Fedbank Financial Services Limited

Financial Services — Credit Services · NSE

₹162.00+₹4.42 (+2.80%)

DalalBaazaar Score

79 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

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, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Fedbank Financial Services Limited, a non-banking finance company (NBFC), provides financing services to individuals and businesses in India. It offers loan products, including gold, home, and property loans.

IndustryCredit Services

SectorFinancial Services

Employees5,303

Annual revenue₹2,166 Cr

How does it make money?

Turns over ₹2,166 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 5,303 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, 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 is the outlook?

3 analysts covering the stock expect revenue to grow about 17.4% and earnings to grow about 24.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.4%

Est. earnings growth+24.5%

Analysts3

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 +88% while net margin moved +1% 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+88%

Margin effect+1%

DalalBaazaar Score

79/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.65 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

83/ 100

Excellent

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

Valuation

69/ 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

14.1x

3Y Median

21.3x

37 monthly readings · mean 20.0x · range 11.6x–26.8x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 34% below its 3y median of 21.3x. 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 17% below the peer median of 17.0x.

vs. its own history

Cheap

21.3x median over 37 months · -34%

vs. sector peers

Fair

17.0x median of 4 peers · -17%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

28.6x

PEG

0.59

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention0

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

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 34% 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?

Size brings its own risk
Small 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 18% a year✓ 23.5% CAGR
Latest reported year was 39.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 28%✓ 29.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 13%✓ 14.8%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 21.3x✓ 14.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹6,077 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.1x

Cheap

Cheap against the generic band

P/B Ratio

1.88x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹11.5

Profitable

Profitable on a per-share basis

ROE

14.8%

Moderate

Moderate capital efficiency

ROCE

4.2%

Weak

Low return on total capital employed

Debt/Equity

4.68x

High

High leverage

Revenue Growth (YoY)

39.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

65.7%

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

-₹1,694 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

10.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

2.7%

Weak

Assets generate little profit

Operating Margin

44.0%

Good

Healthy core-business profitability

Net Margin

30.2%

Good

Strong bottom-line conversion

Current Ratio

576.50

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.65

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

151.9 / 154.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

65.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,151 Cr	₹1,522 Cr	₹1,999 Cr	₹2,166 Cr	+23.5%
EBITDA	₹346 Cr	₹415 Cr	₹385 Cr	₹644 Cr	+23.0%
EBITDA Margin	30.1%	27.3%	19.3%	29.7%	—
PAT (Net Profit)	₹180 Cr	₹245 Cr	₹225 Cr	₹344 Cr	+24.0%
EPS	₹5.58	₹7.12	₹6.04	₹9.12	+17.8%
ROE	13.3%	10.8%	8.8%	11.7%	—
ROCE	4.2%	4.5%	3.5%	4.2%	—
Total Debt	₹7,270 Cr	₹8,340 Cr	₹10,437 Cr	₹13,675 Cr	+23.4%
Free Cash Flow	-₹1,489 Cr	-₹789 Cr	-₹996 Cr	-₹1,694 Cr	—

🟢 Revenue has grown at 23.5% a year over 3 years.

🟢 EBITDA has grown at 23.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 29.7% over 3 years.

🟢 PAT (Net Profit) has grown at 24.0% a year over 3 years.

🟢 EPS has grown at 17.8% a year over 3 years.

🔴 ROE has fallen from 13.3% to 11.7% over 3 years (-1.5 pts).

🟡 ROCE has held roughly flat at 4.2% over 3 years.

🔴 Total Debt has grown at 23.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹16,875 Cr

Total Liabilities

₹13,949 Cr

Cash & Equivalents

₹1,340 Cr

Operating Cash Flow

-₹1,664 Cr

Capex

-₹30 Cr

Shareholding (proxy)

Institutional Holding

15.8%

Insider Holding

60.6%

Analyst Consensus

Recommendations

2 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹186.67

+15.2% vs CMP

Target Range

₹160 – ₹200

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 mixed4 general

Buy Fedbank Financial Services; target of Rs 200: ICICI Securities

Moneycontrol.com, 16 Oct

Fedbank Financial Services Ltd Technical Momentum Shifts Amid Mixed Indicator Signals

MarketsMojo, 15 Oct

Fedbank Financial Services Board Meets To Consider ₹2,500 Crore Debt Fundraising

Sahi, 25 Aug

FEDFINA: Future P/E Rerating Will Support Bullish Outlook

Simply Wall Street, 07 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Fedbank Financial Services Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 29 Aug

Fedbank Financial Services Holds Firm at ₹157.86; Range-Bound Trade Continues - Earnings Beat Stocks

https://www.siam.in/, 03 SeptResults

🟡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

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 · Growth · Profitability · Valuation

MiddlingRisk

Points for each in the Score ↑

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.

All 4 tripwires holding · see Key things to watch ↑