ESAF Small Finance Bank

Financial Services — Banks - Regional · NSE

₹44.01+₹0.33 (+0.76%)

DalalBaazaar Score

31 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

ESAF Small Finance Bank provides banking products and services to rural and semi-urban markets in India. The company operates through four segments: Treasury, Wholesale Banking, Retail Banking, and Other Banking Operations.

IndustryBanks - Regional

SectorFinancial Services

Employees8,797

Annual revenue₹2,512 Cr

How does it make money?

Turns over ₹2,512 Cr a year. Of every ₹100 of sales, about ₹-7 reaches shareholders as profit. Each of its 8,797 employees supports ₹28.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹28.6 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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +22% while net margin moved -145% 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+22%

Margin effect-145%

DalalBaazaar Score

31/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ The business is lossmaking at the net level
• Revenue has compounded at 6.9% a year, which is the base these returns are earned on
• Lender: ROCE is excluded here because borrowing is raw material for this business, not leverage

Quality vs. Valuation

Company Quality

27/ 100

Weak

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

Valuation

36/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 17.6% to -9.3% — each rupee of shareholder capital earns less than it did.

Red Flags

1 item require attention · 1 high

🔴The company is lossmakingFinancial
Net profit of -₹166 Cr in the latest reported year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 6.9% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 17.6% to -9.3%. 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

1Return on equity stays above 8%✗ -9.3%
For a lender this is the cleanest single read on whether the book is being grown profitably.
2Revenue growth stays above 5% a year✓ 6.9% CAGR
Latest reported year was 74.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

4 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 4 neutral · 4 weak

Market Cap

₹2,271 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1.27x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.11

Loss-making

Negative earnings per share — the business is losing money

ROE

-9.3%

Weak

Weak capital efficiency

ROCE

Not meaningful

N/A for lenders

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

Debt/Equity

1.26x

Moderate

Moderate leverage

Revenue Growth (YoY)

74.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

68.1%

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

-₹2,243 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

18.1%

Good

Healthy core-business profitability

Net Margin

-0.3%

Weak

Very little revenue reaches the bottom line

Beta (vs Nifty)

1.00

Market-like

Moves roughly in line with the market

52W Range Position

92%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

42.4 / 41.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,055 Cr	₹2,811 Cr	₹2,519 Cr	₹2,512 Cr	+6.9%
PAT (Net Profit)	₹302 Cr	₹426 Cr	-₹521 Cr	-₹166 Cr	—
EPS	₹5.87	₹8.96	₹-10.13	₹-3.23	—
ROE	17.6%	17.1%	-26.8%	-9.3%	—
Total Debt	₹2,680 Cr	₹2,573 Cr	₹1,406 Cr	₹2,253 Cr	-5.6%
Free Cash Flow	-₹642 Cr	₹930 Cr	₹3,024 Cr	-₹2,243 Cr	—

🟢 Revenue has grown at 6.9% a year over 3 years.

🔴 PAT (Net Profit) has turned negative, from ₹302 Cr to -₹166 Cr.

🔴 EPS has turned negative, from ₹5.87 to ₹-3.23.

🔴 ROE has fallen from 17.6% to -9.3% over 3 years (-26.9 pts).

🟢 Total Debt has shrunk at 5.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹30,868 Cr

Total Liabilities

₹29,081 Cr

Cash & Equivalents

₹1,175 Cr

Operating Cash Flow

-₹1,960 Cr

Capex

-₹283 Cr

Shareholding (proxy)

Institutional Holding

2.8%

Insider Holding

73.9%

Corporate Actions

Ex-Dividend Date

07 Aug 2024

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

2 mixed4 general

ESAF Small Finance Bank Upper Circuit Today: Price, Data and Peers

Univest, 12 Oct

ESAF Small Finance Bank to meet JNJ Holdings on June 29

scanx.trade, 15 Oct

ESAF Small Finance Bank Back in Black, Posts Rs 80 Cr Profit in Q1

HDFC Sky, 31 JulResults

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

ESAF Small Finance Bank Q2 Business Update: Deposits Up 24% YoY

Whalesbook, 01 OctResults

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

ESAF Small Finance Bank Board Approves ₹500 Crore Tier II NCD Private Placement

Sahi, 23 Sept

ESAF Small Finance Bank's (NSE:ESAFSFB) largest shareholders are private companies who were rewarded as market cap surged ₹1.7b last week

Simply Wall Street, 17 Jan

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
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

MiddlingValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 2 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑