Religare Enterprises Limited Stock Analysis

Insurance segment (Care Health) remains the revenue anchor with gross written premium of Rs 1,743.60 crores in Q3 FY2026 and Rs 5,120.34 crores for nine months, providing stable top-line / Broking operations showed resilience with consolidated revenue of Rs 80.80 crores in Q3 FY2026 (up from Rs 74.95 crores in Q2) and nine-month revenue of Rs 227.55 crores / RBI withdrew Corrective Action Plan restrictions on subsidiary Religare Finvest Limited in July 2025, allowing credit portfolio expansion and dividend payments after years of restrictions / Successfully raised Rs 375 crores through 25% upfront warrant payment in September 2025 and additional Rs 35 crores in Q3 from warrant conversions (19.86 lakh shares allotted), improving liquidity / All 18 lenders removed fraud classification of Religare Finvest from RBI's Central Fraud Registry, clearing a major reputational overhang

Massive net loss of Rs 76.54 crores in Q3 FY2026 consolidated (vs Rs 45.93 crores profit in Q2) driven by Rs 848.95 crores standalone employee expense spike due to Labour Code impact of Rs 1,952.16 crores consolidated (gratuity Rs 1,546.88 lakhs + leave Rs 405.28 lakhs) / Nine-month consolidated revenue declined to Rs 6,033.10 crores from Rs 5,355.65 crores prior year but profitability crashed with net loss of Rs 22.49 crores vs profit of Rs 32.03 crores, indicating severe margin pressure / Ongoing income tax litigation demands totaling Rs 41,194 lakhs across parent (Rs 10,853 lakhs for AY 2017-18) and Religare Finvest (Rs 30,341 lakhs for multiple years) with appeals pending before ITAT / Unredeemed preference shares worth Rs 8,403.03 lakhs (265 lakh shares to RHC Finance and Oscar Investments) remain disputed with NCLT proceedings ongoing and brand trademark litigation threatening Rs 323 crores payment claim / Insurance subsidiary CHIL faces IRDAI penalty (Rs 100 lakhs paid) and regulatory mandated ESOP buyback order (75.69 lakh shares at Rs 45.32) with matter sub-judice, plus new premium recognition norms reduced operating profit by Rs 354.56 crores in nine months FY2026 / Governance review commissioned for parent and subsidiaries RFL/RHDFCL still in progress to identify potential misconduct by current/ex-employees, creating uncertainty around potential financial impact adjustments

Consolidated total revenue increased to Rs. 2,06,793.41 lakh in Q3 FY26 from Rs. 1,67,024.07 lakh in Q3 FY25 (+~23.8%), and 9M revenue rose to Rs. 6,03,309.79 lakh from Rs. 5,35,564.75 lakh (+~12.7%). / Insurance scale remains strong with Q3 segment revenue of Rs. 1,93,192.24 lakh versus Rs. 1,56,182.24 lakh YoY, and 9M insurance revenue of Rs. 5,65,550.70 lakh versus Rs. 4,96,695.69 lakh. / Capital base strengthened through equity issuance: 19,85,816 warrants converted at Rs. 235/share plus ESOP allotments, taking paid-up capital to Rs. 33,274.05 lakh (33,27,40,479 shares). / Preferential issue has liquidity support, with Rs. 37,500 lakh upfront received in Sep-2025 and additional Rs. 3,500 lakh received in Q3 for further warrant conversion. / RFL regulatory position improved materially as RBI withdrew Corrective Action Plan restrictions on July 23, 2025, and all 18 lenders removed fraud classification from RBI’s Central Fraud Registry.

Earnings volatility is high: consolidated Q3 FY26 net loss was Rs. 7,654.02 lakh versus Q2 FY26 profit of Rs. 4,592.88 lakh and Q3 FY25 loss of Rs. 6,321.89 lakh. / Insurance profitability deteriorated, with segment result at Rs. -11,116.52 lakh in Q3 FY26 and Rs. -8,809.33 lakh in 9M FY26 despite strong revenue growth. / Accounting/regulatory change created a major drag: CHIL’s 1/n premium recognition reduced 9M operating profit by Rs. 35,456 lakh, cutting reported premium and earnings momentum. / Material litigations remain, including tax demands (REL AY2017-18 demand reduced to Rs. 10,853 lakh; RFL AY2012-13/2016-17/2017-18 aggregate demand Rs. 30,341 lakh) treated as contingent liabilities without provision. / Governance and structural overhangs persist: board-commissioned governance review is still in progress, RCML remains unconsolidated with unavailable financials since FY17 and contingent liability of Rs. 4,077.50 lakh, and the company is still barred from declaring dividends (RBI letter, Dec-2019).