Challani Capital Limited

Financial Services — Credit Services · BSE

₹19.17₹0.00 (0.00%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Challani Capital Limited provides financing services in India. The company offers loan against property; vehicle loans, including heavy duty, medium duty, intermediate duty, light duty, pick up, and mini trucks; gold loans; and education loans.

IndustryCredit Services

SectorFinancial Services

Employees4

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹55 reaches shareholders as profit, with ₹-4 left at the operating level before interest, tax and depreciation. Each of its 4 employees supports ₹34.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹34.1 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +118% while net margin moved -69% 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+118%

Margin effect-69%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 61.8x is demanding — it needs sustained high growth to justify
✗ P/E is 138% above its own historical median of 26.0x — expensive by its own standards

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

28/ 100

Expensive

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

61.8x

3Y Median

26.0x

40 monthly readings · mean 38.7x · range 15.2x–88.4x

Sector Median

17.0x

median of 4 sector peers

⚠️Current valuation is approximately 138% above its 3y median of 26.0x. 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 264% above the peer median of 17.0x.

vs. its own history

Expensive

26.0x median over 40 months · +138%

vs. sector peers

Expensive

17.0x median of 4 peers · +264%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -169.7% to -4.1% over 3 years.
Return on capital is rising
ROCE has improved from 0.1% to 4.1%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 21.5% to 9.1% — each rupee of shareholder capital earns less than it did.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 33% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -169.7% to -4.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 138% 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 21.5% to 9.1%. 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 22% a year✓ 29.6% CAGR
Latest reported year was -58.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -6%✓ -4.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 5.8%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 26.0x✗ 61.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

4 / 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

2 good · 3 neutral · 6 weak

Market Cap

₹29 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

61.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.39x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.31

Profitable

Profitable on a per-share basis

ROE

5.8%

Weak

Weak capital efficiency

ROCE

4.1%

Weak

Low return on total capital employed

Debt/Equity

5.19x

High

High leverage

Revenue Growth (YoY)

-58.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-63.3%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

4.7%

Average

Average asset productivity

Operating Margin

57.6%

Good

Healthy core-business profitability

Net Margin

88.0%

Good

Strong bottom-line conversion

Current Ratio

367.19

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.49

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

18.1 / 18.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

62.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+29.6%
EBITDA	-₹1 Cr	-₹0 Cr	-₹1 Cr	-₹0 Cr	—
EBITDA Margin	-169.7%	-23.1%	-42.9%	-4.1%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹2 Cr	₹1 Cr	-12.3%
EPS	₹0.74	₹0.34	₹1.24	₹0.5	-12.3%
ROE	21.5%	8.9%	24.7%	9.1%	—
ROCE	0.1%	2.6%	8.6%	4.1%	—
Free Cash Flow	-₹3 Cr	-₹1 Cr	₹1 Cr	₹1 Cr	—

🟢 Revenue has grown at 29.6% a year over 3 years.

🟢 EBITDA Margin has risen from -169.7% to -4.1% over 3 years (+165.7 pts).

🔴 PAT (Net Profit) has shrunk at 12.3% a year over 3 years.

🔴 EPS has shrunk at 12.3% a year over 3 years.

🔴 ROE has fallen from 21.5% to 9.1% over 3 years (-12.5 pts).

🟢 ROCE has risen from 0.1% to 4.1% over 3 years (+4.0 pts).

🟢 Free Cash Flow has turned positive, from -₹3 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10 Cr

Total Liabilities

₹1 Cr

Total Debt

—

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹1 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.0%

Corporate Actions

Ex-Dividend Date

23 Sept 2011

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 mixed2 negative2 general

Challani Capital standalone net profit declines 61.36% in the June 2026 quarter

Business Standard, 10 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Challani Capital Q1 Results: Net profit falls 91% YoY to ₹17 lakh

scanx.trade, 12 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Swati Projects Ltd. (SWATIPRO) Share Price Surges 8.2% Today

Univest, 28 JulPrice 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.

Indo Asia Finance Ltd Share Price

Business Today, 31 Jan

JMJFIN Stock Price and Chart — BSE:JMJFIN

TradingView, 07 Oct

Q2 results today: ONGC, Vodafone Idea, Bajaj Finance among 200+ companies to declare earnings on November 10

Livemint, 10 NovResults

🟡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

Revenue growth is negative (-58.9%) on the latest reported period — check if this is one-off or a trend.
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

MiddlingProfitability

WeakGrowth · Valuation · 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.

2 of 4 tripwires tripped — Return on equity stays above 8%; Valuation vs its own median of 26.0x · see Key things to watch ↑