Quality Assessment: Weak Fundamentals Persist
Inter Globe Finance’s quality rating remains subdued due to its underwhelming financial performance over recent quarters. The company reported flat results in Q2 FY25-26, with net sales declining sharply by 33.9% compared to the previous four-quarter average, settling at ₹45.07 crores. Profit after tax (PAT) for the nine months ended September 2025 stood at ₹2.37 crores, reflecting a steep contraction of 75.31%. This decline is symptomatic of the company’s broader operational challenges.
Long-term fundamental strength is notably weak, with an average Return on Equity (ROE) of just 2.08%, signalling limited profitability relative to shareholder equity. Operating profit has deteriorated at an alarming annualised rate of -182.28%, underscoring the company’s struggle to generate sustainable earnings growth. Additionally, a significant portion of profits—70.55% of Profit Before Tax (PBT)—is derived from non-operating income, raising concerns about the quality and sustainability of earnings.
Valuation: Risky and Overvalued Relative to Historical Norms
The stock’s valuation remains a point of caution. Despite the recent upgrade, Inter Globe Finance is trading at levels considered risky when compared to its historical averages. Over the past year, the stock has generated a negative return of -28.53%, markedly underperforming the broader market benchmark BSE500, which posted a positive return of 5.24% over the same period. This underperformance is compounded by a 132.7% decline in profits, indicating that the market’s negative sentiment is grounded in deteriorating financial results.
From a price perspective, the stock closed at ₹89.98 on 30 Dec 2025, up 1.58% from the previous close of ₹88.58. However, it remains well below its 52-week high of ₹129.00, while comfortably above its 52-week low of ₹57.60. This price range suggests some recovery potential, but the valuation premium relative to earnings remains a concern for investors prioritising fundamentals.
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Financial Trend: Flat to Negative Performance Continues
The financial trend for Inter Globe Finance remains largely flat to negative. The company’s operating profit trajectory is deeply concerning, with an annualised decline of 182.28%, signalling a severe contraction in core business profitability. The negative EBITDA and shrinking PAT further highlight the operational challenges faced by the firm.
Year-to-date (YTD) returns for the stock stand at -29.15%, while the one-year return is similarly negative at -28.53%. These figures starkly contrast with the Sensex’s positive returns of 8.39% YTD and 7.62% over one year, emphasising the stock’s underperformance relative to the broader market. However, the company’s long-term performance over five and ten years remains impressive, with returns of 1451.38% and 633.93% respectively, reflecting past growth phases that have since stalled.
Technicals: Shift from Mildly Bearish to Mildly Bullish
The primary catalyst for the recent upgrade in Inter Globe Finance’s investment rating is the improvement in technical indicators. The technical grade has shifted from mildly bearish to mildly bullish, signalling a potential change in near-term price momentum. Key technical signals include:
- MACD: Both weekly and monthly Moving Average Convergence Divergence (MACD) indicators remain mildly bearish, suggesting some lingering downward momentum.
- RSI: The Relative Strength Index (RSI) on weekly and monthly charts shows no clear signal, indicating neither overbought nor oversold conditions.
- Bollinger Bands: Weekly Bollinger Bands have turned bullish, while monthly bands remain mildly bearish, reflecting short-term price strength amid longer-term caution.
- Moving Averages: Daily moving averages are bullish, supporting the recent upward price movement.
- KST: The Know Sure Thing (KST) oscillator remains mildly bearish on both weekly and monthly timeframes, suggesting some resistance to sustained rallies.
- Dow Theory: Weekly Dow Theory signals are mildly bullish, while monthly signals remain mildly bearish, indicating mixed trends across time horizons.
Overall, these technical nuances have prompted a re-evaluation of the stock’s near-term outlook, justifying the upgrade from Strong Sell to Sell despite the fundamental headwinds.
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Market Capitalisation and Industry Context
Inter Globe Finance holds a Market Cap Grade of 4, indicating a mid-sized market capitalisation within the NBFC sector. The company’s Mojo Score currently stands at 33.0, with a Mojo Grade of Sell, reflecting the combined assessment of quality, valuation, financial trend, and technical factors. This represents an improvement from the previous Strong Sell grade, signalling a modestly less negative outlook.
Within the broader NBFC industry, Inter Globe Finance’s performance and valuation metrics lag behind many peers, particularly given its weak profitability and negative earnings trend. Investors should weigh these fundamental challenges against the recent technical improvements when considering exposure to this stock.
Price Performance Relative to Benchmarks
Examining Inter Globe Finance’s price returns relative to the Sensex reveals a mixed picture. While the stock has underperformed the Sensex over the short and medium term, it has delivered exceptional returns over longer horizons. Specifically, the stock’s 3-year return of 287.01% and 5-year return of 1451.38% far exceed the Sensex’s respective returns of 38.54% and 77.88%. However, the recent negative returns of -28.53% over one year contrast sharply with the Sensex’s positive 7.62%, highlighting the company’s current struggles.
Today’s trading range saw the stock move between ₹84.16 and ₹89.98, closing near the day’s high, which may indicate some buying interest at current levels. This price action aligns with the mildly bullish technical signals observed on daily and weekly charts.
Conclusion: Cautious Optimism Amidst Fundamental Weakness
Inter Globe Finance Ltd’s upgrade from Strong Sell to Sell reflects a nuanced reassessment driven by improved technical indicators, particularly on shorter timeframes. However, the company’s fundamental challenges remain significant, with weak profitability, declining sales, and negative earnings trends continuing to weigh on investor sentiment.
For investors, this rating change suggests a cautious approach: while the stock may offer some near-term trading opportunities due to technical momentum, the underlying financial health and valuation risks warrant careful consideration. Those seeking exposure to the NBFC sector might benefit from comparing Inter Globe Finance with stronger peers that demonstrate more robust fundamentals and growth prospects.
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