CSL Finance Limited

Financial Services — Credit Services · NSE

₹205.51−₹2.47 (−1.19%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

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, 6:07 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 CSL Finance Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

CSL Finance Limited, a non-banking financial company, provides SME and wholesale loaning businesses in India.

IndustryCredit Services

SectorFinancial Services

Employees507

Annual revenue₹250 Cr

How does it make money?

Turns over ₹250 Cr a year. Of every ₹100 of sales, about ₹34 reaches shareholders as profit, with ₹49 left at the operating level before interest, tax and depreciation. Each of its 507 employees supports ₹49.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin48.6%

Net margin34.4%

Revenue / employee₹49.4 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.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

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.

ROCE7.6%

ROE13.9%

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 +119% while net margin moved -14% 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+119%

Margin effect-14%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.47 — historically steadier than the index
✗ 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

73/ 100

Good

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

Valuation

84/ 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

5.4x

3Y Median

11.1x

40 monthly readings · mean 12.4x · range 5.5x–23.3x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 52% below its 3y median of 11.1x. 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 68% below the peer median of 17.0x.

vs. its own history

Cheap

11.1x median over 40 months · -52%

vs. sector peers

Cheap

17.0x median of 4 peers · -68%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

5.4x

P/B

0.75x

EV/EBITDA

10.2x

PEG

0.23

Dividend Yield

1.46%

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 5.4x the stock trades 52% below its own median of 11.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Margins are compressing
EBITDA margin has slipped from 56.0% to 48.6% over 3 years.
Return on capital is falling
ROCE has declined from 10.7% to 7.6% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.4 points, from 56.0% to 48.6%.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 52% 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.
Cheaper than its peers
It trades 68% 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?

Margins are being competed away
EBITDA margin has fallen from 56.0% to 48.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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✓ 29.8% CAGR
Latest reported year was 15.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 47%✓ 48.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 12%✓ 13.9%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 11.1x✓ 5.4x 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

4 good · 5 neutral · 2 weak

Market Cap

₹462 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.4x

Cheap

Cheap against the generic band

P/B Ratio

0.75x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹38.21

Profitable

Profitable on a per-share basis

ROE

13.9%

Moderate

Moderate capital efficiency

ROCE

7.6%

Weak

Low return on total capital employed

Debt/Equity

1.38x

Moderate

Moderate leverage

Revenue Growth (YoY)

15.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

3.9%

Modest

Slow profit growth

Dividend Yield

1.46%

Modest

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

Free Cash Flow

-₹58 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹205.51

Operating Margin

77.3%

Good

Healthy core-business profitability

Net Margin

32.5%

Good

Strong bottom-line conversion

Current Ratio

67.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.47

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

210.5 / 221.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹115 Cr	₹163 Cr	₹210 Cr	₹250 Cr	+29.8%
EBITDA	₹64 Cr	₹92 Cr	₹106 Cr	₹122 Cr	+23.8%
EBITDA Margin	56.0%	56.3%	50.7%	48.6%	—
PAT (Net Profit)	₹46 Cr	₹63 Cr	₹72 Cr	₹86 Cr	+23.6%
EPS	₹21.4	₹28.27	₹31.3	₹37.5	+20.6%
ROE	12.6%	13.3%	13.3%	13.9%	—
ROCE	10.7%	11.4%	—	7.6%	—
Total Debt	₹410 Cr	₹505 Cr	₹697 Cr	₹856 Cr	+27.8%
Free Cash Flow	-₹169 Cr	-₹129 Cr	-₹104 Cr	-₹58 Cr	—

🟢 Revenue has grown at 29.8% a year over 3 years.

🟢 EBITDA has grown at 23.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 56.0% to 48.6% over 3 years (-7.4 pts).

🟢 PAT (Net Profit) has grown at 23.6% a year over 3 years.

🟢 EPS has grown at 20.6% a year over 3 years.

🟢 ROE has risen from 12.6% to 13.9% over 3 years (+1.3 pts).

🔴 ROCE has fallen from 10.7% to 7.6% over 3 years (-3.1 pts).

🔴 Total Debt has grown at 27.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,488 Cr

Total Liabilities

₹866 Cr

Total Debt

₹856 Cr

Cash & Equivalents

₹76 Cr

Operating Cash Flow

-₹57 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.4%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

11 Sept 2026

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

1 positive5 general

CSL Finance Ltd. 52 Week Low Streak: Valuation and Sector

Univest, 13 Oct

CSL Finance Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Compare with CONSOLIDATED SEC.

Equitymaster, 15 Oct

CSL Capital acquires 1.17% stake in CSL Finance for ₹5.71 crore

scanx.trade, 09 Oct

CSL Finance Ltd Falls to 52-Week Low of Rs 201 Amidst Prolonged Downtrend

MarketsMojo, 13 Oct

CSL Finance Q4 revenue surges 21.7% to ₹68.8 crore; net profit climbs to ₹19.4 crore

Sahi, 26 MayResults

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

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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

🟡GrowthModest12.9/20

🟢ProfitabilityStrong10.9/15

🟢ValuationAttractive13.2/15

🟡RiskModerate5.4/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 22% a year29.8% CAGR
✓EBITDA margin holds above 47%48.6%
✓Return on equity stays above 12%13.9%
✓Valuation vs its own median of 11.1x5.4x today