Check Before You Invest : Lead Financial Services Ltd

Snapshot

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

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

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

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

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

Lead Financial Services Ltd appears Fair, as its key valuation ratios are in line with their past averages.

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

Lead 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 Lead Financial Services Ltd?

Lead Financial Services Ltd Operating Income growth is 16.67% for FY-2025, which is below its 5-year CAGR of 60.04%, indicating slower growth.

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

Lead Financial Services Ltd Return on Asset is 1.6%, which is above its 5-year historical median of 1.4%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	25.89	25.89
PPOP%	-17.65	-17.65
RoA%	1.6	1.4

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

Lead Financial Services Ltd Return on Equity is 2.7% for FY-2025, which is above its 5-year historical median of 2.6%, indicating the business is making better use of its shareholders capital.

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

Lead Financial Services Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is -17.65% for FY-2025, which is in line with its 5-year median(-17.65%), indicating stable margins.

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

Lead 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 25.89% for FY-2025, which is in line with its 5-year median( 25.89%), indicating stable margins.

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

Lead Financial Services Ltd Total Asset growth is 1.93% for FY-2025, which is above its 5-year CAGR of 1.24%, indicating faster growth.

Ownership & governance

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

Promoters hold 28.23% of the Lead Financial Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Lead Financial Services Ltd AUM CAGR is 1.24%, 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 Lead Financial Services Ltd vs industry peers

Lead 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%	25.89	15.95
PPOP%	-17.65	4.54
RoA%	1.6	1.45

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

Lead Financial Services Ltd ROCE (3.3) is below the industry median of (4.4); while the current ROE (2.6) are below than the 5-year average Industry ROE (2.7). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	25.89	15.95
PPOP%	-17.65	4.54
RoA%	1.6	1.45
ROCE%	4.6	4.4
ROE%	2.7	2.7

Valuation & price assessment

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

Over the last 9 years, the stock has delivered a CAGR of 10.5% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	10.5%	28.2%	-8.6%	-47.1%

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	33.34	32.61	28.96
Price to Book	0.77	0.95	1.11
Price to Sales	9.43	21.38	9.10
EV to EBITDA	19.04	21.22	11.77

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

The current Price to book ratio (P/B) 0.77% is lower than its historical median of 0.95%, 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?

Lead Financial Services Ltd return on invested capital (ROIC) is 2.72% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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