (FY19) to ₹58 crores (FY24), representing a 91.43% collapse
- Negative Operating Margins: Operating profit consistently negative across all recent quarters, ranging from -26.89% to -114.40%
- Unsustainable Interest Burden: Interest expenses of ₹1,135 crores annually far exceed revenue generation capacity
- Negative Cash Flows: Unable to generate positive operating cash flows with FY24 at negative ₹14 crores
- High Promoter Pledging: 63.87% of promoter shares pledged, indicating severe financial stress
- Zero Institutional Interest: No mutual fund or insurance holdings reflect fundamental concerns about viability
- Bearish Technical Trend: Trading below all major moving averages with uniformly bearish indicators
- Extreme Volatility: Beta of 1.50 with 50.41% volatility places stock in "HIGH RISK LOW RETURN" category
LIMITED POSITIVES ✓
- Sequential Revenue Growth: Q2 FY26 sales of ₹13.50 crores up 62.26% QoQ, though from depressed base
- Asset-Light Structure: Reduced fixed assets may provide flexibility, though reflects business contraction
- Long-Term Returns: 5-year returns of 924.22% reflect recovery from extreme lows, though with massive volatility
- Micro-Cap Potential: Small market cap of ₹244 crores could theoretically offer turnaround leverage if restructuring succeeds
Outlook: Survival Remains Primary Question
Supreme Infrastructure India's near-term outlook centres on fundamental questions of business viability and potential restructuring scenarios rather than operational improvement. With negative shareholder funds exceeding ₹4,870 crores, annual interest obligations of over ₹1,100 crores against revenues of just ₹58 crores, and persistent operational losses, the company faces existential challenges that require extraordinary measures to address.
MONITORING POINTS (Potential Stabilisation Signs)
- Debt restructuring or one-time settlement announcements
- Sustained quarterly revenue growth above ₹20 crores
- Achievement of positive operating margins for two consecutive quarters
- Fresh capital infusion or strategic investor entry
- Reduction in promoter pledging below 50%
RED FLAGS (Deterioration Signals)
- Further decline in quarterly revenues below ₹10 crores
- Widening of operating losses beyond -30% margins
- Additional promoter share pledging or forced selling
- Default on debt obligations or regulatory actions
- Continued absence of institutional investor participation
- Technical breakdown below ₹80.55 (52-week low)
The anomalous Q2 FY26 profit figure of ₹6,305.93 crores appears to be an accounting adjustment rather than operational improvement, and investors should focus on underlying business metrics which remain deeply negative. Without significant debt restructuring, fresh capital infusion, or a dramatic operational turnaround, the company's ability to continue as a going concern remains questionable.
For the stock to merit reconsideration, investors would need to see: (1) successful debt restructuring reducing the interest burden to serviceable levels, (2) sustained revenue growth with achievement of positive operating margins, (3) capital infusion to restore positive net worth, (4) institutional investor participation signalling improved confidence, and (5) technical trend reversal with sustained trading above key moving averages. None of these conditions currently exist or appear imminent.
"With negative shareholder funds of ₹4,871 crores, persistent operational losses, and interest obligations exceeding revenues by 20x, Supreme Infrastructure India faces fundamental questions of business viability that far outweigh any short-term revenue improvements."
Investment Verdict: Avoid – Severe Financial Distress
Score: 3/100
For Fresh Investors: Avoid completely. Supreme Infrastructure India exhibits all characteristics of severe financial distress including negative net worth, persistent losses, unsustainable debt burden, and collapsing revenues. The stock is suitable only for highly speculative investors with full awareness of potential total capital loss. Traditional investment analysis frameworks break down given the negative book value and loss-making operations.
For Existing Holders: Consider exiting at current levels or any technical bounce. The company's fundamental challenges—negative ₹4,871 crores in shareholder funds, ₹1,135 crores annual interest against ₹58 crores revenue, and 63.87% promoter pledging—suggest structural issues unlikely to resolve without extraordinary measures. Risk of further value erosion substantially outweighs any turnaround potential.
Fair Value Estimate: Not applicable. With negative book value and no sustainable earnings, traditional valuation methods cannot establish fair value. Current market price of ₹94.74 reflects speculative trading rather than fundamental value. Substantial downside risk exists if financial distress intensifies.
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. Supreme Infrastructure India represents an exceptionally high-risk investment with significant potential for capital loss. The analysis presented herein is based on publicly available information and may not reflect the complete financial picture or potential restructuring scenarios.
