⚡ At a Glance
STC is a classic Indian PSU relic from the 50s. Once a pillar of India’s global trade, it’s now just a government-owned liability negotiation unit with a BSE listing.
- 💼 Business: Import/export trading on behalf of GoI
- 🇮🇳 Promoter: 90% Govt of India
- 📉 FY25 Sales: ₹0 Cr (not a typo)
- 💸 FY25 Net Profit: ₹26 Cr (thanks to other income)
- 🧾 Contingent Liabilities: ₹4,302 Cr 😵
- 🪫 Book Value: -₹7.05/share (Negative net worth!)
- 🔻 CMP: ₹143
- 🤷♂️ Dividend: What’s that?
🏢 WTF Do They Even Do?
Back in the day, STC used to import everything from rice and pulses to gold, coal, and fertilizers — all on behalf of the Government.
Today?
- Zero sales.
- Massive liabilities.
- Surviving purely on interest income and write-backs.
- And yet… the stock still has a ₹852 Cr market cap.
This is not a trading company.
It’s a bureaucratic zombie with a Demat account.
🔍 Recent Drama Recap – Juicy Bits 🍿
- 🧾 One-Time Settlement with 6 banks:
STC agreed to pay ₹200 Cr to settle ₹1,906 Cr dues. Yep — 89.5% haircut accepted by banks.
(Mallya is shaking somewhere.) - ⚠️ FY25 Audit Notes:
- Qualified audit
- “Going concern” doubts
- Doubtful receivables
- Overstated assets
- Literally no operating business
- 🧨 Fined ₹1.53 lakh each by BSE and NSE for delay in Q4 FY25 results.
(This is the most efficient thing that’s happened in the company all year.)
📉 Financials – Mostly Fiction, Some Magic
🧾 FY25 Summary:
- Sales: ₹0 Cr
- Operating Loss: ₹47 Cr
- Other Income: ₹98 Cr (hello, FD interest and revaluations)
- Net Profit: ₹26 Cr
- ROCE: 10.4% → Based on what, we don’t know
- Book Value: Negative ₹7.05
- Market Cap: ₹852 Cr 🤯
If this isn’t India’s most expensive shell, what is?
🧮 Valuation – Haunted House or Hidden Gem?
| Metric | Value |
|---|---|
| P/E | 21.3 (but only due to non-operating profit) |
| P/B | NA (because book value is negative) |
| ROE | Undefined |
| EV/EBITDA | LOL |
Let’s be clear: there’s no financial model that can justify this stock.
It’s a PSU lottery ticket, not a valuation case.
📊 Shareholding – Govt Party, Retail Crowd Suffering
| Category | Holding |
|---|---|
| Promoters (GoI) | 90% |
| Public | 9.5% |
| FIIs + DIIs | Combined <1% |
| Float | Minimal |
A classic PSU setup: high promoter holding, no dividend, no roadmap, no delisting. Just public investors trapped in nostalgia.
🏦 Balance Sheet Breakdown
| Metric | FY25 |
|---|---|
| Total Liabilities | ₹2,360 Cr |
| Equity Capital | ₹60 Cr |
| Reserves | ₹-102 Cr (yikes) |
| Borrowings | ₹806 Cr |
| Assets | Mostly defunct or disputed |
Fixed Assets = ₹0
Revenue = ₹0
Net Worth = ₹-42 Cr
This is basically a government NPA in disguise, except it’s listed and gets daily price updates.
💥 Contingent Liabilities = Nuclear Overhang
- ₹4,302 Cr in contingent liabilities
- Mostly legal cases, unpaid dues, counter-claims
Even though they did a one-time settlement of ₹1,906 Cr with banks, the clean-up is far from over.
In PSU-speak, “One-Time” is like “Season Finale” — there’s always another one.
📉 Stock Price Journey
| Period | Price CAGR |
|---|---|
| 10 Years | -1% |
| 5 Years | 24% (off low base) |
| 3 Years | 19% |
| 1 Year | -21% |
You could have made money… if you entered after STC had already flatlined.
🧠 EduInvesting Verdict™
“India’s First Zero-Revenue, Negative-Net-Worth, ₹850 Cr PSU Casino”
This is not a turnaround story. It’s a “don’t-turn-up-at-all” story.
If the Government doesn’t privatize, shut down, or repurpose it, the company might just exist to pay audit fees and collect interest.
📊 Fair Value Estimate?
Let’s pretend you’re insane and want to assign value here:
Scenario: Asset Realization
- Other Income (net recurring) ~ ₹80 Cr
- Apply 8x → ₹640 Cr value
- But deduct litigation risk, negative book value, no operations
🧮 FV Range = ₹30 – ₹60/share
CMP = ₹143 → You’re paying 2x fair value for a stock with no revenue, negative net worth, and PSU inefficiency baked in.
👎 Investment? Nah.
🕹️ Speculation? Maybe.
🪙 Sovereign-backed slot machine? Definitely.
✍️ Written by Prashant | 📅 July 3, 2025
Tags: State Trading Corporation, STC India, PSU zombie stocks, STC vs MMTC vs MSTC, contingent liabilities, audit red flags, value traps, EduInvesting
