Nexome Capital (NEXOME) Q2 FY27 Profit Slumps as Core Advisory Business Contracts
The merchant banker's Q2 FY27 saw a 30% drop in operating income, with profit margins collapsing sequentially despite a surge in other income.
Nexome Capital Markets reported a 17% YoY drop in net profit for Q2 FY27, as revenue from its core investment banking operations fell sharply. A sequential margin crash highlights the firm's reliance on volatile non-core income.
For a merchant bank, revenue is a direct read on deal flow. Nexome Capital Markets entered its second quarter with a rebrand and a new Mumbai office, but its core advisory engine sputtered. Operating income fell 30% from a year ago, pulling profit down with it despite a buffer from other sources.
The numbers show a business caught between a weak quarter and a volatile past. Revenue of ₹5.8 crore was down 30.3% year-on-year, though it nearly doubled from an exceptionally low base in Q1. Net profit fell 17% YoY to ₹0.83 crore.
Revenue & profit
Revenue (₹ Cr)
Net Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 5.8YoY -30% | 3.03 | 8.32 |
| Net Profit (₹ Cr) | 0.83YoY -17% | 1.25 | 1.0 |
| Net Profit Margin | 14.3%YoY +19% | 41.0% | 12.0% |
The headline slump was driven by the investment banking division. Scanx.trade reported segment revenue fell to ₹5.14 crore from ₹7.89 crore a year earlier. This is the fee-based advisory work that defines the company, and its sharp contraction points to a lull in deal closures.
Why the profit margin collapsed
Profit fell 33.6% from the previous quarter even as revenue jumped 91.4%. The culprit was a 2,670 basis point sequential crash in net profit margin.
This stemmed from the normalization of other income, which Scanx.trade noted surged 437% in Q1 to flatter that quarter's profit. As that one-off buffer receded in Q2, the underlying pressure from lower core revenue and higher expenses—including a 93% YoY rise in depreciation—was laid bare.
A cautious outlook with institutional interest
Management has not provided formal guidance, but the research suggests a transitional phase. The company has expanded its physical presence with a Worli office, per Multibagg.ai, aiming to be closer to India's financial nerve centre.
Interestingly, institutional sentiment shows a flicker of change. MarketsMojo reported FIIs increased their stake by 3.56% over the previous quarter, though their overall holding remains small at 3.6%. The stock trades at a P/E of 8.7, a 48% discount to the industry average, reflecting the earnings volatility.
Key Points
- Core investment banking revenue fell sharply year-on-year, driving a 30% drop in total operating income.
- Net profit margin collapsed by 2,670 basis points sequentially as a large, one-off surge in other income from Q1 normalized.
- The company is expanding its physical footprint but has not issued formal business guidance, leaving the deal pipeline as the key variable.
- Foreign institutional investors have recently increased their stake, though from a near-zero base, as the stock trades at a significant discount to sector valuations.
Hexa Perspective
Nexome's quarter underscores the project-based nature of merchant banking, where revenue arrives in lumpy success fees. The margin crash is less alarming than it appears, being primarily a base effect from an unsustainable Q1.
The real question is the sustainability of the core advisory pipeline. With a clean balance sheet and a discounted valuation, the stock prices in the volatility. The trajectory now depends on deal closures materializing from its expanded presence, not on another round of non-core income.
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