Check Before You Invest : KIFS Financial Services Ltd

Snapshot

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

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

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

KIFS Financial Services Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

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

KIFS Financial Services Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.

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

KIFS Financial Services 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 KIFS Financial Services Ltd?

KIFS Financial Services Ltd Operating Income growth is -37.56% for FY-2025, which is below its 5-year CAGR of 13.31%, indicating slower growth.

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

KIFS Financial Services Ltd Return on Asset is 2.3%, which is in line with its 5-year historical median of 2.3%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NPM%	27.7	18.73
PPOP%	10	11.11
RoA%	2.3	2.3

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

KIFS Financial Services Ltd Return on Equity is 15% for FY-2025, which is in line with its 5-year historical median of 15%, indicating the business is making similar use of its shareholders capital.

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

KIFS Financial Services Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 10% for FY-2025, which is below its 5-year median(11.11%), indicating decreasing margins.

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

KIFS 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 27.7% for FY-2025, which is above its 5-year median( 18.73%), indicating increasing margins.

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

KIFS Financial Services Ltd Total Asset growth is 30.46% for FY-2025, which is above its 5-year CAGR of 13.85%, indicating faster growth.

Ownership & governance

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

Promoters hold 74.41% of the KIFS Financial Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

KIFS Financial Services Ltd AUM CAGR is 13.85%, 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 KIFS Financial Services Ltd vs industry peers

KIFS Financial Services 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%	27.7	15.95
PPOP%	10	4.54
RoA%	2.3	1.45

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

KIFS Financial Services Ltd ROCE (10.4) is above the industry median of (4.4); while the current ROE (15) 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%	27.7	15.95
PPOP%	10	4.54
RoA%	2.3	1.45
ROCE%	9.4	4.4
ROE%	15	2.7

Valuation & price assessment

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

Over the last 9 years, the stock has delivered a CAGR of 13.1% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	13.1%	24.5%	5.5%	3.6%

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	13.61	21.43	28.96
Price to Book	2.05	3.14	1.11
Price to Sales	4.12	4.02	9.10
EV to EBITDA	10.49	10.14	11.77

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

The current Price to book ratio (P/B) 2.05% is lower than its historical median of 3.14%, 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?

KIFS Financial Services Ltd return on invested capital (ROIC) is 6.7% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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