Frontier Capital Limited

Financial Services — Credit Services · BSE

₹12.72+₹0.60 (+4.95%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Valuation 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 Frontier Capital Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Frontier Capital Limited, a non-deposit taking non-banking finance company, engages in the business of granting of loans and advances in India. The company offers vehicle, channel, and business finance, as well as bill discounting services.

IndustryCredit Services

SectorFinancial Services

Annual revenue₹0 Cr

How does it make money?

Turns over ₹0 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹45 left at the operating level before interest, tax and depreciation.

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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +12% while net margin moved -85% 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+12%

Margin effect-85%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 318.0x is demanding — it needs sustained high growth to justify
✗ P/E is 131% above its own historical median of 137.8x — expensive by its own standards
✗ P/B of 7.62x is a steep premium to book

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

23/ 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

318.0x

3Y Median

137.8x

40 monthly readings · mean 164.9x · range 20.8x–424.0x

Sector Median

17.0x

median of 4 sector peers

⚠️Current valuation is approximately 131% above its 3y median of 137.8x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 1771% above the peer median of 17.0x.

vs. its own history

Expensive

137.8x median over 40 months · +131%

vs. sector peers

Expensive

17.0x median of 4 peers · +1771%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

134.6x

PEG

96.36

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 12.1% to 1.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 10.4% to 5.1% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 32.9 points, from 78.3% to 45.4%.
🟡Profit is decliningFinancial
Net profit is down 83% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 78.3% to 45.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 131% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 3.8% 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 12.1% to 1.7%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 43%✓ 45.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ 1.7%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Revenue growth stays above 4% a year✗ 3.8% CAGR
Latest reported year was 2.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Valuation vs its own median of 137.8x✗ 318.0x 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

2 good · 4 neutral · 5 weak

Market Cap

₹21 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

318.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

7.62x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹0.04

Profitable

Profitable on a per-share basis

ROE

1.7%

Weak

Weak capital efficiency

ROCE

5.1%

Weak

Low return on total capital employed

Debt/Equity

6.84x

High

High leverage

Revenue Growth (YoY)

2.7%

Modest

Modest growth

Profit Growth (YoY)

3.3%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

42.8%

Good

Healthy core-business profitability

Net Margin

7.4%

Average

Average bottom-line conversion

Current Ratio

7.60

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.44

Defensive

Steadier than the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

10.8 / 10.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

69.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+3.8%
EBITDA	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-13.4%
EBITDA Margin	78.3%	46.0%	86.7%	45.4%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-44.8%
EPS	₹0.17	₹0.07	₹0.18	₹0.03	-43.9%
ROE	12.1%	4.5%	10.8%	1.7%	—
ROCE	10.4%	4.5%	10.8%	5.1%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+44.1%
Free Cash Flow	₹1 Cr	-₹0 Cr	-₹0 Cr	₹0 Cr	-36.3%

🟢 Revenue has grown at 3.8% a year over 3 years.

🔴 EBITDA has shrunk at 13.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 78.3% to 45.4% over 3 years (-32.9 pts).

🔴 PAT (Net Profit) has shrunk at 44.8% a year over 3 years.

🔴 EPS has shrunk at 43.9% a year over 3 years.

🔴 ROE has fallen from 12.1% to 1.7% over 3 years (-10.4 pts).

🔴 ROCE has fallen from 10.4% to 5.1% over 3 years (-5.3 pts).

🔴 Total Debt has grown at 44.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 36.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3 Cr

Total Liabilities

₹0 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹0 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

56.1%

Corporate Actions

Ex-Dividend Date

19 Sept 2016

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

Frontier Capital board approves SPA for ₹10/share stake acquisition

scanx.trade, 17 OctM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Frontier Capital: మేనేజ్‌మెంట్ చేతులు మారనున్నాయి! **26%** వాటాకు ఓపెన్ ఆఫర్ ప్రకటన

Whalesbook, 13 Oct

Frontier Capital Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 03 Sept

Frontier Capital ਵਿੱਚ ਵੱਡਾ ਬਦਲਾਅ! ਨਵੇਂ ਪ੍ਰਮੋਟਰਾਂ ਨੇ ਕੀਤਾ **26%** ਦਾ ਓਪਨ ਆਫਰ, ਸ਼ੇਅਰ ਧਾਰਕਾਂ ਲਈ ਮੌਕਾ

Whalesbook, 13 Oct

Frontier Capital Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 02 Sept

Frontier Springs Ltd. Share Price Drops; Fundamental View

Univest, 13 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

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

StrongFinancial Health

MiddlingBusiness Quality

WeakGrowth · Profitability · Valuation · 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.

3 of 4 tripwires tripped — Return on equity stays above 8%; Revenue growth stays above 4% a year; Valuation vs its own median of 137.8x · see Key things to watch ↑