Capital Small Finance Bank Limited

Financial Services — Banks - Regional · NSE

₹275.85+₹4.10 (+1.51%)

DalalBaazaar Score

74 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Reasonable but unspectacular business quality, 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, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Capital Small Finance Bank Limited provides a range of banking and financial products and services for individuals and businesses in India. It operates through four segments: Treasury, Wholesale Banking, Retail Banking, and Other Banking Operations.

IndustryBanks - Regional

SectorFinancial Services

Employees2,311

Annual revenue₹560 Cr

How does it make money?

Turns over ₹560 Cr a year. Of every ₹100 of sales, about ₹25 reaches shareholders as profit. Each of its 2,311 employees supports ₹24.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹24.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are HDFC BANK LTD, ICICI BANK LTD., KOTAK MAHINDRA BANK LTD, AXIS BANK LIMITED. 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 ROE13.8%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 20.3% and earnings to grow about 26.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.3%

Est. earnings growth+26.6%

Analysts3

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 +51% while net margin moved +0% 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+0%

DalalBaazaar Score

74/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.83 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✓ Profits have been consistent from year to year
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

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

Valuation

80/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

8.3x

3Y Median

9.6x

34 monthly readings · mean 10.7x · range 7.5x–18.4x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 13% below its 3y median of 9.6x. 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 51% below the peer median of 17.0x.

vs. its own history

Fair

9.6x median over 34 months · -13%

vs. sector peers

Cheap

17.0x median of 4 peers · -51%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

—

PEG

0.57

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 15.3% to 9.7% — each rupee of shareholder capital earns less than it did.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 51% 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?

Returns on shareholder capital are falling
ROE has dropped from 15.3% to 9.7%. 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✓ 14.6% CAGR
Latest reported year was 21.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2Return on equity stays above 9%✓ 10.5%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 9.6x✓ 8.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹1,255 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.3x

Cheap

Cheap against the generic band

P/B Ratio

0.84x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹33.1

Profitable

Profitable on a per-share basis

ROE

10.5%

Moderate

Moderate capital efficiency

ROCE

Not meaningful

N/A for lenders

Banks and NBFCs don't report capital employed the way other businesses do

Debt/Equity

0.34x

Low

Conservative leverage

Revenue Growth (YoY)

21.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

28.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.81%

Modest

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

Free Cash Flow

-₹412 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

5.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

1.3%

Weak

Assets generate little profit

Operating Margin

36.6%

Good

Healthy core-business profitability

Net Margin

29.3%

Good

Strong bottom-line conversion

Beta (vs Nifty)

0.83

Market-like

Moves roughly in line with the market

52W Range Position

59%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

276.6 / 280.9

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

42.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹371 Cr	₹413 Cr	₹496 Cr	₹560 Cr	+14.6%
PAT (Net Profit)	₹94 Cr	₹112 Cr	₹132 Cr	₹141 Cr	+14.7%
EPS	₹20.78	₹30.45	₹29.09	₹31.09	+14.4%
ROE	15.3%	9.3%	9.8%	9.7%	—
Total Debt	₹721 Cr	₹472 Cr	₹321 Cr	₹499 Cr	-11.5%
Free Cash Flow	₹55 Cr	₹97 Cr	₹258 Cr	-₹412 Cr	—

🟢 Revenue has grown at 14.6% a year over 3 years.

🟢 PAT (Net Profit) has grown at 14.7% a year over 3 years.

🟢 EPS has grown at 14.4% a year over 3 years.

🔴 ROE has fallen from 15.3% to 9.7% over 3 years (-5.7 pts).

🟢 Total Debt has shrunk at 11.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹55 Cr to -₹412 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹12,144 Cr

Total Liabilities

₹10,683 Cr

Cash & Equivalents

₹1,402 Cr

Operating Cash Flow

-₹385 Cr

Capex

-₹27 Cr

Shareholding (proxy)

Institutional Holding

17.0%

Insider Holding

40.9%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

18 Jun 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹423.67

+53.6% vs CMP

Target Range

₹381 – ₹490

Peer Comparison

Company	P/E	ROE
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%
KOTAK MAHINDRA BANK LTD	21.9x	11.2%
AXIS BANK LIMITED	14.5x	13.4%

Recent News

1 positive2 mixed3 general

Capital Small Finance Bank (CAPITALSFB.NS) Slips to ₹280.2 as Stock Nears Key Support Zone - Anchored VWAP

https://www.siam.in/, 28 Sept

CAPITALSFB Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Capital Small Finance Bank Share Price: Buy or Sell

Univest, 11 Sept

AU Small Finance Bank Ltd (NSE:AUBANK) Q1 2027 Earnings Call Highlights: Strong Profit and Loan ...

Yahoo Finance, 26 JulResults

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

Capital Small Finance Bank standalone net profit rises 17.06% in the March 2026 quarter

Business Standard, 29 AprResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Capital Small Finance Bank closes in on final RBI metric for universal bank license as bad loans fall

Livemint, 26 Jul

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

StrongBusiness Quality · Financial Health · Growth · Valuation

MiddlingProfitability · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 3 tripwires holding · see Key things to watch ↑