Kapil Raj Finance Limited

Financial Services — Credit Services · BSE

₹3.91+₹0.07 (+1.82%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

NEUTRAL

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 both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Kapil Raj Finance Limited engages in financing and investment activities for corporate sectors in India.

IndustryCredit Services

SectorFinancial Services

Employees2

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹68 reaches shareholders as profit, with ₹68 left at the operating level before interest, tax and depreciation. Each of its 2 employees supports ₹40.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin68.3%

Net margin68.3%

Revenue / employee₹40.2 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.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

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.

ROCE3.9%

ROE3.9%

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 +68% while net margin moved +22% 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+68%

Margin effect+22%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.47 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk

Quality vs. Valuation

Company Quality

80/ 100

Excellent

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

Valuation

44/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

65.2x

3Y Median

2750.0x

40 monthly readings · mean 3323.3x · range 32.0x–7570.0x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 98% below its 3y median of 2750.0x. 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 283% above the peer median of 17.0x.

vs. its own history

Cheap

2750.0x median over 40 months · -98%

vs. sector peers

Expensive

17.0x median of 4 peers · +283%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

65.2x

P/B

3.06x

EV/EBITDA

76.2x

PEG

2.42

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 52.0% to 68.3% over 3 years.
Valuation below its historical average
At 65.2x the stock trades 98% below its own median of 2750.0x.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 watch

🟡Shareholders have been dilutedOwnership
Shares outstanding are up 113% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 52.0% to 68.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 98% 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.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 283% above the peer median. That premium needs a reason that persists, or it closes.
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

1Revenue growth stays above 14% a year✓ 18.8% CAGR
Latest reported year was 100.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 66%✓ 68.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 3.9%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 2750.0x✓ 65.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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 · 3 neutral · 3 weak

Market Cap

₹43 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

65.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.06x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.06

Profitable

Profitable on a per-share basis

ROE

3.9%

Weak

Weak capital efficiency

ROCE

3.9%

Weak

Low return on total capital employed

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

100.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

6641.7%

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 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹3.91

Operating Margin

62.5%

Good

Healthy core-business profitability

Net Margin

72.2%

Good

Strong bottom-line conversion

Current Ratio

157.18

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.47

Defensive

Steadier than the market

52W Range Position

93%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

3.2 / 2.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

77.7

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹0 Cr	₹0 Cr	—	₹1 Cr	+18.8%
EBITDA	₹0 Cr	-₹0 Cr	-₹0 Cr	₹1 Cr	+30.1%
EBITDA Margin	52.0%	-15.2%	—	68.3%	—
PAT (Net Profit)	₹0 Cr	-₹0 Cr	-₹0 Cr	₹1 Cr	+26.9%
EPS	₹0	—	₹-0.01	₹0.05	+268.4%
ROE	2.8%	-0.1%	-0.1%	3.9%	—
ROCE	3.7%	-0.2%	-1.5%	3.9%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	—	—
Free Cash Flow	-₹2 Cr	-₹0 Cr	-₹0 Cr	₹1 Cr	—

🟢 Revenue has grown at 18.8% a year over 3 years.

🟢 EBITDA has grown at 30.1% a year over 3 years.

🟢 EBITDA Margin has risen from 52.0% to 68.3% over 3 years (+16.3 pts).

🟢 PAT (Net Profit) has grown at 26.9% a year over 3 years.

🟢 EPS has grown at 268.4% a year over 3 years.

🟢 ROE has risen from 2.8% to 3.9% over 3 years (+1.1 pts).

🟡 ROCE has held roughly flat at 3.9% over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14 Cr

Total Liabilities

₹0 Cr

Total Debt

—

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹1 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

57.2%

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 positive5 general

Agarwal family launches $2.31M open offer to take over Kapil Raj Finance

Dealroom, 06 Oct

SEBI probes Kapil Raj Finance over suspected share pump-and-dump, searches six locations

Moneycontrol.com, 28 Aug

Kapil Raj Finance acquirers launch ₹22.22 crore open offer at ₹2.24 per share

scanx.trade, 06 Oct

Kapil Raj Finance Limited announced that it expects to receive INR 15.00352 million in funding

marketscreener.com, 21 Sept

Kapil Raj Finance standalone net profit rises 550.00% in the June 2026 quarter

Business Standard, 10 AugResults

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

Kapil Raj Finance sets AGM for Oct 21; book closure from Oct 15

scanx.trade, 21 Sept

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.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟢Business QualityStrong15.9/20

🟢Financial HealthStrong17/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate8.9/15

🟡ValuationFair8.3/15

🔴RiskHigh4.4/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you.

This thesis breaks if

✓Revenue growth stays above 14% a year18.8% CAGR
✓EBITDA margin holds above 66%68.3%
✗Return on equity stays above 8%3.9%
✓Valuation vs its own median of 2750.0x65.2x today