Check Before You Invest : SBFC Finance Ltd

BSE: 543959 NSE: SBFC ISIN: INE423Y01016

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

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

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

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

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

Q.3 Is SBFC Finance Ltd undervalued or overvalued?

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

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

SBFC Finance Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of SBFC Finance Ltd?

SBFC Finance Ltd Operating Income growth is 28.14% for FY-2025, which is above its 5-year CAGR of 24.03%, indicating faster growth.

Q.2 Return on Assets of SBFC Finance Ltd?

SBFC Finance Ltd Return on Asset is 4.3%, which is above its 5-year historical median of 2.9%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	26.45	20.44
PPOP%	46.59	54.85
RoA%	4.3	2.9

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

SBFC Finance Ltd Return on Equity is 11.7% for FY-2025, which is above its 5-year historical median of 10.1%, indicating the business is making better use of its shareholders capital.

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

SBFC Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 46.59% for FY-2025, which is below its 5-year median(54.85%), indicating decreasing margins.

Q.5 Net Profit Margin of SBFC Finance Ltd?

SBFC 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 26.45% for FY-2025, which is above its 5-year median( 20.44%), indicating increasing margins.

Q.6 Total Asset growth of SBFC Finance Ltd?

SBFC Finance Ltd Total Asset growth is 19.95% for FY-2025, which is above its 5-year CAGR of 15.61%, indicating faster growth.

Q.7 Capital Adequacy ratio of SBFC Finance Ltd?

SBFC Finance Ltd Capital Adequacy ratio (CAR) is 36.1% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Ownership & governance

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

Promoters hold 52.35% of the SBFC Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

SBFC Finance Ltd AUM CAGR is 15.61%, compared to the 5-year industry median CAGR of 9.9%, indicating faster growth and gaining its market share.

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

SBFC Finance Ltd profit metrics are above the industry median level of 7.31%, indicating stronger profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	26.45	15.95
PPOP%	46.59	4.54
RoA%	4.3	1.45

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

SBFC Finance Ltd ROCE (9.9) is above the industry median of (4.4); while the current ROE (10.1) 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%	26.45	15.95
PPOP%	46.59	4.54
RoA%	4.3	1.45
ROCE%	11.6	4.4
ROE%	11.7	2.7

Valuation & price assessment

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

Over the last 1 years, the stock has delivered a CAGR of -7.76% based on the current price.

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

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	-7.8%

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	22.65	33.87	28.96
Price to Book	2.74	3.29	1.11
Price to Sales	6.1	8.80	9.10
EV to EBITDA	13.7	17.49	11.77

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

The current Price to book ratio (P/B) 2.74% is lower than its historical median of 3.29%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

SBFC Finance Ltd return on invested capital (ROIC) is 8.4% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 13.5%, indicating value erosion.

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