Check Before You Invest : Tokyo Finance Ltd

Snapshot

Q.1 Which industry/sub-sector does Tokyo Finance Ltd belong to?

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

Q.2 Is Tokyo Finance Ltd a good quality company?

Tokyo Finance Ltd is a quality company, based on a 10-year financial track record.

Q.3 Is Tokyo Finance Ltd undervalued or overvalued?

Tokyo Finance Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Tokyo Finance Ltd a good buy now?

Tokyo Finance 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 Tokyo Finance Ltd?

Tokyo Finance Ltd Operating Income growth is 6.41% for FY-2025, which is below its 5-year CAGR of 11.12%, indicating slower growth.

Q.2 Return on Assets of Tokyo Finance Ltd?

Tokyo Finance Ltd Return on Asset is 2%, which is above its 5-year historical median of 1.1%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	27.65	17.7
PPOP%	-78.95	-73.13
RoA%	2	1.1

Q.3 Return on Equity (ROE) of Tokyo Finance Ltd?

Tokyo Finance Ltd Return on Equity is 2% for FY-2025, which is above its 5-year historical median of 1.2%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Tokyo Finance Ltd?

Tokyo Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is -78.95% for FY-2025, which is below its 5-year median(-73.13%), indicating decreasing margins.

Q.5 Net Profit Margin of Tokyo Finance Ltd?

Tokyo Finance 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 27.65% for FY-2025, which is above its 5-year median( 17.7%), indicating increasing margins.

Q.6 Total Asset growth of Tokyo Finance Ltd?

Tokyo Finance Ltd Total Asset growth is 2.51% for FY-2025, which is above its 5-year CAGR of -3.71%, indicating faster growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Tokyo Finance Ltd?

Promoters hold 65.67% of the Tokyo Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Tokyo Finance Ltd vs Industry Peers?

Tokyo Finance Ltd AUM CAGR is -3.71%, 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 Tokyo Finance Ltd vs industry peers

Tokyo Finance Ltd profit metrics are in line with the industry median level of 7.19%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	27.65	15.95
PPOP%	-78.95	4.17
RoA%	2	1.45

Q.3 Operating efficiency of Tokyo Finance Ltd vs industry peers?

Tokyo Finance Ltd ROCE (1.5) is below the industry median of (4.4); while the current ROE (1.2) 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%	27.65	15.95
PPOP%	-78.95	4.17
RoA%	2	1.45
ROCE%	2	4.4
ROE%	2	2.7

Valuation & price assessment

Q.1 Stock return of Tokyo Finance Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 13.7% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	13.7%	17.7%	18.1%	-33.5%

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	83.8	75.22	28.96
Price to Book	1.23	1.12	1.11
Price to Sales	17.18	18.21	9.10
EV to EBITDA	82.77	50.74	11.77

Q.4 Valuation ratios of Tokyo Finance Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 1.23% is higher than its historical median of 1.12%, 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?

Tokyo Finance Ltd return on invested capital (ROIC) is 2% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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