Check Before You Invest : Emerald Finance Ltd

Q: Which industry/sub-sector does Emerald Finance Ltd belong to?

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

Q: Is Emerald Finance Ltd a good quality company?

Emerald Finance Ltd is a average quality company, based on a somewhat consistent multi-year financial track record. This assessment is based on the bank’s performance on Total Income growth, Pre-Provision Operating Profit, RoA, RoE, CAR, and Asset Quality, along with how these metrics compare with its long-term averages.

Q: Is Emerald Finance Ltd undervalued or overvalued?

Emerald Finance Ltd appears Fair, as its key valuation ratios are in line with their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 20.07, Historic Median: 37.38. Price to Book, Current: 2.62, Historic Median: 2.26. Price to Sales, Current: 11.26, Historic Median: 15.85. EV to EBITDA, Current: 13.82, Historic Median: 23.57

Q: Is Emerald Finance Ltd a good buy now?

Emerald 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

Q: Total Income growth of Emerald Finance Ltd?

Emerald Finance Ltd Operating Income growth is 81.61% for FY-2025, which is above its 5-year CAGR of 49.55%, indicating faster growth.

Q: Return on Assets of Emerald Finance Ltd?

Emerald Finance Ltd Return on Asset is 8.8%, which is above its 5-year historical median of 6.3%, indicating improved earnings on assets. Efficiency & Key Metrics. NPM (%), Current: 48.01, Historic Median: 39.69. PPOP (%), Current: -, Historic Median: -. RoA (%), Current: 8.8, Historic Median: 6.3

Q: Return on Equity (ROE) of Emerald Finance Ltd?

Emerald Finance Ltd Return on Equity is 11.3% for FY-2025, which is above its 5-year historical median of 7.9%, indicating the business is making better use of its shareholders capital.

Q: Net Profit Margin of Emerald Finance Ltd?

Emerald 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 48.01% for FY-2025, which is above its 5-year median( 39.69%), indicating increasing margins.

Q: Does its ROIC exceed its WACC?

Emerald Finance Ltd return on invested capital (ROIC) is 11.11% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

Q: Total Asset growth of Emerald Finance Ltd?

Emerald Finance Ltd Total Asset growth is 72.22% for FY-2025, which is above its 5-year CAGR of 50.61%, indicating faster growth.

Snapshot

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

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

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

Emerald Finance Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on the bank’s performance on Total Income growth, Pre-Provision Operating Profit, RoA, RoE, CAR, and Asset Quality, along with how these metrics compare with its long-term averages.

Q.3 Is Emerald Finance Ltd undervalued or overvalued?

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

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	20.07	37.38
Price to Book	2.62	2.26
Price to Sales	11.26	15.85
EV to EBITDA	13.82	23.57

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

Emerald 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

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Total Income growth, NPM, PPOP, RoA and RoE compared to its last 5-year median.
How efficiently has it grown and managed operations?
By checking its Total Asset growth.
How strong is its Capital position and Asset Quality?
By checking its Capital Adequacy Ratio (CAR), GNPA and NNPA.

A: What are the trends in income and profitability?

Q.1 Total Income growth of Emerald Finance Ltd?

Emerald Finance Ltd Operating Income growth is 81.61% for FY-2025, which is above its 5-year CAGR of 49.55%, indicating faster growth.

Q.2 Return on Assets of Emerald Finance Ltd?

Emerald Finance Ltd Return on Asset is 8.8%, which is above its 5-year historical median of 6.3%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM (%)	48.01	39.69
PPOP (%)	-	-
RoA (%)	8.8	6.3

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

Emerald Finance Ltd Return on Equity is 11.3% for FY-2025, which is above its 5-year historical median of 7.9%, indicating the business is making better use of its shareholders capital.

Q.4 Net Profit Margin of Emerald Finance Ltd?

Emerald 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 48.01% for FY-2025, which is above its 5-year median( 39.69%), indicating increasing margins.

Q.5 Does its ROIC exceed its WACC?

Emerald Finance Ltd return on invested capital (ROIC) is 11.11% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

B: Does the bank grow efficiently and manage its operating costs?

Q.6 Total Asset growth of Emerald Finance Ltd?

Emerald Finance Ltd Total Asset growth is 72.22% for FY-2025, which is above its 5-year CAGR of 50.61%, indicating faster growth.

Ownership & governance

D: Promoter shareholding and pledge status of Emerald Finance Ltd?

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

Promoters hold 59.70% of the Emerald Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Emerald Finance Ltd performance compare with that of its Peers?

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

Emerald Finance Ltd AUM CAGR is 50.61%, compared to the 5-year industry median CAGR of 9.71%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Emerald Finance Ltd vs industry peers

Emerald Finance Ltd profit metrics are above the industry median level of 4.76%, indicating stronger profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM (%)	48.01	12.87
PPOP (%)	-	-
RoA (%)	8.8	1.4

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

Emerald Finance Ltd ROCE (11) is above the industry median of (4.15); while the current ROE (7.9) are above than the 5-year average Industry ROE (2.3). This shows that the business is positioned in the top quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM (%)	48.01	12.87
PPOP (%)	-	-
RoA (%)	8.8	1.4
ROCE (%)	15.4	4.15
ROE (%)	11.3	2.3

Valuation & price assessment

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

Over the last 9 years, the stock has delivered a CAGR of 17.6% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	17.6%	36.5%	39%	-32.9%

Q.2 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	20.07	37.38	29.12
Price to Book	2.62	2.26	1.11
Price to Sales	11.26	15.85	9.10
EV to EBITDA	13.82	23.57	11.77

Q.3 Valuation ratios of Emerald Finance Ltd vs historical and industry averages?

The current Price-to-Book (P/B) ratio of 2.62 is higher than its historical median of 2.26, indicating that the stock is trading above its historical average valuation.

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