Arman Financial Services Limited

Financial Services — Credit Services · NSE

₹1,540.00−₹34.70 (−2.20%)

DalalBaazaar Score

62 / 100

🟢 Good

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 modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Arman Financial Services Limited, together with its subsidiary, operates as a non-banking finance company in India.

IndustryCredit Services

SectorFinancial Services

Employees1,753

Annual revenue₹586 Cr

How does it make money?

Turns over ₹586 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹39 left at the operating level before interest, tax and depreciation. Each of its 1,753 employees supports ₹33.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹33.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

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.

Peer median ROE16.5%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +51% while net margin moved -60% 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+51%

Margin effect-60%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 14.7% is steady
✗ Profit has declined at 15.5% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

61/ 100

Average

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

Valuation

68/ 100

Cheap

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

14.0x

3Y Median

21.7x

40 monthly readings · mean 21.1x · range 6.4x–39.4x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 36% below its 3y median of 21.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 18% below the peer median of 17.0x.

vs. its own history

Cheap

21.7x median over 40 months · -36%

vs. sector peers

Fair

17.0x median of 4 peers · -18%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

14.4x

PEG

1.61

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 25.7% to 6.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.0% to 4.1% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Profit is decliningFinancial
Net profit is down 40% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 24% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 36% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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?

Returns on shareholder capital are falling
ROE has dropped from 25.7% to 6.1%. 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.
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 11% a year✓ 14.7% CAGR
Latest reported year was 265.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 37%✓ 39.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 6.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 21.7x✓ 14.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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

3 good · 4 neutral · 4 weak

Market Cap

₹1,624 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.0x

Cheap

Cheap against the generic band

P/B Ratio

1.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹110.05

Profitable

Profitable on a per-share basis

ROE

6.1%

Weak

Weak capital efficiency

ROCE

4.1%

Weak

Low return on total capital employed

Debt/Equity

1.90x

High

High leverage

Revenue Growth (YoY)

265.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.7%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹480 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

48.4%

Good

Healthy core-business profitability

Net Margin

30.8%

Good

Strong bottom-line conversion

Current Ratio

1.99

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.27

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1766.3 / 1896.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

14.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹389 Cr	₹616 Cr	₹617 Cr	₹586 Cr	+14.7%
EBITDA	₹148 Cr	₹224 Cr	₹222 Cr	₹230 Cr	+15.7%
EBITDA Margin	38.2%	36.4%	36.1%	39.2%	—
PAT (Net Profit)	₹94 Cr	₹174 Cr	₹52 Cr	₹57 Cr	-15.5%
EPS	₹107.28	₹192.76	₹49.26	₹53.57	-20.7%
ROE	25.7%	21.4%	6.0%	6.1%	—
ROCE	12.0%	17.2%	5.5%	4.1%	—
Total Debt	₹1,604 Cr	₹1,725 Cr	₹1,232 Cr	₹1,776 Cr	+3.4%
Free Cash Flow	-₹720 Cr	-₹305 Cr	₹467 Cr	-₹480 Cr	—

🟢 Revenue has grown at 14.7% a year over 3 years.

🟢 EBITDA has grown at 15.7% a year over 3 years.

🟢 EBITDA Margin has risen from 38.2% to 39.2% over 3 years (+1.1 pts).

🔴 PAT (Net Profit) has shrunk at 15.5% a year over 3 years.

🔴 EPS has shrunk at 20.7% a year over 3 years.

🔴 ROE has fallen from 25.7% to 6.1% over 3 years (-19.6 pts).

🔴 ROCE has fallen from 12.0% to 4.1% over 3 years (-7.9 pts).

🔴 Total Debt has grown at 3.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,798 Cr

Total Liabilities

₹1,864 Cr

Cash & Equivalents

₹88 Cr

Operating Cash Flow

-₹476 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

11.4%

Insider Holding

30.7%

Corporate Actions

Ex-Dividend Date

13 Sept 2019

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

2 mixed4 general

Arman Financial appoints Chandramouli Akkiraju as CBO of Namra Finance

scanx.trade, 16 Oct

Arman Financial Services: Best Stock in Its Sector? Key Metrics

Univest, 23 Sept

Arman Financial Services Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Arman Financial Services Limited Reports Earnings Results for the First Quarter Ended June 30, 2026

marketscreener.com, 12 AugResults

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

Arman Financial Services Limited's (NSE:ARMANFIN) market cap up ₹1.6b last week, benefiting both retail investors who own 46% as well as insiders

Simply Wall Street, 18 Dec

Arman Financial Services closes trading window from Oct 1 for Q2FY27 results

scanx.trade, 25 SeptResults

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

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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Valuation

MiddlingProfitability

WeakGrowth · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

1 of 4 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑