Check Before You Invest : CSL Finance Ltd

BSE: 530067 NSE: CSLFINANCE ISIN: INE718F01018

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does CSL Finance Ltd belong to?

CSL Finance Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is CSL Finance Ltd a good quality company?

CSL Finance Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is CSL Finance Ltd undervalued or overvalued?

CSL Finance Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is CSL Finance Ltd a good buy now?

CSL Finance Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of CSL Finance Ltd?

CSL Finance Ltd Operating Income growth is 29.83% for FY-2025, which is above its 5-year CAGR of 28.72%, indicating faster growth.

Q.2 Return on Assets of CSL Finance Ltd?

CSL Finance Ltd Return on Asset is 6.5%, which is below its 5-year historical median of 7.2%, indicating deteriorated earnings on assets.

	Current Level	5-year Historic Median
NPM%	33.52	38.92
PPOP%	19.57	19.57
RoA%	6.5	7.2

Q.3 Return on Equity (ROE) of CSL Finance Ltd?

CSL Finance Ltd Return on Equity is 14.2% for FY-2025, which is above its 5-year historical median of 13.4%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of CSL Finance Ltd?

CSL Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 19.57% for FY-2025, which is in line with its 5-year median(19.57%), indicating stable margins.

Q.5 Net Profit Margin of CSL Finance Ltd?

CSL Finance Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 33.52% for FY-2025, which is below its 5-year median( 38.92%), indicating decreasing margins.

Q.6 Total Asset growth of CSL Finance Ltd?

CSL Finance Ltd Total Asset growth is 26.42% for FY-2025, which is below its 5-year CAGR of 30.32%, indicating slower growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of CSL Finance Ltd?

Promoters hold 47.66% of the CSL Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of CSL Finance Ltd vs Industry Peers?

CSL Finance Ltd AUM CAGR is 30.32%, compared to the 5-year industry median CAGR of 9.9%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of CSL Finance Ltd vs industry peers

CSL Finance Ltd profit metrics are above the industry median level of 7.31%, indicating stronger profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	33.52	15.95
PPOP%	19.57	4.54
RoA%	6.5	1.45

Q.3 Operating efficiency of CSL Finance Ltd vs industry peers?

CSL Finance Ltd ROCE (13.9) is above the industry median of (4.4); while the current ROE (13.4) are above than the 5-year average Industry ROE (2.7). This shows that the business is positioned in the top quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	33.52	15.95
PPOP%	19.57	4.54
RoA%	6.5	1.45
ROCE%	14.6	4.4
ROE%	14.2	2.7

Valuation & price assessment

Q.1 Stock return of CSL Finance Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 24.2% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	24.2%	24.4%	1.5%	-26.1%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	5.98	11.40	28.96
Price to Book	0.85	1.39	1.11
Price to Sales	2.15	4.91	9.10
EV to EBITDA	6.5	8.41	11.77

Q.4 Valuation ratios of CSL Finance Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 0.85% is lower than its historical median of 1.39%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

CSL Finance Ltd return on invested capital (ROIC) is 10.62% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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