Explicit Finance Limited

Financial Services — Capital Markets · BSE

₹8.10+₹0.38 (+4.92%)

DalalBaazaar Score

39 / 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, but sales are shrinking. 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 Explicit Finance Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Explicit Finance Limited operates as a non-banking finance company in India. The company provides individual/corporate finance; loans against shares and securities, loans against property; and financial consultancy services.

IndustryCapital Markets

SectorFinancial Services

Employees8

Annual revenue₹3 Cr

How does it make money?

Turns over ₹3 Cr a year. Of every ₹100 of sales, about ₹-0 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 8 employees supports ₹40.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹40.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC LIFE INS CO LTD, SBI LIFE INSURANCE CO 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 ROE13.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -86% while net margin moved -833% 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-86%

Margin effect-833%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

30/ 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

31.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Margins are improving
EBITDA margin is up from 0.7% to 7.1% over 3 years.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 high

🔴The company is lossmakingFinancial
Net profit of -₹0 Cr in the latest reported year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 0.7% to 7.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

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

1EBITDA margin holds above 5%✓ 7.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ -0.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.

Investment Checklist

3 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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

1 good · 3 neutral · 7 weak

Market Cap

₹8 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

0.95x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.05

Loss-making

Negative earnings per share — the business is losing money

ROE

-0.1%

Weak

Weak capital efficiency

ROCE

-0.1%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-48.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-36.4%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

14.0%

Average

Average margins

Net Margin

-1.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

5.45

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.48

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

7.5 / 7.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

72.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹23 Cr	₹9 Cr	₹7 Cr	₹3 Cr	-47.7%
EBITDA	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+15.4%
EBITDA Margin	0.7%	4.1%	0.0%	7.1%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	-₹0 Cr	-₹0 Cr	—
EPS	₹0.01	₹0.02	₹-0.01	₹-0.01	—
ROE	0.1%	0.2%	-0.1%	-0.1%	—
ROCE	0.2%	0.2%	-0.1%	-0.1%	—
Free Cash Flow	₹1 Cr	-₹0 Cr	₹1 Cr	-₹2 Cr	—

🔴 Revenue has shrunk at 47.7% a year over 3 years.

🟢 EBITDA has grown at 15.4% a year over 3 years.

🟢 EBITDA Margin has risen from 0.7% to 7.1% over 3 years (+6.4 pts).

🔴 PAT (Net Profit) has turned negative, from ₹0 Cr to -₹0 Cr.

🔴 EPS has turned negative, from ₹0.01 to ₹-0.01.

🟡 ROE has held roughly flat at -0.1% over 3 years.

🟡 ROCE has held roughly flat at -0.1% over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8 Cr

Total Liabilities

₹0 Cr

Total Debt

—

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.3%

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC LIFE INS CO LTD	58.4x	11.3%
SBI LIFE INSURANCE CO LTD	63.9x	13.7%

Recent News

6 general

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

Value Research, 31 Aug

Explicit Finance passes all resolutions at FY26 annual general meeting

scanx.trade, 01 Oct

Explicit Finance Limited Announces Appointment of Dipali Rajendra Marathe as Independent Director

www.marketscreener.com, 01 Oct

SOLLFEGE SMART ELECTRONICS LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 09 Oct

Outcome of board meeting of Shalimar Paints

Business Standard, 13 Aug

AI financial advice is surprisingly good — especially if you ask the right questions

MIT Sloan, 21 Jul

Watch Items

Revenue growth is negative (-48.9%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · 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 ↑