The stock has reacted sharply to the company's deteriorating fundamentals, declining 4.95% to ₹15.16 on November 13, 2025, and trading significantly below all key moving averages. With a proprietary advisory score of just 17 out of 100 and a "STRONG SELL" rating, Thakral Services presents a cautionary tale of structural operational challenges, negative shareholder equity, and persistent losses that have eroded investor wealth substantially over the past year.
Financial Performance: Revenue Volatility Masks Fundamental Weakness
Thakral Services' Q2 FY26 financial performance reveals extreme revenue volatility coupled with consistently negative operating profitability. Net sales of ₹0.16 crores in Q2 FY26, whilst representing a 128.57% year-on-year surge from ₹0.07 crores in Q2 FY25, increased only 14.29% sequentially from ₹0.14 crores in Q1 FY26. This modest absolute revenue base—barely crossing ₹0.15 crores quarterly—highlights the company's severely constrained operational scale and inability to generate meaningful top-line momentum.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Net Profit (₹ Cr) | Operating Margin | PAT Margin |
|---|---|---|---|---|---|---|
| Sep'25 | 0.16 | +14.29% | +128.57% | -0.11 | -125.0% | -68.75% |
| Jun'25 | 0.14 | +55.56% | -48.15% | -0.08 | -64.29% | -57.14% |
| Mar'25 | 0.09 | 0.00% | -97.23% | 0.00 | -200.0% | 0.0% |
| Dec'24 | 0.09 | +28.57% | N/A | 0.00 | -200.0% | 0.0% |
| Sep'24 | 0.07 | -74.07% | N/A | -0.15 | -300.0% | -214.29% |
| Jun'24 | 0.27 | -91.69% | N/A | -0.10 | -74.07% | -37.04% |
| Mar'24 | 3.25 | N/A | N/A | -0.37 | -15.08% | -11.38% |
The operating profit before depreciation, interest, and tax (excluding other income) deteriorated significantly to a loss of ₹0.20 crores in Q2 FY26 from a loss of ₹0.09 crores in Q1 FY26, representing a 122.22% sequential worsening. Operating margin (excluding other income) stood at a dismal -125.0% in Q2 FY26, down from -64.29% in the previous quarter. Employee costs of ₹0.11 crores remained stable but consumed 68.75% of the meagre revenue base, highlighting severe operational inefficiency and an unsustainable cost structure relative to revenue generation capacity.
Other income of ₹0.09 crores in Q2 FY26 provided partial relief, surging from ₹0.01 crores in Q1 FY26, but this non-operating income stream underscores the company's dependence on non-core activities rather than operational excellence. The net profit after tax margin of -68.75% in Q2 FY26 reflects the fundamental inability to convert sales into positive earnings, a pattern that has persisted across multiple quarters.
Balance Sheet Distress: Negative Equity and Rising Debt Burden
Thakral Services' balance sheet presents a deeply concerning picture of financial distress. As of March 2025, shareholder funds stood at a negative ₹9.16 crores, deteriorating from negative ₹8.90 crores in March 2024. This negative equity position—comprising share capital of ₹3.52 crores offset by accumulated reserves and surplus of negative ₹12.68 crores—reflects years of sustained losses that have completely eroded the company's net worth. The book value per share of negative ₹7.81 indicates that the company owes more than it owns, a red flag for any investor.
Critical Balance Sheet Warning
Negative Shareholder Equity: With shareholder funds at negative ₹9.16 crores as of March 2025, Thakral Services has negative net worth. Accumulated losses of ₹12.68 crores have completely wiped out the company's equity base, raising serious concerns about financial viability and solvency.
Debt Burden: Long-term debt of ₹8.34 crores against negative equity results in a technically undefined debt-to-equity ratio. The company's ability to service this debt whilst generating consistent losses remains highly questionable.
Long-term debt increased to ₹8.34 crores in March 2025 from ₹7.82 crores in March 2024, representing a 6.65% rise. With negative equity, traditional leverage metrics become meaningless, but the presence of substantial debt against a loss-making operational base and negative net worth raises acute solvency concerns. Current liabilities of ₹2.56 crores (including trade payables of ₹1.35 crores) declined from ₹5.96 crores in the previous year, primarily due to a reduction in trade payables from ₹5.13 crores to ₹1.35 crores—potentially indicating stretched supplier relationships or reduced business activity.
On the asset side, fixed assets have been completely written down to zero as of March 2025, down from negligible amounts in prior years, suggesting minimal tangible operating infrastructure. Current assets of ₹1.62 crores in March 2025 declined sharply from ₹4.80 crores in March 2024, a 66.25% contraction that reflects severe liquidity constraints. Investments remained negligible at zero, down from ₹0.03 crores. The company's return on equity (ROE) is rendered meaningless by the negative book value, whilst the average ROCE of 43.26% appears artificially inflated due to negative capital employed—a statistical anomaly rather than a sign of operational efficiency.
Historical Context: A Decade of Decline and Structural Challenges
Thakral Services' current predicament is the culmination of sustained operational underperformance spanning multiple years. Annual net sales collapsed from ₹24.00 crores in FY24 to effectively zero in FY25 (₹0.00 crores as per annual data), representing a catastrophic 100% year-on-year decline. This revenue evaporation—following a 33.3% growth in FY24—suggests severe business disruption, potential loss of key contracts, or strategic retrenchment.
| Year | Net Sales (₹ Cr) | YoY Growth | Net Profit (₹ Cr) | Operating Margin | PAT Margin |
|---|---|---|---|---|---|
| Mar'25 | 0.00 | -100.0% | 0.00 | N/A | N/A |
| Mar'24 | 24.00 | +33.3% | -3.00 | -12.5% | -12.5% |
| Mar'23 | 18.00 | +12.5% | -3.00 | -11.1% | -16.7% |
| Mar'22 | 16.00 | 0.0% | -2.00 | -12.5% | -12.5% |
| Mar'21 | 16.00 | -30.4% | -1.00 | -6.2% | -6.2% |
| Mar'20 | 23.00 | N/A | 0.00 | 0.0% | 0.0% |
The company has reported net losses in four out of the last five fiscal years, with cumulative losses of ₹9.00 crores from FY21 to FY24 alone. The 5-year sales growth rate of negative 55.53% and 5-year EBIT growth rate of negative 145.73% underscore the magnitude of the structural decline. Operating margins have been persistently negative, ranging from -6.2% to -16.7% over the past five years, indicating fundamental issues with the business model, cost structure, or competitive positioning.
Cash flow analysis reveals sporadic positive operating cash flows (₹4.00 crores in FY24) driven more by working capital adjustments than sustainable operational profitability. The company generated zero net cash inflow in FY25, with closing cash also at zero, highlighting severe liquidity constraints. This cash generation weakness, combined with rising debt and negative equity, paints a picture of a company struggling to fund even basic operations.
Peer Comparison: Lagging on All Key Metrics
When benchmarked against peers in the industrial manufacturing sector, Thakral Services' underperformance becomes starkly evident. The company's ROE of 0.0% (effectively negative due to negative book value) compares unfavourably to sector peers such as Harish Textile (5.90% ROE) and Containe Tech (5.15% ROE). The price-to-book value of negative 2.04x reflects the market's recognition of the negative equity situation, contrasting sharply with peers like Harish Textile (2.25x P/BV) and Containe Tech (1.94x P/BV).
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Thakral Services | NA (Loss Making) | -2.04 | 0.0% | -0.86 | 17.79 |
| Harish Textile | 15.16 | 2.25 | 5.90% | 3.54 | N/A |
| Containe Tech | 22.47 | 1.94 | 5.15% | 0.82 | N/A |
| Benara Bearings | NA (Loss Making) | 0.92 | 1.97% | 2.75 | N/A |
| Lippi Systems | NA (Loss Making) | 0.94 | 0.0% | -0.09 | N/A |
Thakral Services ranks last amongst its peer group with the smallest market capitalisation of ₹17.79 crores, reflecting its micro-cap status and limited institutional interest. The company's inability to generate positive returns on equity, coupled with persistent losses, positions it as the weakest performer in its peer cohort. Whilst some peers like Benara Bearings and Lippi Systems also face profitability challenges, none exhibit the combination of negative equity, persistent losses, and revenue collapse seen at Thakral Services.
Valuation Analysis: Risky Classification Reflects Fundamental Distress
Thakral Services' valuation metrics are rendered largely meaningless by its loss-making status and negative book value. The company carries a "RISKY" valuation grade, having fluctuated between "Risky" and "Does Not Qualify" classifications since December 2023. With a P/E ratio of NA (loss-making) and a negative P/BV of -2.04x, traditional valuation frameworks break down entirely.
Enterprise value metrics are similarly distorted, with EV/EBITDA and EV/EBIT both at negative 26.56x due to negative operating profitability. The EV/Sales ratio of 26.56x appears elevated but is misleading given the minimal revenue base. The absence of any dividend payments (dividend yield: NA) reflects the company's inability to generate distributable profits.
The stock's 52-week range of ₹8.18 to ₹88.45 demonstrates extreme volatility, with the current price of ₹15.16 sitting 82.86% below the 52-week high and 85.33% above the 52-week low. This price action reflects speculative trading rather than fundamental value discovery. At the current market capitalisation of ₹19.00 crores against negative shareholder equity of ₹9.16 crores, the market is essentially pricing in either a turnaround hope or liquidation value—both highly uncertain propositions.
Shareholding Pattern: Stable Promoter Holding Amid Institutional Absence
Thakral Services' shareholding pattern has remained remarkably stable over the past five quarters, with promoter holding steady at 74.00% and non-institutional investors holding the remaining 26.00%. Notably, the company has zero institutional participation—no foreign institutional investors (FIIs), mutual funds, insurance companies, or other domestic institutional investors hold any stake.
| Quarter | Promoter | FII | Mutual Funds | Insurance | Other DII | Non-Institutional |
|---|---|---|---|---|---|---|
| Sep'25 | 74.00% | 0.00% | 0.00% | 0.00% | 0.00% | 26.00% |
| Jun'25 | 74.00% | 0.00% | 0.00% | 0.00% | 0.00% | 26.00% |
| Mar'25 | 74.00% | 0.00% | 0.00% | 0.00% | 0.00% | 26.00% |
| Dec'24 | 74.00% | 0.00% | 0.00% | 0.00% | 0.00% | 26.00% |
| Sep'24 | 74.00% | 0.00% | 0.00% | 0.00% | 0.00% | 26.00% |
The key promoter entities include Til Investments Pvt. Ltd. (34.33%), Paramount Park Limited (20.92%), and Thakral Investments Holdings (Mauritius) Limited (18.75%). Positively, there is no promoter pledging, suggesting promoters are not using their shares as collateral for borrowings. However, the complete absence of institutional investors signals a lack of confidence from sophisticated market participants who typically conduct rigorous due diligence.
The static shareholding pattern—with no sequential changes across five quarters—indicates minimal trading activity and suggests the stock is largely illiquid. The 26.00% non-institutional holding likely comprises retail investors, many of whom may be trapped at higher price levels given the stock's 70.99% year-to-date decline.
Stock Performance: Severe Wealth Destruction Across Timeframes
Thakral Services' stock performance has been catastrophic for investors across most timeframes. The stock has declined 54.43% over the past year, massively underperforming the Sensex's 8.74% gain by a staggering 63.17 percentage points. Year-to-date, the stock has plummeted 70.99%, whilst the Sensex has gained 8.12%, resulting in an alpha of negative 79.11%—amongst the worst in the industrial manufacturing sector.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -3.75% | 1.41% | -5.16% |
| 1 Month | -8.18% | 2.62% | -10.80% |
| 3 Months | 49.36% | 4.90% | +44.46% |
| 6 Months | 47.90% | 4.11% | +43.79% |
| Year-to-Date | -70.99% | 8.12% | -79.11% |
| 1 Year | -54.43% | 8.74% | -63.17% |
| 2 Years | 15.99% | 30.11% | -14.12% |
| 5 Years | 114.12% | 94.47% | +19.65% |
The only bright spots are the 3-month and 6-month returns of 49.36% and 47.90% respectively, which significantly outperformed the Sensex. However, these gains appear to be technical bounces from severely oversold levels (the stock hit a 52-week low of ₹8.18 in recent months) rather than reflections of fundamental improvement. The sharp recent declines of 3.75% over one week and 8.18% over one month suggest the temporary rally has lost momentum.
Over longer horizons, the stock has underperformed dramatically. The 10-year return of just 8.91% compares dismally to the Sensex's 229.87% gain, representing an alpha of negative 220.96%. The stock's beta of 1.50 indicates it is 50% more volatile than the broader market, classified as a "High Beta" stock. With a risk-adjusted return of negative 0.84 over the past year and volatility of 64.82%, the stock falls squarely into the "HIGH RISK LOW RETURN" category—the worst possible risk-return profile.
Technical Analysis: Mildly Bearish Trend with Weak Support
From a technical perspective, Thakral Services is currently in a "MILDLY BEARISH" trend, having transitioned from "Bearish" on September 1, 2025, at ₹9.71. The stock is trading below all major moving averages, including the 5-day MA (₹16.30), 20-day MA (₹15.81), 50-day MA (₹14.52), 100-day MA (₹11.97), and 200-day MA (₹23.96). This alignment of moving averages in descending order is a classic bearish technical setup, indicating sustained selling pressure.
Technical indicators present a mixed but predominantly negative picture. The MACD shows "Mildly Bullish" on the weekly timeframe but "Bearish" on the monthly timeframe. RSI is "Bearish" on the weekly chart with "No Signal" on the monthly chart. Bollinger Bands suggest "Mildly Bullish" weekly but "Mildly Bearish" monthly. The KST indicator is "Bullish" weekly but "Bearish" monthly, whilst Dow Theory shows "Mildly Bullish" with "No Trend" on the monthly chart.
Key technical levels include immediate support at the 52-week low of ₹8.18, whilst immediate resistance lies at the 20-day moving average area of ₹15.81. Major resistance is positioned at the 100-day MA of ₹11.97, with strong resistance at the 200-day MA of ₹23.96. The 52-week high of ₹88.45 represents a distant resistance level, currently 82.86% above the current price. Delivery volumes have shown increased activity, with a 1-month delivery change of 72.67%, though the absolute volumes remain thin, highlighting the stock's illiquidity.
Investment Thesis: Multiple Red Flags Outweigh Limited Positives
Thakral Services' investment thesis is overwhelmingly negative, characterised by structural operational challenges, negative shareholder equity, persistent losses, and severe wealth destruction. The company's proprietary Mojo score of 17 out of 100—firmly in "STRONG SELL" territory—reflects the confluence of adverse factors across all key investment dimensions.
The valuation is classified as "RISKY," reflecting the company's loss-making status, negative book value, and inability to generate positive cash flows. The quality grade of "BELOW AVERAGE" is based on negative 5-year sales growth of 55.53%, negative 5-year EBIT growth of 145.73%, and an average ROE of 0.0%. The financial trend is "FLAT" for Q2 FY26, with the most recent quarter showing the lowest operating profit (excluding other income) at negative ₹0.20 crores. Technical indicators point to a "MILDLY BEARISH" trend with the stock trading below all moving averages.
Key Strengths
- Zero Promoter Pledging: Promoters holding 74.00% have not pledged their shares, indicating they are not using equity as collateral for borrowings.
- Stable Promoter Holding: Promoter stake has remained steady at 74.00% over five quarters, showing commitment despite operational challenges.
- Net Cash Position (Technically): With a debt-to-equity ratio of -0.86 (due to negative equity), the company technically has a negative net debt position, though this is distorted by negative equity.
- Recent Revenue Uptick: Q2 FY26 revenue of ₹0.16 crores showed 128.57% YoY growth, albeit from a very low base.
- 3-Month Price Recovery: Stock gained 49.36% over three months, outperforming Sensex by 44.46 percentage points, suggesting some speculative interest.
Key Concerns
- Negative Shareholder Equity: Shareholder funds of negative ₹9.16 crores indicate the company owes more than it owns—a fundamental solvency concern.
- Persistent Losses: Net loss of ₹0.11 crores in Q2 FY26 extends a multi-year pattern of unprofitability with no clear path to turnaround.
- Revenue Collapse: Annual sales collapsed 100% from ₹24.00 crores in FY24 to effectively zero in FY25, indicating severe business disruption.
- Negative Operating Margins: Operating margin of -125.0% in Q2 FY26 reflects fundamental inability to cover costs from revenue.
- Zero Institutional Interest: Complete absence of FII, mutual fund, and insurance holdings signals lack of confidence from sophisticated investors.
- Severe Wealth Destruction: Stock down 54.43% over one year and 70.99% year-to-date, massively underperforming the market.
- High Volatility: Beta of 1.50 with 64.82% volatility classifies the stock as "HIGH RISK LOW RETURN."
- Minimal Scale: Quarterly revenue of just ₹0.16 crores indicates the company lacks critical mass for sustainable operations.
Outlook: What to Watch for Signs of Stabilisation or Further Deterioration
For investors monitoring Thakral Services, the outlook hinges on whether the company can achieve even minimal operational stabilisation. Given the magnitude of challenges—negative equity, persistent losses, revenue volatility, and absence of institutional backing—any potential turnaround would require fundamental restructuring, capital infusion, or strategic repositioning. The following factors warrant close monitoring:
Positive Catalysts to Monitor
- Revenue Stabilisation: Consistent quarterly revenue above ₹0.50 crores for three consecutive quarters would signal improved business traction.
- Path to Operating Profitability: Operating margin (excluding other income) turning positive would indicate cost rationalisation success.
- Capital Infusion: Equity raising or debt restructuring that improves the negative equity position to positive territory.
- Strategic Clarity: Management articulation of a clear turnaround strategy with measurable milestones and accountability.
- Institutional Entry: Even modest institutional investor participation would signal improved credibility and governance standards.
Red Flags to Watch
- Further Equity Erosion: Shareholder funds declining below negative ₹10.00 crores would indicate accelerating financial distress.
- Continued Losses: Net losses exceeding ₹0.15 crores per quarter for two consecutive quarters would confirm deterioration.
- Revenue Decline: Quarterly revenue falling back below ₹0.10 crores would signal business collapse.
- Debt Service Issues: Any defaults on the ₹8.34 crores long-term debt or inability to roll over borrowings.
- Promoter Stake Reduction: Any decline in the stable 74.00% promoter holding would signal loss of confidence.
- Regulatory Actions: Exchange surveillance actions, delisting warnings, or corporate governance concerns.
"With negative shareholder equity of ₹9.16 crores, persistent quarterly losses, and a catastrophic 70.99% year-to-date stock decline, Thakral Services exemplifies a company in severe financial distress with no clear path to recovery."
The Verdict: Avoid at All Costs
Score: 17/100
For Fresh Investors: Avoid entirely. The combination of negative shareholder equity, persistent losses, minimal revenue scale, and absence of institutional backing makes this an unsuitable investment. The "RISKY" valuation grade, "BELOW AVERAGE" quality grade, and "MILDLY BEARISH" technical trend all point to continued downside risk. With no clear turnaround catalyst and fundamental solvency concerns, fresh capital deployment here would be highly speculative with asymmetric risk-reward favouring further losses.
For Existing Holders: Exit on any technical bounce. The stock's 49.36% gain over three months represents a temporary reprieve from oversold levels, not a fundamental recovery. Use any strength towards the ₹16-18 range to liquidate positions. Holding onto hope for a turnaround whilst shareholder equity remains negative and losses persist is a recipe for continued wealth destruction. The 54.43% one-year decline and 70.99% year-to-date loss demonstrate the severe opportunity cost of remaining invested.
Fair Value Estimate: Not applicable. With negative book value and persistent losses, traditional valuation frameworks break down. The company requires fundamental restructuring and return to profitability before any fair value can be meaningfully estimated. Current market price of ₹15.16 appears to price in liquidation or distressed turnaround scenarios.
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 stocks, especially micro-cap companies with negative equity and persistent losses, involves substantial risk including the potential loss of principal.
