Check Before You Invest : Edelweiss Financial Services Ltd

BSE: 532922 NSE: EDELWEISS ISIN: INE532F01054

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does Edelweiss Financial Services Ltd belong to?

Edelweiss Financial Services Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is Edelweiss Financial Services Ltd a good quality company?

Edelweiss Financial Services Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is Edelweiss Financial Services Ltd undervalued or overvalued?

Edelweiss Financial Services Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Edelweiss Financial Services Ltd a good buy now?

Edelweiss Financial Services Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Edelweiss Financial Services Ltd?

Edelweiss Financial Services Ltd Operating Income growth is -4.4% for FY-2025, which is below its 5-year CAGR of -1.63%, indicating slower growth.

Q.2 Return on Assets of Edelweiss Financial Services Ltd?

Edelweiss Financial Services Ltd Return on Asset is 1.3%, which is above its 5-year historical median of 1%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	5.9	4.78
PPOP%	26.68	26.68
RoA%	1.3	1

Q.3 Return on Equity (ROE) of Edelweiss Financial Services Ltd?

Edelweiss Financial Services Ltd Return on Equity is 12.6% for FY-2025, which is above its 5-year historical median of 6.2%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Edelweiss Financial Services Ltd?

Edelweiss Financial Services Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 26.68% for FY-2025, which is in line with its 5-year median(26.68%), indicating stable margins.

Q.5 Net Profit Margin of Edelweiss Financial Services Ltd?

Edelweiss Financial Services 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 5.9% for FY-2025, which is above its 5-year median( 4.78%), indicating increasing margins.

Q.6 Total Asset growth of Edelweiss Financial Services Ltd?

Edelweiss Financial Services Ltd Total Asset growth is -3.7% for FY-2025, which is above its 5-year CAGR of -5.66%, indicating faster growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Edelweiss Financial Services Ltd?

Promoters hold 32.26% of the Edelweiss Financial Services Ltd, with 8.90% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Edelweiss Financial Services Ltd vs Industry Peers?

Edelweiss Financial Services Ltd AUM CAGR is -5.66%, compared to the 5-year industry median CAGR of 9.9%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Edelweiss Financial Services Ltd vs industry peers

Edelweiss Financial Services Ltd profit metrics are in line with the industry median level of 7.31%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	5.9	15.95
PPOP%	26.68	4.54
RoA%	1.3	1.45

Q.3 Operating efficiency of Edelweiss Financial Services Ltd vs industry peers?

Edelweiss Financial Services Ltd ROCE (10.3) is above the industry median of (4.4); while the current ROE (6.2) 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%	5.9	15.95
PPOP%	26.68	4.54
RoA%	1.3	1.45
ROCE%	14.3	4.4
ROE%	12.6	2.7

Valuation & price assessment

Q.1 Stock return of Edelweiss Financial Services Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 7.1% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	7.1%	14.4%	19.8%	42.8%

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	19.77	19.82	28.96
Price to Book	2.51	1.61	1.11
Price to Sales	1.43	1.14	9.10
EV to EBITDA	2.96	3.69	11.77

Q.4 Valuation ratios of Edelweiss Financial Services Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.51% is higher than its historical median of 1.61%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Edelweiss Financial Services Ltd return on invested capital (ROIC) is 9.23% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 13.5%, indicating value erosion.

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