Check Before You Invest : SG Finserve Ltd

BSE: 539199 NSE: SGFIN ISIN: INE618R01015

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does SG Finserve Ltd belong to?

SG Finserve Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is SG Finserve Ltd a good quality company?

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

Q.3 Is SG Finserve Ltd undervalued or overvalued?

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

Q.4 Is SG Finserve Ltd a good buy now?

SG Finserve 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 SG Finserve Ltd?

SG Finserve Ltd Operating Income growth is -9.85% for FY-2025, which is below its 5-year CAGR of 409.13%, indicating slower growth.

Q.2 Return on Assets of SG Finserve Ltd?

SG Finserve Ltd Return on Asset is 3.9%, which is below its 5-year historical median of 5.5%, indicating deteriorated earnings on assets.

	Current Level	5-year Historic Median
NPM%	47.35	47.35
PPOP%	10.19	10.19
RoA%	3.9	5.5

Q.3 Return on Equity (ROE) of SG Finserve Ltd?

SG Finserve Ltd Return on Equity is 9.5% for FY-2025, which is in line with its 5-year historical median of 9.5%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of SG Finserve Ltd?

SG Finserve Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 10.19% for FY-2025, which is in line with its 5-year median(10.19%), indicating stable margins.

Q.5 Net Profit Margin of SG Finserve Ltd?

SG Finserve 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 47.35% for FY-2025, which is in line with its 5-year median( 47.35%), indicating stable margins.

Q.6 Total Asset growth of SG Finserve Ltd?

SG Finserve Ltd Total Asset growth is 35.77% for FY-2025, which is below its 5-year CAGR of 213.28%, indicating slower growth.

Q.7 Capital Adequacy ratio of SG Finserve Ltd?

SG Finserve Ltd Capital Adequacy ratio (CAR) is 43.5% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Ownership & governance

Q.1 Promoter shareholding and pledge status of SG Finserve Ltd?

Promoters hold 52.92% of the SG Finserve Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of SG Finserve Ltd vs Industry Peers?

SG Finserve Ltd AUM CAGR is 213.28%, 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 SG Finserve Ltd vs industry peers

SG Finserve 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%	47.35	15.95
PPOP%	10.19	4.54
RoA%	3.9	1.45

Q.3 Operating efficiency of SG Finserve Ltd vs industry peers?

SG Finserve Ltd ROCE (12) is above the industry median of (4.4); while the current ROE (9.5) 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%	47.35	15.95
PPOP%	10.19	4.54
RoA%	3.9	1.45
ROCE%	6.8	4.4
ROE%	9.5	2.7

Valuation & price assessment

Q.1 Stock return of SG Finserve Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 45.9% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	45.9%	200.9%	2.2%	42.6%

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	29.26	29.10	28.96
Price to Book	2.51	2.74	1.11
Price to Sales	11.2	23.09	9.10
EV to EBITDA	20.17	20.27	11.77

Q.4 Valuation ratios of SG Finserve Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 2.51% is lower than its historical median of 2.74%, 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?

SG Finserve Ltd return on invested capital (ROIC) is 4.97% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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