Check Before You Invest : Paisalo Digital Ltd

BSE: 532900 NSE: PAISALO ISIN: INE420C01059

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does Paisalo Digital Ltd belong to?

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

Q.2 Is Paisalo Digital Ltd a good quality company?

Paisalo Digital Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is Paisalo Digital Ltd undervalued or overvalued?

Paisalo Digital Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Paisalo Digital Ltd a good buy now?

Paisalo Digital Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Paisalo Digital Ltd?

Paisalo Digital Ltd Operating Income growth is 21.45% for FY-2025, which is above its 5-year CAGR of 16.84%, indicating faster growth.

Q.2 Return on Assets of Paisalo Digital Ltd?

Paisalo Digital Ltd Return on Asset is 4.3%, which is above its 5-year historical median of 3.3%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	26.9	22.09
PPOP%	19.75	19.75
RoA%	4.3	3.3

Q.3 Return on Equity (ROE) of Paisalo Digital Ltd?

Paisalo Digital Ltd Return on Equity is 14.1% for FY-2025, which is above its 5-year historical median of 8.8%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Paisalo Digital Ltd?

Paisalo Digital Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 19.75% for FY-2025, which is in line with its 5-year median(19.75%), indicating stable margins.

Q.5 Net Profit Margin of Paisalo Digital Ltd?

Paisalo Digital 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 26.9% for FY-2025, which is above its 5-year median( 22.09%), indicating increasing margins.

Q.6 Total Asset growth of Paisalo Digital Ltd?

Paisalo Digital Ltd Total Asset growth is 29.67% for FY-2025, which is above its 5-year CAGR of 19.07%, indicating faster growth.

Q.7 Capital Adequacy ratio of Paisalo Digital Ltd?

Paisalo Digital Ltd Capital Adequacy ratio (CAR) is 39.2% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Q.8 Asset Quality of Paisalo Digital Ltd?

Paisalo Digital Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 0.99% for FY-2025, which is above its 5-year median 0.72%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.76% which is above its 5-year median( 0.57%), indicating deteriorating asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Paisalo Digital Ltd?

Promoters hold 41.75% of the Paisalo Digital Ltd, with 21.73% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Paisalo Digital Ltd vs Industry Peers?

Paisalo Digital Ltd AUM CAGR is 19.07%, 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 Paisalo Digital Ltd vs industry peers

Paisalo Digital 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%	26.9	15.95
PPOP%	19.75	4.54
RoA%	4.3	1.45

Q.3 Operating efficiency of Paisalo Digital Ltd vs industry peers?

Paisalo Digital Ltd ROCE (12.1) is above the industry median of (4.4); while the current ROE (8.8) 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%	26.9	15.95
PPOP%	19.75	4.54
RoA%	4.3	1.45
ROCE%	13.2	4.4
ROE%	14.1	2.7

Valuation & price assessment

Q.1 Stock return of Paisalo Digital Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 18.4% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	18.4%	9.4%	23.4%	44.2%

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	21.65	31.72	28.96
Price to Book	2.66	3.10	1.11
Price to Sales	5.31	8.09	9.10
EV to EBITDA	10.92	15.16	11.77

Q.4 Valuation ratios of Paisalo Digital Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.66% is lower than its historical median of 3.10%, 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?

Paisalo Digital Ltd return on invested capital (ROIC) is 9.52% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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