Check Before You Invest : Frontier Capital Ltd

Snapshot

Q.1 Which industry/sub-sector does Frontier Capital Ltd belong to?

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

Q.2 Is Frontier Capital Ltd a good quality company?

Frontier Capital Ltd is a quality company, based on a 9-year financial track record.

Q.3 Is Frontier Capital Ltd undervalued or overvalued?

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

Q.4 Is Frontier Capital Ltd a good buy now?

Frontier Capital 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 Frontier Capital Ltd?

Frontier Capital Ltd Operating Income growth is 92.86% for FY-2025, which is above its 5-year CAGR of 19.67%, indicating faster growth.

Q.2 Return on Assets of Frontier Capital Ltd?

Frontier Capital Ltd Return on Asset is 9.6%, which is above its 5-year historical median of 9.1%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	54.84	54.84
PPOP%	172.73	-70.24
RoA%	9.6	9.1

Q.3 Return on Equity (ROE) of Frontier Capital Ltd?

Frontier Capital Ltd Return on Equity is 11.4% for FY-2025, which is in line with its 5-year historical median of 11.4%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Frontier Capital Ltd?

Frontier Capital Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 172.73% for FY-2025, which is above its 5-year median(-70.24%), indicating increasing margins.

Q.5 Net Profit Margin of Frontier Capital Ltd?

Frontier Capital 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 54.84% for FY-2025, which is in line with its 5-year median( 54.84%), indicating stable margins.

Q.6 Total Asset growth of Frontier Capital Ltd?

Frontier Capital Ltd Total Asset growth is -1.61% for FY-2025, which is below its 5-year CAGR of 2.31%, indicating slower growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Frontier Capital Ltd?

Promoters hold 56.07% of the Frontier Capital Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Frontier Capital Ltd vs Industry Peers?

Frontier Capital Ltd AUM CAGR is 2.31%, 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 Frontier Capital Ltd vs industry peers

Frontier Capital Ltd profit metrics are above the industry median level of 7.19%, indicating stronger profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	54.84	15.95
PPOP%	172.73	4.17
RoA%	9.6	1.45

Q.3 Operating efficiency of Frontier Capital Ltd vs industry peers?

Frontier Capital Ltd ROCE (10.1) is above the industry median of (4.4); while the current ROE (11.4) 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%	54.84	15.95
PPOP%	172.73	4.17
RoA%	9.6	1.45
ROCE%	11.3	4.4
ROE%	11.4	2.7

Valuation & price assessment

Q.1 Stock return of Frontier Capital Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 5.5% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	5.5%	15.7%	39%	-60.7%

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	54.92	45.21	28.96
Price to Book	4.47	4.47	1.11
Price to Sales	36.88	36.43	9.10
EV to EBITDA	48.89	34.25	11.77

Q.4 Valuation ratios of Frontier Capital Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 4.47% is similar than its historical median of 4.47%, indicating that at the current price the stock is fairly valued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Frontier Capital Ltd return on invested capital (ROIC) is 11.09% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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