Check Before You Invest : Purple Finance Ltd

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

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

Q: Is Purple Finance Ltd a good quality company?

Purple Finance Ltd is a weak quality company, based on a inconsistent 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 Purple Finance Ltd undervalued or overvalued?

Purple 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: -, Historic Median: -. Price to Book, Current: 3.23, Historic Median: 3.05. Price to Sales, Current: 9.19, Historic Median: 16.17. EV to EBITDA, Current: 91.35, Historic Median: -25.03

Q: Is Purple Finance Ltd a good buy now?

Purple 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 Purple Finance Ltd?

Purple Finance Ltd Operating Income growth is 232.81% for FY-2025, which is above its 3-year CAGR of 153.37%, indicating faster growth.

Q: Return on Assets of Purple Finance Ltd?

Purple Finance Ltd Return on Asset is -14.7%, which is in line with its 3-year historical median of -14.7%, indicating stable earnings on assets. Efficiency & Key Metrics. NPM (%), Current: -105.63, Historic Median: -172.14. PPOP (%), Current: 53.85, Historic Median: 160. RoA (%), Current: -14.7, Historic Median: -14.7

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

Purple Finance Ltd Return on Equity is -25.2% for FY-2025, which is in line with its 3-year historical median of -25.2%, indicating the business is making similar use of its shareholders capital.

Q: Pre-provisioning operating profit margin of Purple Finance Ltd?

Purple Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 53.85% for FY-2025, which is below its 3-year median(160%), indicating decreasing margins.

Q: Net Profit Margin of Purple Finance Ltd?

Purple 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 -105.63% for FY-2025, which is above its 3-year median( -172.14%), indicating increasing margins.

Q: Does its ROIC exceed its WACC?

Purple Finance Ltd return on invested capital (ROIC) is -10.51% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

Snapshot

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

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

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

Purple Finance Ltd is a weak quality company, based on a inconsistent 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 Purple Finance Ltd undervalued or overvalued?

Purple 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	3-year Historic Median
Price to Earnings	-	-
Price to Book	3.23	3.05
Price to Sales	9.19	16.17
EV to EBITDA	91.35	-25.03

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

Purple 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 Purple Finance Ltd?

Purple Finance Ltd Operating Income growth is 232.81% for FY-2025, which is above its 3-year CAGR of 153.37%, indicating faster growth.

Q.2 Return on Assets of Purple Finance Ltd?

Purple Finance Ltd Return on Asset is -14.7%, which is in line with its 3-year historical median of -14.7%, indicating stable earnings on assets.

	Current Level	3-year Historic Median
NPM (%)	-105.63	-172.14
PPOP (%)	53.85	160
RoA (%)	-14.7	-14.7

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

Purple Finance Ltd Return on Equity is -25.2% for FY-2025, which is in line with its 3-year historical median of -25.2%, indicating the business is making similar use of its shareholders capital.

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

Purple Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 53.85% for FY-2025, which is below its 3-year median(160%), indicating decreasing margins.

Q.5 Net Profit Margin of Purple Finance Ltd?

Purple 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 -105.63% for FY-2025, which is above its 3-year median( -172.14%), indicating increasing margins.

Q.6 Does its ROIC exceed its WACC?

Purple Finance Ltd return on invested capital (ROIC) is -10.51% 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.7 Total Asset growth of Purple Finance Ltd?

Purple Finance Ltd Total Asset growth is -0.2% for FY-2025, which is below its 3-year CAGR of 103.85%, indicating slower growth.

Ownership & governance

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

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

Promoters hold 24.46% of the Purple Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

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

Purple Finance Ltd AUM CAGR is 103.85%, compared to the 3-year industry median CAGR of 9.69%, indicating faster growth and gaining its market share.

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

Purple Finance Ltd profit metrics are in line with the industry median level of 4.9%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	3-year Industry Median
NPM (%)	-105.63	13.26
PPOP (%)	53.85	-
RoA (%)	-14.7	1.45

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

Purple Finance Ltd ROCE (-31.65) is below the industry median of (4.4); while the current ROE (-25.2) are below than the 5-year average Industry ROE (2.2). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	3-year Industry Median
NPM (%)	-105.63	13.26
PPOP (%)	53.85	-
RoA (%)	-14.7	1.45
ROCE (%)	-13.5	4.4
ROE (%)	-25.2	2.2

Valuation & price assessment

Q.1 Valuation ratios of Purple Finance Ltd vs historical and industry averages?

The current Price-to-Book (P/B) ratio of 3.23 is higher than its historical median of 3.05, indicating that the stock is trading above its historical average valuation.

Q.2 Stock return of Purple Finance Ltd over the last decade?

Over the last 1 years, the stock has delivered a CAGR of 61.13% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	61.1%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	3-year Historic Median	3-year Industry Median
Price to Earnings	-	-	26.37
Price to Book	3.23	3.05	1.23
Price to Sales	9.19	16.17	9.57
EV to EBITDA	91.35	-25.03	11.03

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. Nava Ltd.

2. Honeywell Automation India Ltd.

3. Hindustan Copper Ltd.

4. SBI Life Insurance Company Ltd.

5. Canara Bank