DhanSafal Finserve Limited

Financial Services — Credit Services · BSE

₹2.46+₹0.05 (+2.07%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by short-term liabilities exceed short-term assets, 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, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

DhanSafal Finserve Limited, a non-banking finance company, provides retail financial services in India.

IndustryCredit Services

SectorFinancial Services

Employees67

Annual revenue₹12 Cr

How does it make money?

Turns over ₹12 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 67 employees supports ₹17.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹17.8 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 +562% while net margin moved -83% 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+562%

Margin effect-83%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 1.1% is weak
✗ ROE has fallen by 3.4 points over the period

Quality vs. Valuation

Company Quality

57/ 100

Average

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

Valuation

43/ 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

49.2x

3Y Median

98.6x

40 monthly readings · mean 109.6x · range 72.1x–205.5x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 50% below its 3y median of 98.6x. 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 190% above the peer median of 17.0x.

vs. its own history

Cheap

98.6x median over 40 months · -50%

vs. sector peers

Expensive

17.0x median of 4 peers · +190%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

38.7x

PEG

15.61

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 4.5% to 1.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 6.4% to 1.8% — often a sign of competition or overexpansion.
Short-term liquidity is tight
Current ratio of 0.64 — near-term obligations exceed near-term assets.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 43.4 points, from 60.4% to 17.1%.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 77% 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 50% 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?

Margins are being competed away
EBITDA margin has fallen from 60.4% to 17.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
A premium to the sector to defend
It trades 190% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 4.5% to 1.1%. 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 66% a year✓ 87.8% CAGR
Latest reported year was 63.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 1.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 4x✓ 6.4x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 98.6x✓ 49.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

5 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹58 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

49.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.93x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.05

Profitable

Profitable on a per-share basis

ROE

1.1%

Weak

Weak capital efficiency

ROCE

1.8%

Weak

Low return on total capital employed

Debt/Equity

0.33x

Low

Conservative leverage

Revenue Growth (YoY)

63.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

200.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹39 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

43.3%

Good

Healthy core-business profitability

Net Margin

8.3%

Average

Average bottom-line conversion

Current Ratio

0.64

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.38

Defensive

Steadier than the market

52W Range Position

20%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2.6 / 2.5

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

50.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	₹2 Cr	₹5 Cr	₹12 Cr	+87.8%
EBITDA	₹1 Cr	₹1 Cr	₹1 Cr	₹2 Cr	+23.2%
EBITDA Margin	60.4%	57.7%	15.7%	17.1%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹0 Cr	₹1 Cr	+3.2%
EPS	₹0.05	₹0.05	₹0.02	₹0.03	-16.2%
ROE	4.5%	3.9%	0.7%	1.1%	—
ROCE	6.4%	5.7%	1.2%	1.8%	—
Total Debt	—	₹1 Cr	₹11 Cr	₹22 Cr	—
Free Cash Flow	₹4 Cr	-₹3 Cr	-₹37 Cr	-₹39 Cr	—

🟢 Revenue has grown at 87.8% a year over 3 years.

🟢 EBITDA has grown at 23.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 60.4% to 17.1% over 3 years (-43.4 pts).

🟢 PAT (Net Profit) has grown at 3.2% a year over 3 years.

🔴 EPS has shrunk at 16.2% a year over 3 years.

🔴 ROE has fallen from 4.5% to 1.1% over 3 years (-3.4 pts).

🔴 ROCE has fallen from 6.4% to 1.8% over 3 years (-4.6 pts).

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹39 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹92 Cr

Total Liabilities

₹25 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹39 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

62.3%

Corporate Actions

Ex-Dividend Date

09 Sept 2024

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 positive1 mixed4 general

Dhansafal Finserve AGM approves all resolutions with 99.99% majority

scanx.trade, 23 Sept

Dhansafal Finserve Q1FY27 net profit rises 288% to ₹58 lakh on AUM growth

scanx.trade, 13 AugResults

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

DhanSafal Finserve (BSE:512048) - Stock Analysis

Simply Wall Street, 28 May

Dhansafal and Vastu Finserve Forge Strategic Co-Lending Partnership to Drive Inclusive Credit Access

Business Standard, 28 MayPartnership

🟡Mixed / dependsA partnership, whose value depends entirely on terms that a headline will not carry. Worth reading the filing before assuming either way.

DhanSafal Finserve Board Approves Conversion of 1.25 Crore Share Warrants

scanx.trade, 30 Mar

DhanSafal Finserve (BSE:DHANSAFAL): MSME Lending, Retail Finance and Business Outlook

Kalkine India, 08 Sept

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

StrongFinancial Health

MiddlingBusiness Quality · Growth · Valuation

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

1 of 5 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑