Nexome Capital Markets Ltd Q2 FY26 – From Merchant Banking Glory to ECL Horror: ₹1,450.66 Lakh Expected Credit Loss Drops Like a Bomb on the Balance Sheet
1. At a Glance
Ladies and gentlemen, welcome to the most dramatic quarterly report of FY26 — featuring Nexome Capital Markets Ltd, formerly known as SMIFS Capital Markets Ltd. Picture this: a ₹59.4 crore market cap company trading at ₹101/share, down a painful 31.6% in just three months, yet still holding onto a P/E of 21x like it’s clinging to its glory days in Dalal Street’s merchant banking era.
The September 2025 quarter turned out to be a Bollywood-level thriller. Sales jumped 31.2% QoQ, profits spiked 300% QoQ, and just when the chart looked promising — boom — the company dropped a disclosure about a ₹1,450.66 lakh expected credit loss (ECL). The audience (read: shareholders) went silent.
Debt remains under control at ₹6.82 crore, promoters still hold 42.7%, and the book value stands tall at ₹265 per share, making the stock trade at just 0.39x book — basically, the market values this NBFC’s future at the price of a south Mumbai parking spot. The company may not pay dividends, but it sure knows how to keep investors entertained.
2. Introduction
Ah, Nexome Capital Markets — the merchant banker that’s been through more plot twists than an Ekta Kapoor serial. Incorporated in 2000, it operates under SEBI’s prestigious Category-I Merchant Banker license, dabbling in corporate finance, project syndication, debt placements, and securities trading.
In its heydays, Nexome strutted through IPOs, open offers, and buybacks, managing issues for big names like Mukta Arts, MTR Foods, and Birla VXL. But in recent years, it’s been more about treasury management and securities trading — less “Wall Street Wolf,” more “Bond Bazaar Broker.”
Despite the fancy credentials, the company’s financials tell a different story. Over the past five years, sales have shrunk by 2.39% CAGR, profit growth has slowed to single digits, and ROE floats under 1%. Still, the stock has rewarded loyal bagholders with 35% returns over three years, proving once again that Indian markets often love a good comeback story — even if the comeback is only on paper.
And let’s not ignore the spicy drama of 2025: resignations, promoter reclassifications, and the mysterious ₹1,450.66 lakh ECL that suddenly appeared like a villain in the last act. If SEBI ever started a Netflix category, Nexome’s financials would be filed under “Corporate Thrillers.”
3. Business Model – WTF Do They Even Do?
So what exactly does Nexome Capital Markets do?
At its core, it’s a merchant banking and financial advisory company — essentially the corporate middleman that connects companies needing money with those having too much of it. Think of it as the Tinder of Indian finance: arranging “matches” between investors and issuers, charging a small fee, and pretending to know who’s swiping right on whom.
The business model has two main streams:
Merchant Banking & Advisory: Includes managing IPOs, rights issues, open offers, mergers, and acquisitions. In plain English — paperwork and persuasion. They’re the middlemen in India’s capital-raising ecosystem, handling compliance and convincing promoters that their company is worth twice what the market says.
Treasury & Securities Trading: A chunk of its revenue (92% in FY22) comes from trading in shares and government securities. So yes, most of its “merchant banking” income is actually from stock market operations, not deal-making.
The irony? While Nexome sells investment advice to others, its own 5-year ROE of 0.43% makes you wonder if it follows that advice itself.
And after the October–November 2025 management reshuffle and promoter group reclassification, the new leadership under Joint MD Samarth Parekh seems to be steering toward a more fintech-style model — with “expected credit losses” now entering the picture. Welcome to the NBFC drama edition.
4. Financials Overview
Let’s break down the recent Q2 FY26 (Sep 2025) performance — because the numbers have more plot depth than a suspense movie.
Source table
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
₹8.32 Cr
₹6.34 Cr
₹16.70 Cr
+31.2%
-50.1%
EBITDA
₹1.01 Cr
-₹0.35 Cr
₹1.43 Cr
N.M.
-29.4%
PAT
₹1.00 Cr
₹0.25 Cr
₹1.27 Cr
+300%
-21.3%
EPS (₹)
₹1.70
₹0.45
₹2.16
+278%
-21.3%
(Figures in ₹ crore as per consolidated quarterly results)
Commentary: YoY growth looks like a celebration — 300% jump in profit, turning last year’s dull ₹0.25 crore into ₹1 crore. But QoQ, the picture’s less rosy. Revenue nearly halved from June’s ₹16.7 crore, reminding us that in financial markets, “one good quarter” can be as fleeting as a crypto rally.
Still, the operating margin climbed to 12.14%, which is the corporate version of finally breathing after months underwater.
Now, based on the latest EPS of ₹1.70 (Quarterly), the annualised EPS stands at ₹6.80. Thus, P/E = ₹101 / ₹6.8 ≈ 14.8x — cheaper than the sector average P/E of 28.8x, though not exactly “value stock of the decade” material.
5. Valuation Discussion – Fair Value Range (Educational Purpose Only)
Let’s run through three valuation lenses — all for educational purposes only.
A) P/E Method: Annualised EPS = ₹6.8 Sector average P/E = 28.8 Conservative range = 15–25×
→ Fair value range = ₹102 to ₹170
B) EV/EBITDA Method: EV = ₹65 Cr, EBITDA (TTM) ≈ ₹5.29 Cr EV/EBITDA = 12.3× Sector median ~15×
→ Fair value (12–15× multiple) = ₹90–₹112 Cr in EV terms, translating to ₹95–₹120/share
C) DCF (Simplified View): Assume cash flows of ₹3 Cr growing 10% annually for 5 years, discount rate 12%.
→ Intrinsic value ≈ ₹110–₹130/share
✅ Fair Value Range (Educational Only): ₹95 – ₹170/share
Disclaimer: This fair value range is for educational purposes only and is not investment advice.
