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INVESTMENT INSIGHTS

Check Before You Invest : Rajkot Investment Trust Ltd

BSE: 539495 NSE: ISIN: INE176R01014
  |   Sector:  BFSI   |   Industry:  Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does Rajkot Investment Trust Ltd belong to?
Rajkot Investment Trust Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.
Q.2 Is Rajkot Investment Trust Ltd a good quality company?
Rajkot Investment Trust Ltd is a quality company, based on a 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 Rajkot Investment Trust Ltd undervalued or overvalued?
Rajkot Investment Trust Ltd appears Somewhat overvalued, as its key valuation ratios are higher than 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 15.1 13.90
Price to Book 0.98 0.78
Price to Sales 12.17 8.53
EV to EBITDA 65.39 77.73
Q.4 Is Rajkot Investment Trust Ltd a good buy now?
Rajkot Investment Trust 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 Rajkot Investment Trust Ltd?
Rajkot Investment Trust Ltd Operating Income growth is 109.36% for FY-2025, which is above its 5-year CAGR of 22.75%, indicating faster growth.

Q.2 Return on Assets of Rajkot Investment Trust Ltd?
Rajkot Investment Trust Ltd Return on Asset is 0.5%, which is above its 5-year historical median of 0.1%, indicating improved earnings on assets.
Current Level 5-year
Historic Median
NPM (%) 16.28 9.21
PPOP (%) 25 36.36
RoA (%) 0.5 0.1

Q.3 Return on Equity (ROE) of Rajkot Investment Trust Ltd?
Rajkot Investment Trust Ltd Return on Equity is 3.2% for FY-2025, which is above its 5-year historical median of 0.4%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Rajkot Investment Trust Ltd?
Rajkot Investment Trust Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 25% for FY-2025, which is below its 5-year median(36.36%), indicating decreasing margins.

Q.5 Net Profit Margin of Rajkot Investment Trust Ltd?
Rajkot Investment Trust 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 16.28% for FY-2025, which is above its 5-year median( 9.21%), indicating increasing margins.

Q.6 Does its ROIC exceed its WACC?
Rajkot Investment Trust Ltd return on invested capital (ROIC) is 0.55% 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 Rajkot Investment Trust Ltd?
Rajkot Investment Trust Ltd Total Asset growth is 9.31% for FY-2025, which is below its 5-year CAGR of 32.98%, indicating slower growth.

Ownership & governance

D: Promoter shareholding and pledge status of Rajkot Investment Trust Ltd?

Q.1 Promoter shareholding and pledge status of Rajkot Investment Trust Ltd?
Promoters hold 0.00% of the Rajkot Investment Trust Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Rajkot Investment Trust Ltd performance compare with that of its Peers?

Q.1 AUM Growth of Rajkot Investment Trust Ltd vs Industry Peers?
Rajkot Investment Trust Ltd AUM CAGR is 32.98%, 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 Rajkot Investment Trust Ltd vs industry peers
Rajkot Investment Trust Ltd profit metrics are in line with the industry median level of 4.76%, indicating similar profitability compared to peers.
Profit Metrics
Current Level 5-year
Industry Median
NPM (%) 16.28 12.87
PPOP (%) 25 -
RoA (%) 0.5 1.4

Q.3 Operating efficiency of Rajkot Investment Trust Ltd vs industry peers?
Rajkot Investment Trust Ltd ROCE (0.5) is below the industry median of (4.15); while the current ROE (0.4) are below than the 5-year average Industry ROE (2.3). This shows that the business is positioned in the bottom quartile of the industry.
Operating Efficiency
Current Level 5-year
Industry Median
NPM (%) 16.28 12.87
PPOP (%) 25 -
RoA (%) 0.5 1.4
ROCE (%) 0.7 4.15
ROE (%) 3.2 2.3

Valuation & price assessment

Q.1 Stock return of Rajkot Investment Trust Ltd over the last decade?
Over the last 5 years, the stock has delivered a CAGR of 30.42% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - 30.4% 21.6% -8.1%
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 15.1 13.90 29.12
Price to Book 0.98 0.78 1.11
Price to Sales 12.17 8.53 9.10
EV to EBITDA 65.39 77.73 11.77
Q.3 Valuation ratios of Rajkot Investment Trust Ltd vs historical and industry averages?
The current Price-to-Book (P/B) ratio of 0.98 is higher than its historical median of 0.78, indicating that the stock is trading above its historical average valuation.

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