SBFC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.0

📊 Core Financials Analysis

Profitability

ROE: 11.6% and ROCE: 11.6% — solid, indicating efficient capital deployment for a financial services firm.

EPS: ₹3.39 — modest, but growing steadily with PAT rising from ₹94.4 Cr to ₹101 Cr.

Quarterly Profit Variation: +28.2% YoY — strong growth momentum.

Balance Sheet & Cash Flow

Debt-to-equity: 1.65 — typical for NBFCs, but should be monitored for asset quality and provisioning.

Dividend Yield: 0.00% — no payouts yet, suggesting reinvestment into growth.

Cash flows are likely stable, supported by expanding loan book and improving asset quality.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 32.0 Slightly overvalued vs industry PE of 24.0

P/B Ratio ~3.67 Elevated, but supported by improving ROE

PEG Ratio 0.43 Undervalued relative to growth potential

Intrinsic Value ₹95–₹102 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: SBFC Finance Ltd is a retail-focused NBFC specializing in secured MSME loans, gold loans, and personal credit for underserved segments.

Strengths

Strong presence in Tier 2 and Tier 3 cities with tech-enabled underwriting.

High growth in MSME lending, a segment underserved by traditional banks.

Rising FII interest (+0.59%) reflects growing institutional confidence.

Challenges

Elevated valuation and no dividend payout.

DII holding declined, suggesting cautious domestic sentiment.

Asset quality and cost of funds need close monitoring.

According to Stocks-Buy’s SBFC forecast and Trendlyne’s SBFC dashboard, the stock is currently considered “overpriced,” with 2025 price targets ranging from ₹77.2 to ₹159.7

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📈 Technical & Sentiment Overview

RSI: 51.4 — neutral zone, no strong momentum.

MACD: -0.22 — bearish crossover, short-term caution advised.

DMA 50 & 200: Price hovering near both — trend consolidation.

Volume: In line with weekly average — steady interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹95–₹102 — near intrinsic value and technical support.

Holding Strategy

Suitable for long-term investors seeking exposure to India’s MSME credit boom.

Price targets for FY27 range from ₹160 to ₹182; long-term targets for FY30 could reach ₹250+.

Monitor loan book growth, NPA trends, and cost-to-income ratio.

SBFC is a high-growth NBFC with strong fundamentals and a scalable model, but current valuations suggest a staggered accumulation approach. If you're building a portfolio focused on financial inclusion and retail credit, this one deserves a strategic allocation.

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trendlyne.com

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stocks-buy.com

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