Arihant Capital Markets Limited

Financial Services — Capital Markets · NSE

₹97.40−₹1.91 (−1.92%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Arihant Capital Markets Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Arihant Capital Markets Limited, together with its subsidiaries, engages in the broking and related businesses in India. The company offers stock, commodities, and insurance broking services, as well as portfolio management, financial, real estate, and other related services.

IndustryCapital Markets

SectorFinancial Services

Employees456

Annual revenue₹124 Cr

How does it make money?

Turns over ₹124 Cr a year. Of every ₹100 of sales, about ₹25 reaches shareholders as profit, with ₹53 left at the operating level before interest, tax and depreciation. Each of its 456 employees supports ₹27.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin53.0%

Net margin25.3%

Revenue / employee₹27.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC LIFE INS CO LTD, SBI LIFE INSURANCE CO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC LIFE INS CO LTDP/E 58.4x · ROE 11.3%

SBI LIFE INSURANCE CO LTDP/E 63.9x · ROE 13.7%

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

ROCE14.4%

ROE7.1%

Peer median ROE13.7%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +57% while net margin moved -31% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+57%

Margin effect-31%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.24 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

65/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

47/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

26.5x

3Y Median

18.7x

40 monthly readings · mean 19.0x · range 9.5x–33.9x

Sector Median

58.4x

median of 3 sector peers

⚠️Current valuation is approximately 42% above its 3y median of 18.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 55% below the peer median of 58.4x.

vs. its own history

Expensive

18.7x median over 40 months · +42%

vs. sector peers

Cheap

58.4x median of 3 peers · -55%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.5x

P/B

2.20x

EV/EBITDA

19.4x

PEG

10.12

Dividend Yield

0.51%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 11.3% to 7.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.6% to 14.4% — often a sign of competition or overexpansion.
Valuation above its historical average
At 26.5x the stock trades 42% above its own median of 18.7x.

Red Flags

1 item require attention · 1 watch

🟡Interest coverage is deterioratingFinancial
Cover has fallen from 4.9x to 2.9x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 55% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 42% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 11.3% to 7.1%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 16.1% CAGR
Latest reported year was 50.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 51%✓ 53.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 7.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 3x✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 18.7x✗ 26.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹1,068 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.5x

Fair

Fairly valued against the generic band

P/B Ratio

2.20x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.68

Profitable

Profitable on a per-share basis

ROE

7.1%

Weak

Weak capital efficiency

ROCE

14.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.55x

Low

Conservative leverage

Revenue Growth (YoY)

50.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

69.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.51%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹126 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹97.4

Operating Margin

38.6%

Good

Healthy core-business profitability

Net Margin

19.4%

Good

Strong bottom-line conversion

Current Ratio

1.56

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.24

Defensive

Steadier than the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

92.7 / 83.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

58.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹79 Cr	₹122 Cr	₹139 Cr	₹124 Cr	+16.1%
EBITDA	₹43 Cr	₹61 Cr	₹74 Cr	₹66 Cr	+15.2%
EBITDA Margin	54.3%	50.3%	53.2%	53.0%	—
PAT (Net Profit)	₹29 Cr	₹71 Cr	₹59 Cr	₹31 Cr	+2.6%
EPS	₹2.8	₹6.77	₹5.38	₹2.87	+0.8%
ROE	11.3%	21.9%	15.3%	7.1%	—
ROCE	18.6%	28.7%	25.2%	14.4%	—
Total Debt	₹60 Cr	₹99 Cr	₹96 Cr	₹239 Cr	+58.8%
Free Cash Flow	₹10 Cr	-₹33 Cr	₹15 Cr	-₹126 Cr	—

🟢 Revenue has grown at 16.1% a year over 3 years.

🟢 EBITDA has grown at 15.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 54.3% to 53.0% over 3 years (-1.3 pts).

🟢 PAT (Net Profit) has grown at 2.6% a year over 3 years.

🟡 EPS has been broadly flat over 3 years (0.8% a year).

🔴 ROE has fallen from 11.3% to 7.1% over 3 years (-4.2 pts).

🔴 ROCE has fallen from 18.6% to 14.4% over 3 years (-4.2 pts).

🔴 Total Debt has grown at 58.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹10 Cr to -₹126 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,098 Cr

Total Liabilities

₹657 Cr

Total Debt

₹239 Cr

Cash & Equivalents

₹29 Cr

Operating Cash Flow

-₹122 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.8%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

18 Sept 2026

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC LIFE INS CO LTD	58.4x	11.3%
SBI LIFE INSURANCE CO LTD	63.9x	13.7%

Recent News

3 mixed3 general

Arihant Capital Markets share price rallies 9% to Rs.99 today: Check 1-week, 1-month, 1-year returns

TradingView, 23 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Insiders Sold ₹350m Of Arihant Capital Markets Stock Possibly Sending Warning Sign

Simply Wall Street, 29 Sept

Arihant Capital Markets share price rallies 9% to ₹99 today: Check 1-week, 1-month, 1-year returns - Should you buy?

Livemint, 23 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Arihant Capital Markets Share Price News: Rs 89.23 Gain

Univest, 22 Sept

Arihant Capital Markets publishes Q1FY26 results in newspapers

scanx.trade, 27 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Arihant Capital Markets Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong17/20

🟡GrowthModest10.9/20

🟡ProfitabilityModerate7.5/15

🔴ValuationDemanding6.1/15

🔴RiskHigh4/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

This thesis breaks if

✓Revenue growth stays above 12% a year16.1% CAGR
✓EBITDA margin holds above 51%53.0%
✗Return on equity stays above 8%7.1%
✗Interest cover stays above 3x2.9x
✗Valuation vs its own median of 18.7x26.5x today