⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SBFC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | SBFC | Market Cap | 9,317 Cr. | Current Price | 85.0 ₹ | High / Low | 123 ₹ |
| Stock P/E | 22.0 | Book Value | 31.3 ₹ | Dividend Yield | 0.00 % | ROCE | 11.6 % |
| ROE | 11.6 % | Face Value | 10.0 ₹ | DMA 50 | 102 ₹ | DMA 200 | 103 ₹ |
| Chg in FII Hold | -0.13 % | Chg in DII Hold | 1.32 % | PAT Qtr | 118 Cr. | PAT Prev Qtr | 109 Cr. |
| RSI | 25.8 | MACD | -4.58 | Volume | 10,91,783 | Avg Vol 1Wk | 1,24,06,087 |
| Low price | 79.2 ₹ | High price | 123 ₹ | PEG Ratio | 0.29 | Debt to equity | 1.80 |
| 52w Index | 13.1 % | Qtr Profit Var | 34.0 % | EPS | 3.87 ₹ | Industry PE | 18.9 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹118 Cr, up from ₹109 Cr, showing steady growth. EPS at ₹3.87 indicates modest earnings power.
- Margins: ROE at 11.6% and ROCE at 11.6% reflect average efficiency and profitability.
- Debt Ratios: Debt-to-equity at 1.80 is high, typical for NBFCs, but requires close monitoring.
- Cash Flows: Profit growth supports operating cash flows, though leverage adds risk.
💹 Valuation Indicators
- P/E Ratio: 22.0, slightly above industry average of 18.9, suggesting moderate premium valuation.
- P/B Ratio: Current price ₹85 vs. book value ₹31.3 → ~2.7x, moderately expensive relative to assets.
- PEG Ratio: 0.29, attractive, showing strong growth potential relative to valuation.
- Intrinsic Value: Appears fairly valued with limited margin of safety at current levels.
🏢 Business Model & Competitive Advantage
- SBFC Finance operates as a non-banking financial company (NBFC), focusing on secured loans, SME financing, and retail lending.
- Competitive advantage lies in niche lending segments, growing customer base, and strong domestic institutional support.
- Business model benefits from rising credit demand, though high leverage and sector risks remain.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹80 – ₹85, near 52-week low and below DMA50.
- Long-Term Holding: Suitable for investors seeking exposure to NBFC growth, though high debt levels and modest efficiency ratios require caution. Best to accumulate gradually.
✅ Positive
- Quarterly PAT growth from ₹109 Cr to ₹118 Cr.
- DII holding increased (+1.32%), showing strong domestic institutional confidence.
- PEG ratio of 0.29 highlights growth potential.
⚠️ Limitation
- High debt-to-equity ratio (1.80) increases financial risk.
- ROE and ROCE at 11.6% are average compared to peers.
- No dividend yield, reducing investor appeal.
📉 Company Negative News
- FII holding decreased (-0.13%), showing reduced foreign investor confidence.
- Stock trading below DMA50 and DMA200 indicates weak momentum.
📈 Company Positive News
- Quarterly profit variation of 34% highlights strong growth momentum.
- DII holding increased significantly (+1.32%).
- Stock has maintained resilience above 52-week low of ₹79.2.
🏭 Industry
- NBFC sector trades at industry PE of 18.9, lower than SBFC’s 22.0, showing slight premium valuation.
- Sector growth supported by rising credit demand and SME financing opportunities.
🔎 Conclusion
- SBFC Finance shows steady profit growth and strong domestic institutional support but suffers from high leverage and average efficiency ratios.
- Valuation is slightly stretched compared to industry, though PEG ratio suggests growth potential.
- Best suited for long-term investors with entry around ₹80 – ₹85 offering a reasonable margin of safety.
I can also prepare a comparative HTML snapshot of SBFC versus other NBFCs like Muthoot Finance or Manappuram Finance to highlight valuation and profitability differences in the lending sector.