With a market capitalisation of ₹251 crores and trading at ₹149.50 per share, Trishakti Industries represents a fascinating case study of operational revival meeting valuation scepticism. The company, which has been listed since 1985 and provides services to major clients including Oil & Natural Gas Corporation Ltd., has transformed from virtual dormancy in FY24 to posting meaningful quarterly profits. Yet investors remain cautious, as evidenced by the stock's mildly bearish technical trend and proprietary advisory score of just 47 out of 100, warranting a "SELL" recommendation.
Financial Performance: Exponential Growth from Low Base
The December 2025 quarter marked a continuation of Trishakti Industries' remarkable revenue acceleration. Net sales reached ₹8.00 crores in Q3 FY26, representing a 409.55% year-on-year surge from ₹1.57 crores in the corresponding quarter of the previous fiscal. On a sequential basis, revenue grew 20.30% from ₹6.65 crores in Q2 FY26, demonstrating sustained momentum across consecutive quarters.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Net Profit (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|
| Dec'25 | 8.00 | +20.30% | +409.55% | 2.41 | 30.13% |
| Sep'25 | 6.65 | +62.99% | +133.33% | 1.59 | 23.91% |
| Jun'25 | 4.08 | +99.02% | -64.24% | 0.89 | 21.81% |
| Mar'25 | 2.05 | +30.57% | — | 1.29 | 62.93% |
| Dec'24 | 1.57 | -44.91% | — | 0.01 | 0.64% |
| Sep'24 | 2.85 | -75.02% | — | 0.87 | 30.53% |
| Jun'24 | 11.41 | — | — | 1.41 | 12.36% |
The profitability metrics paint an even more compelling picture. Operating profit before depreciation, interest, and tax (excluding other income) surged to ₹5.56 crores in Q3 FY26, yielding an exceptional operating margin of 69.50%—the highest in at least eight quarters. This compares favourably to 63.06% in Q3 FY25 and 58.65% in the immediately preceding quarter. The expansion in operating margins reflects improving operational leverage as the company scales its infrastructure and exploration services business.
Net profit after tax of ₹2.41 crores translated into a PAT margin of 30.13%, up from a negligible 0.64% in the year-ago quarter. The sequential improvement from 23.91% in Q2 FY26 indicates consistent margin expansion alongside revenue growth. Notably, employee costs rose to ₹1.82 crores from ₹0.42 crores year-on-year, suggesting increased hiring to support business expansion, though the company has managed to maintain margin discipline despite this investment in human capital.
Margin Excellence Drives Profitability
Trishakti Industries achieved its highest-ever quarterly operating margin of 69.50% in Q3 FY26, demonstrating exceptional operational efficiency in its infrastructure services business. The company's ability to convert 30% of revenues into net profit whilst scaling operations represents a significant competitive strength, particularly in the capital-intensive oil & gas services sector.
Balance Sheet Transformation: Capital Infusion Fuels Growth
The company's balance sheet underwent a dramatic transformation during FY25, providing crucial insights into the recent operational resurgence. Shareholder funds more than doubled to ₹26.12 crores as of March 2025 from ₹10.72 crores in the previous fiscal year, driven by a combination of equity capital expansion (₹3.28 crores from ₹2.99 crores) and substantial reserves accumulation (₹22.83 crores from ₹7.73 crores).
Fixed assets witnessed an extraordinary expansion, soaring to ₹36.11 crores in FY25 from just ₹1.07 crores in FY24—a more than 33-fold increase. This capital deployment, funded through a combination of shareholder funds and increased current liabilities (₹42.21 crores versus ₹7.57 crores), signals aggressive capacity building to service larger infrastructure and exploration contracts. The cash flow statement for FY25 reveals ₹43 crores deployed in investing activities, corroborating this significant asset base expansion.
Whilst the company maintains zero long-term debt, the surge in current liabilities to ₹42.21 crores warrants monitoring. The current assets of ₹20.18 crores provide a current ratio of approximately 0.48, indicating potential short-term liquidity constraints. However, the nature of the company's project-based business model, where receivables from PSU clients like ONGC typically materialise over time, may explain this working capital structure.
Liquidity Watch: With current liabilities of ₹42.21 crores against current assets of ₹20.18 crores, Trishakti Industries operates with a tight working capital position. Investors should monitor quarterly cash flow trends and debtor collection cycles closely, particularly given the company's dependence on government PSU clients where payment cycles can be extended.
Return Ratios: Improving but Below Potential
Trishakti Industries' return on equity (ROE) stood at 15.45% on average, with the latest quarterly ROE at 10.47%. Whilst this represents a significant improvement from the company's dormant years, it remains below the threshold typically expected from high-growth NBFCs and infrastructure service providers. The five-year average ROE of 15.45% suggests the company has historically generated reasonable returns on shareholder capital, though the recent expansion phase may temporarily dilute these metrics as new assets are deployed.
Return on capital employed (ROCE) registered at 7.07% as of the latest reporting period, reflecting the substantial capital base expansion. This relatively modest ROCE indicates that the company's aggressive asset deployment has yet to translate into proportionate earnings, which is not uncommon during growth phases. As utilisation rates improve and the expanded asset base generates full revenue potential, ROCE should theoretically improve, though this remains a key monitoring point for investors assessing the quality of capital allocation.
Valuation Analysis: Premium Pricing for Uncertain Growth
The market has assigned Trishakti Industries a price-to-earnings ratio of 65 times trailing twelve-month earnings, representing a substantial premium to the NBFC sector average P/E of 23 times. This valuation multiple appears particularly stretched given the company's nascent revenue base and unproven sustainability of recent growth rates. The price-to-book value ratio of 6.79 times similarly reflects elevated investor expectations, especially when compared to the average P/BV of approximately 3.90 times amongst comparable micro-cap NBFCs.
| Metric | Trishakti Industries | Sector Average | Premium/Discount |
|---|---|---|---|
| P/E Ratio (TTM) | 65.0x | 23.0x | +183% Premium |
| Price to Book Value | 6.79x | ~3.90x | +74% Premium |
| EV/EBITDA | 35.79x | — | — |
| EV/Sales | 20.70x | — | — |
The PEG ratio of 2.41 suggests the stock is expensive relative to its growth trajectory, with investors paying ₹2.41 for every unit of earnings growth. Enterprise value multiples further underscore the premium valuation, with EV/EBITDA at 35.79 times and EV/Sales at 20.70 times—metrics that typically characterise high-growth technology or consumer businesses rather than infrastructure service providers.
The proprietary valuation assessment categorises Trishakti Industries as "VERY EXPENSIVE," a grade it has maintained since April 2023. This classification reflects the disconnect between current market pricing and fundamental value based on earnings power, asset quality, and growth sustainability. For context, the stock trades 27.40% above its 52-week low of ₹117.35 but remains 21.89% below its 52-week high of ₹191.40, indicating significant volatility and uncertainty around fair value.
Peer Comparison: Premium Valuation, Superior Returns
When benchmarked against micro-cap NBFC peers, Trishakti Industries commands the highest price-to-earnings multiple whilst delivering competitive return on equity. The company's 15.45% average ROE surpasses most peers, with only Stellant Securities showing superior returns at 33.26%. However, Trishakti's valuation premium appears difficult to justify purely on return metrics.
| Company | P/E (TTM) | P/BV | ROE % | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Trishakti Industries | 64.82x | 6.79x | 15.45% | 1.25x | — |
| Sakthi Finance | 14.40x | 1.06x | 6.25% | 5.45x | 1.63% |
| Stellant Securities | 7.84x | 7.38x | 33.26% | 0.00x | — |
| Landmarc Leisure | NA (Loss Making) | 8.45x | 0.00% | 0.13x | — |
| Akme Fintrade | 6.67x | 0.60x | 8.50% | 0.96x | — |
| Regency Fincorp | 23.16x | 1.89x | 4.78% | 0.84x | — |
The peer analysis reveals Trishakti Industries as an outlier on valuation metrics. Whilst the company's debt-to-equity ratio of 1.25 times sits comfortably in the middle of the peer range, its P/E multiple of 64.82 times is more than four times the peer average of approximately 13 times (excluding loss-making entities). Similarly, the P/BV ratio of 6.79 times significantly exceeds the peer median, suggesting investors are pricing in substantial future growth that has yet to materialise consistently.
Shareholding Pattern: Promoter Confidence, Institutional Absence
The shareholding structure reveals strong promoter commitment but a conspicuous absence of institutional validation. Promoter holding stood at 69.11% as of September 2025, unchanged from the June quarter but significantly higher than the 33.24% stake held in October 2024. This dramatic increase of 35.43 percentage points between October and December 2024 indicates substantial promoter buying or restructuring, potentially signalling confidence in the company's turnaround trajectory.
| Shareholder Category | Sep'25 | Jun'25 | Mar'25 | Dec'24 | QoQ Change |
|---|---|---|---|---|---|
| Promoter | 69.11% | 69.11% | 69.11% | 68.67% | Stable |
| FII | 0.00% | 0.00% | 0.00% | 0.00% | — |
| Mutual Funds | 0.00% | 0.00% | 0.00% | 0.00% | — |
| Other DII | 2.69% | 0.00% | 0.00% | 0.00% | +2.69% |
| Non-Institutional | 28.21% | 30.89% | 30.89% | 31.33% | -2.68% |
The emergence of 2.69% holding by other domestic institutional investors (DIIs) in September 2025 represents the first institutional participation in recent quarters, though this remains negligible compared to institutional holdings in established NBFCs. The complete absence of foreign institutional investors (FIIs) and mutual funds underscores the stock's micro-cap status and limited liquidity. Non-institutional holdings declined marginally to 28.21%, potentially reflecting profit-booking by retail investors following the recent rally.
Notably, the company reports zero promoter pledging, eliminating one common risk factor associated with small-cap stocks. The promoter group, led by Suresh Jhanwar (25.03%) and including family members and holding entities, maintains a consolidated position above two-thirds of equity, providing management stability but potentially limiting free float and liquidity.
Stock Performance: Multi-Year Outperformance Meets Recent Weakness
Trishakti Industries' stock performance presents a tale of two timeframes. Over longer horizons, the stock has delivered extraordinary returns, with a staggering 9,410.18% gain over five years and 1,383.13% over three years, massively outperforming the Sensex by 9,341.66 percentage points and 1,346.34 percentage points respectively. These multi-bagger returns reflect the company's transformation from virtual dormancy to operational activity.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +2.61% | -0.75% | +3.36% |
| 1 Month | +3.10% | -1.98% | +5.08% |
| 3 Months | +1.70% | -0.84% | +2.54% |
| 6 Months | -17.20% | +1.82% | -19.02% |
| 1 Year | -12.08% | +8.65% | -20.73% |
| 3 Years | +1,383.13% | +36.79% | +1,346.34% |
| 5 Years | +9,410.18% | +68.52% | +9,341.66% |
However, recent performance tells a different story. The stock has declined 12.08% over the past year, underperforming the Sensex by 20.73 percentage points, and fell 17.20% over six months against a 1.82% Sensex gain. This recent weakness, despite improving quarterly results, suggests investors are questioning the sustainability of growth or finding the valuation unattractive. The stock also underperformed its NBFC sector peers, which posted 22.05% returns over the past year, resulting in a 34.13 percentage point underperformance.
From a technical perspective, the stock exhibits a "mildly bearish" trend as of January 16, 2026, trading at ₹149.50. The stock trades below all key moving averages—5-day (₹141.30), 20-day (₹144.07), 50-day (₹145.17), 100-day (₹149.37), and 200-day (₹152.46)—indicating persistent selling pressure. With a high beta of 1.50, the stock demonstrates 50% greater volatility than the broader market, amplifying both gains and losses.
"Whilst Trishakti Industries has engineered an impressive operational turnaround, the disconnect between stellar quarterly results and negative stock performance over the past year highlights investor concerns about valuation sustainability and business model durability."
Investment Thesis: Growth Momentum Versus Valuation Risk
The investment case for Trishakti Industries rests on several competing dynamics. On the positive side, the company has demonstrated consistent sequential revenue growth across four quarters of FY26, with operating margins expanding to best-in-class levels above 69%. The infrastructure and oil & gas services sector offers structural growth opportunities, particularly given India's continued energy exploration requirements and the government's infrastructure push.
The company's financial trend is classified as "POSITIVE" based on December 2025 quarter performance, with multiple metrics—including cash balances, net sales, operating profit, and net profit—hitting multi-quarter highs. The average ROE of 15.45% demonstrates reasonable capital efficiency, whilst the absence of promoter pledging and stable promoter holding above 69% provide governance comfort.
Key Strengths
- Exceptional Margin Profile: Operating margin of 69.50% in Q3 FY26 demonstrates superior operational efficiency and pricing power in infrastructure services
- Sequential Growth Momentum: Four consecutive quarters of revenue expansion with accelerating growth rates indicates sustainable business traction
- PSU Client Base: Established relationships with ONGC and other public sector undertakings provide revenue visibility and lower credit risk
- Strong Promoter Commitment: 69.11% promoter holding with zero pledging and recent stake increase signals management confidence
- Asset Base Expansion: 33-fold increase in fixed assets to ₹36.11 crores positions company for larger contract execution
- Profitability Turnaround: Transformation from negligible profits to ₹2.41 crores quarterly PAT demonstrates business model viability
- Multi-Year Stock Performance: 9,410% five-year returns reflect successful business revival and value creation
Key Concerns
- Extreme Valuation Premium: P/E of 65x versus sector average of 23x creates significant downside risk if growth disappoints
- Working Capital Stress: Current ratio of 0.48 with ₹42.21 crores current liabilities raises liquidity concerns
- Institutional Absence: Zero FII/MF holdings and only 2.69% DII participation indicates lack of institutional validation
- Limited Operating History: Recent operational revival from dormancy creates uncertainty about sustainable earnings power
- High Volatility: Beta of 1.50 and 54.25% annualised volatility exposes investors to significant price swings
- Micro-Cap Liquidity: ₹251 crores market cap with limited free float constrains institutional participation and exit options
- Negative Recent Returns: 12.08% decline over past year despite improving fundamentals suggests valuation resistance
Outlook: Monitoring Points for Investors
The investment outlook for Trishakti Industries hinges on several critical developments over coming quarters. Investors should monitor whether the company can sustain its exceptional margin profile as it scales operations, or if competitive pressures and operating leverage normalise margins towards industry standards. The sustainability of sequential revenue growth beyond the current base effect will determine if the valuation premium can be justified.
Positive Catalysts
- 📈 Order Book Expansion: New contract wins from ONGC or other PSUs validating business model scalability
- 💰 Working Capital Improvement: Reduction in current liabilities or faster receivables collection improving liquidity
- 🏢 Institutional Entry: Mutual fund or FII participation signalling broader market acceptance
- 📊 Consistent Profitability: Maintaining quarterly PAT above ₹2 crores for next 4-6 quarters
- ⚙️ Asset Utilisation: Revenue growth outpacing asset base expansion indicating improved ROCE
Red Flags to Watch
- ⚠️ Margin Compression: Operating margins falling below 50% indicating pricing pressure or cost inflation
- 📉 Revenue Stagnation: Sequential quarterly revenue decline breaking current growth trajectory
- 💸 Cash Flow Deterioration: Negative operating cash flow or increasing working capital cycle
- 👥 Promoter Stake Reduction: Any decline in 69.11% promoter holding or emergence of pledging
- 📊 Valuation Disconnect: Stock price decline of 20%+ despite continued earnings growth
The company's ability to convert its expanded asset base into sustainable cash flows will be crucial. With ₹43 crores invested in fixed assets during FY25, investors should expect proportionate revenue and profit growth over the next 12-18 months. Any failure to achieve adequate returns on this deployed capital would validate current valuation concerns and potentially trigger significant price correction.
The Verdict: Impressive Turnaround, Prohibitive Valuation
Score: 47/100
For Fresh Investors: Avoid initiating positions at current valuation levels. Whilst the operational turnaround is genuine and impressive, the 65x P/E multiple and 6.79x P/BV ratio leave minimal margin of safety. Any growth disappointment or margin normalisation could trigger sharp corrections. Consider the stock only on significant price corrections of 30-40% from current levels, which would bring valuations closer to sector averages.
For Existing Holders: Book partial profits, particularly if holding from lower levels. The stock's 9,410% five-year return represents an extraordinary wealth creation opportunity that has largely played out. Retain a small position (25-30% of holdings) to participate in potential upside if the company sustains current growth trajectory, but protect gains accumulated during the multi-year rally. Set a strict stop-loss at ₹130 (13% downside) to limit further erosion.
Fair Value Estimate: ₹95-105 per share (35-40% downside from current price), based on 35-40x P/E multiple applied to sustainable quarterly EPS of ₹0.70-0.75, assuming margin normalisation to 50-55% operating margins and 20-22% PAT margins over next 12 months.
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 does not guarantee future results, and all investments carry risk of loss.
