Check Before You Invest : Salem Erode Investments Ltd

Snapshot

Q.1 Which industry/sub-sector does Salem Erode Investments Ltd belong to?

Salem Erode Investments Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is Salem Erode Investments Ltd a good quality company?

Salem Erode Investments Ltd is a quality company, based on a 9-year financial track record.

Q.3 Is Salem Erode Investments Ltd undervalued or overvalued?

Salem Erode Investments Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Salem Erode Investments Ltd a good buy now?

Salem Erode Investments 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 Salem Erode Investments Ltd?

Salem Erode Investments Ltd Operating Income growth is -5.87% for FY-2025, which is below its 5-year CAGR of 26.05%, indicating slower growth.

Q.2 Return on Assets of Salem Erode Investments Ltd?

Salem Erode Investments Ltd Return on Asset is -11.7%, which is below its 5-year historical median of -0.3%, indicating deteriorated earnings on assets.

	Current Level	5-year Historic Median
NPM%	-122.49	-2.41
PPOP%	202.47	-42.51
RoA%	-11.7	-0.3

Q.3 Return on Equity (ROE) of Salem Erode Investments Ltd?

Salem Erode Investments Ltd Return on Equity is -21.7% for FY-2025, which is below its 5-year historical median of -0.4%, indicating the business is making worse use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Salem Erode Investments Ltd?

Salem Erode Investments Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 202.47% for FY-2025, which is above its 5-year median(-42.51%), indicating increasing margins.

Q.5 Net Profit Margin of Salem Erode Investments Ltd?

Salem Erode Investments 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 -122.49% for FY-2025, which is below its 5-year median( -2.41%), indicating decreasing margins.

Q.6 Total Asset growth of Salem Erode Investments Ltd?

Salem Erode Investments Ltd Total Asset growth is -24.69% for FY-2025, which is below its 5-year CAGR of 8.39%, indicating slower growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Salem Erode Investments Ltd?

Promoters hold 75.00% of the Salem Erode Investments Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Salem Erode Investments Ltd vs Industry Peers?

Salem Erode Investments Ltd AUM CAGR is 8.39%, 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 Salem Erode Investments Ltd vs industry peers

Salem Erode Investments 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%	-122.49	15.95
PPOP%	202.47	4.54
RoA%	-11.7	1.45

Q.3 Operating efficiency of Salem Erode Investments Ltd vs industry peers?

Salem Erode Investments Ltd ROCE (4.1) is below the industry median of (4.4); while the current ROE (-0.4) 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%	-122.49	15.95
PPOP%	202.47	4.54
RoA%	-11.7	1.45
ROCE%	-7	4.4
ROE%	-21.7	2.7

Valuation & price assessment

Q.1 Stock return of Salem Erode Investments Ltd over the last decade?

Over the last 5 years, the stock has delivered a CAGR of 61.34% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	-	61.3%	1.3%	-16.6%

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	-	78.91	28.96
Price to Book	2.73	2.24	1.11
Price to Sales	11.81	13.22	9.10
EV to EBITDA	-24.09	25.96	11.77

Q.4 Valuation ratios of Salem Erode Investments Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.73% is higher than its historical median of 2.24%, 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?

Salem Erode Investments Ltd return on invested capital (ROIC) is -8.24% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

Check more companies

1. Tata Invest Corp

2. Manappuram Finance

3. CreditAccess Grameen

4. IIFL Finance

5. Five Star Business

6. Edelweiss Financial

7. SBFC Finance

8. Bengal & Assam

9. MAS Financial Serv

10. Fedbank Financial

Check trending companies

1. Force Motors Ltd.

2. KEI Industries Ltd.

3. Aadhar Housing Finance Ltd.

4. State Bank Of India

5. Power Finance Corporation Ltd.