SBFC - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.0

📊 Fundamental & Valuation Analysis

SBFC Finance Ltd is a fast-growing NBFC focused on MSME lending and gold-backed loans. Its financials reflect strong growth, improving margins, and disciplined asset quality—making it a promising long-term investment.

🔍 Key Metrics Breakdown

Metric Value Interpretation

Market Cap ₹11,631 Cr Mid-cap, high-growth

Current Price ₹107 ~11% below 52-week high

Book Value ₹29.4 P/B ~3.64 → Slightly expensive

Stock P/E 33.6 Above industry PE (25.2), but justified by growth

ROE / ROCE 11.6% / 11.6% Solid and improving returns

Dividend Yield 0.00% No payout, reinvesting profits

Debt-to-Equity 1.65 High, but typical for NBFCs

PEG Ratio 0.45 Attractive growth valuation

PAT Qtr ₹93.9 Cr Up from ₹88.3 Cr → consistent growth

EPS ₹3.18 Improving earnings base

📈 AUM CAGR (FY19–FY25): 46% 📊 Profit CAGR (5Y): 58% 📉 Gross NPA: ~2.7% → well-managed asset quality

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📉 Technical & Trend Analysis

RSI (40.3): Mildly oversold, potential bounce

MACD (0.48): Neutral to slightly bullish

DMA 50 & 200: Price near 50 DMA, above 200 DMA → long-term trend intact

Price Trend: Up ~67.8% YoY, outperforming sector

✅ Long-Term Investment Outlook

SBFC is a high-quality compounder in the NBFC space with

Strong focus on underserved MSME segment

Consistent profit growth and improving margins

Low NPAs and disciplined underwriting

Backing from marquee investors and rising FII interest

Analysts forecast price targets of ₹125–₹130 in 12 months, with long-term projections reaching ₹170–₹190 by 2027

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🎯 Ideal Entry Price Zone

Based on valuation and technical support

Buy Zone: ₹95–₹102

Near breakout retest and 200 DMA

Offers margin of safety for long-term accumulation

🧭 Exit Strategy (If You Already Hold)

If you're holding SBFC

🔄 Short-Term Traders

Exit near ₹120–₹125, which is a resistance zone

Use trailing stop-loss below ₹100

🕰️ Long-Term Investors

Hold for 3–5 years to benefit from compounding growth

Reassess only if ROE drops below 10% or NPAs rise above 4%

Consider partial profit booking above ₹140–₹150

⏳ Suggested Holding Period

Minimum 2–3 years for capital appreciation

5+ years for full value realization and potential listing of subsidiaries

Would you like a peer comparison with other MSME-focused NBFCs like Home First Finance or MAS Financial?

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trendlyne.com

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stockpricearchive.com

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dailybulls.in

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