At a Glance
Summit Securities, the RPG Group’s silent NBFC, reported Q1 FY26 revenue of ₹28 Cr and a profit of ₹20 Cr, flexing an absurd 97% operating margin (because why not when you only manage investments?). Despite a book value of ₹9,050/share, the stock trades at ₹2,051 – a 0.23x P/B ratio. Investors either don’t get the math, or they know something sinister. The company continues to hoard investments, pay zero dividends, and deliver returns slower than Indian bureaucracy.
1. Introduction
Summit is that one rich uncle who owns half the neighborhood but refuses to spend a dime. Its primary business? Holding investments in listed and unlisted companies – basically a holding company disguised as an NBFC. While peers like Tata Investment Corp trade at nosebleed P/Es, Summit is just chilling at a P/E of 26, P/B of 0.23, and ROE under 1%. The irony? Its asset base is massive, but its earnings power is a lazy Sunday nap.
2. Business Model (WTF Do They Even Do?)
Summit’s business is investments, period. No loans, no deposits, no trading desks – just a fat portfolio of stakes in various companies (mostly group entities).
- Revenue Source: Dividend income and occasional sale of investments.
- Costs: Negligible – hence 90%+ OPM.
- Growth Driver: Market value appreciation of holdings.
- Risk: Holding structure discounts and lack of active monetization.
3. Financials Overview
- Revenue Q1 FY26: ₹28 Cr (+33% YoY)
- PAT Q1 FY26: ₹20 Cr (+112% YoY)
- EPS: ₹18.5
- FY25 Revenue: ₹119 Cr (+17%)
- FY25 PAT: ₹69 Cr (-9%)
Margins remain stellar, but absolute profits are too small to move the needle.
4. Valuation
This is where it gets spicy:
- P/E Method: EPS ₹78.7 × 15 = ₹1,180
- P/B Method: Book value ₹9,050 × 0.5 = ₹4,500
- SOTP (Portfolio Value): Likely far above CMP
Fair Value Range: ₹1,200 – ₹4,000
CMP ₹2,051 = undervalued if value unlock ever happens (big IF).
5. What’s Cooking – News, Triggers, Drama
- No Dividends: Retains all profits.
- RPG Group Holding Play: Possible restructuring in future?
- Regulatory Risks: NBFC compliance is ongoing.
- Hidden Trigger: Asset monetization or group simplification.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 5,640 | 10,078 | 11,377 |
| Liabilities | 534 | 1,051 | 1,510 |
| Net Worth | 5,095 | 9,015 | 9,855 |
| Borrowings | 0 | 0 | 0 |
Auditor’s Remark: No debt, massive reserves – looks like a treasure chest locked with 10 keys.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 38 | 36 | 74 |
| Investing | -43 | -57 | -77 |
| Financing | 0 | 0 | 0 |
Commentary: Positive ops cash, but investment outflows eat up free cash. Zero dividends mean cash hoarding continues.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 1% | 1% | 1% |
| ROCE | 1% | 1% | 1% |
| P/E | 33 | 28 | 26 |
| PAT Margin | 93% | 96% | 83% |
| D/E | 0 | 0 | 0 |
Verdict: Margins look godly, returns look ghostly.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 51 | 102 | 119 |
| EBITDA | 47 | 98 | 114 |
| PAT | 37 | 76 | 69 |
Commentary: Steady revenue, stagnant profit – value unlocking is the missing ingredient.
10. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Tata Inv Corp | 304 | 312 | 109 |
| JSW Holdings | 248 | 196 | 120 |
| Mah Scooters | 205 | 194 | 90 |
| Summit Securities | 145 | 86 | 26 |
Commentary: Summit trades cheap vs peers – but cheap for a reason.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 74.6% (locked and loaded)
- FIIs: 0.07%
- DIIs: 0.3%
- Public: 25%
Low float = low action.
12. EduInvesting Verdict™
Summit Securities is the epitome of a holding company discount. With assets worth several times the market cap, the stock should trade higher – but management’s lack of capital allocation initiatives keeps it in “value trap” territory.
SWOT Snapshot:
- Strengths: Huge reserves, zero debt, strong margins.
- Weaknesses: Low ROE, no dividends, passive management.
- Opportunities: Possible restructuring, mergers, or asset monetization.
- Threats: Permanent undervaluation if no corporate action.
For patient investors, Summit is like a locked vault – the treasure is real, but the key may never be found.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Summit Securities, RPG Group Holding Company, NBFC Analysis, Q1 FY26 Results
