At a Glance
Gamco Ltd, the small-cap NBFC that loves drama more than Bollywood, posted Q1 FY26 numbers with revenue of ₹52 crore (from negative sales last quarter, yes negative), and net profit of ₹15 crore. The stock jumped 8.5% to ₹43.4, yet still trades at a nosebleed P/E of 223. Promoter holding ticked up to 70.5%, meaning insiders are doubling down on their own show. Investors, meanwhile, are still scratching their heads: how does a company swing from -₹18 Cr loss to ₹15 Cr profit faster than a cricket match turnaround?
Introduction
Gamco is like that friend who vanishes for months and suddenly shows up with a sports car. You don’t know if to clap or call the cops. Incorporated in 1983, this NBFC dances between investments, lending, and random real estate ventures.
The company has had a volatile past – profits one quarter, losses the next, and a stock that ignores fundamentals like a rebellious teenager. Despite the chaos, it delivered a 272% profit CAGR over 3 years (thanks to small base effect) and returned 35% in the last year. But with a P/E higher than Dhani Services and Centrum combined, does it deserve love or suspicion? Let’s dig.
Business Model (WTF Do They Even Do?)
Gamco is technically an NBFC, but calling it that feels like an understatement. It:
- Trades equity in emerging companies,
- Lends through structured financing,
- Rents warehouses,
- Flirts with real estate development.
Essentially, they’re everywhere but nowhere in particular. This lack of focus makes them risky, but also occasionally lucky – like buying Bitcoin at $100.
Financials Overview
Numbers time – brace yourself.
Q1 FY26:
- Revenue: ₹52 Cr (last quarter: -₹6 Cr)
- EBITDA: ₹22 Cr (margin 42%)
- PAT: ₹15 Cr (loss of ₹18 Cr last quarter)
- EPS: ₹2.69
FY25 Recap:
- Revenue crashed to ₹50 Cr (from ₹211 Cr FY24).
- PAT dropped 80% to ₹5 Cr.
- OPM fell to 17.8% (from 29.1%).
So Q1 profit is a welcome surprise, but sustainability? Still a question mark bigger than their cash flow statements.
Valuation
Let’s crunch:
- P/E: EPS TTM ₹0.20, P/E 223 – insane unless profits normalize.
- P/B: 4.1x vs peers avg <2x.
- DCF/EV-EBITDA? Forget it, cash flows are erratic.
🎯 Fair Value Range: ₹20 – ₹30 (generous). Current price ₹43 is like paying for caviar but getting fish eggs.
What’s Cooking – News, Triggers, Drama
- Profit turnaround in Q1 FY26.
- Board appointed new independent director – maybe to control the chaos.
- MOA amended – deletion of deposit-related clause, could indicate business restructuring.
- Promoter holding creeping up – bullish or desperate? You decide.
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 82.4 | 114.5 | 189.4 |
| Liabilities | 69.0 | 63.3 | 132.3 |
| Net Worth | 18.3 | 51.2 | 56.7 |
| Borrowings | 63.9 | 61.2 | 132.3 |
Auditor’s Roast: Debt doubled while profits tanked – classic small-cap NBFC plot twist.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 0.53 | 0.08 | -60.3 |
| Investing | -0.28 | -1.2 | -13.5 |
| Financing | 0 | 0 | 74.0 |
Comment: Negative ops cash flow – earning profits but bleeding cash. Financing cash inflow saved them. Red flag alert.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | -14% | 47% | 9.5% |
| ROCE | -14% | 47% | 10% |
| PAT Margin | -9% | 21.5% | 17.8% |
| D/E | 0.8 | 1.0 | 2.3 |
| P/E | – | – | 223 |
Comment: Ratios swing harder than a Bollywood dance routine. Stability? Never heard of it.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 77.7 | 211.3 | 50.2 |
| EBITDA | -7.3 | 45.4 | 14.6 |
| PAT | -9.6 | 33.1 | 5.1 |
Punchline: FY24 looked like a golden year, FY25 like a hangover, and FY26 Q1? Sudden recovery. Trust issues remain.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| CRISIL | 3,381 | 728 | 53.3 |
| Dhani Services | 373 | 21 | 175 |
| Centrum Cap | 3,503 | -168 | N/A |
| Gamco Ltd | 68 | 1.05 | 223 |
Comment: Gamco has the smallest revenue and the biggest P/E. Market logic left the chat.
Miscellaneous – Shareholding, Promoters
- Promoters increased stake to 70.5% – confident or cornering liquidity?
- Public holding down to 29.5% – retailers bailing out?
- No big institutional presence – FIIs & DIIs avoiding the circus.
EduInvesting Verdict™
Gamco is a wild ride – NBFC with erratic earnings, debt spikes, and a P/E ratio that screams “speculation.”
Strengths
- High promoter confidence.
- Recent profit turnaround.
- 3-year ROE of 28%.
Weaknesses
- Inconsistent cash flows.
- P/E at ridiculous levels.
- High leverage.
Opportunities
- Restructuring and new lending models.
- Promoter buying could indicate hidden growth.
Threats
- Regulatory risks for NBFCs.
- Any slip in earnings = P/E collapse.
Final Word: Gamco is like a penny stock wearing a tuxedo. Looks fancy, but underneath it’s still risky. Traders may love the volatility, investors should carry a parachute.
Written by EduInvesting Team | 31 July 2025SEO Tags: Gamco Ltd, NBFC, Smallcap Stock, High P/E
