Ken Financial Services Limited

Financial Services — Credit Services · BSE

₹16.20−₹0.80 (−4.71%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

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, 6:58 pm

Understanding the Business

Company site ↗

The 60-second version of Ken 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?

Ken Financial Services Limited is a non-systemically important non-deposit taking non-banking financial company (NBFC) in India. It offers lending services for retail, small and medium enterprises, and commercial customers; and loan products and professional fee-based services.

IndustryCredit Services

SectorFinancial Services

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹43 reaches shareholders as profit, with ₹-403 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 -87% while net margin moved +444% 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-87%

Margin effect+444%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 49.5% a year
✗ Profit has declined at 11.1% a year

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

88/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

10.3x

3Y Median

49.1x

40 monthly readings · mean 36.4x · range 3.5x–77.8x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 79% below its 3y median of 49.1x. 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 40% below the peer median of 17.0x.

vs. its own history

Cheap

49.1x median over 40 months · -79%

vs. sector peers

Cheap

17.0x median of 4 peers · -40%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

—

PEG

0.41

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 8.8% to 5.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.9% to -25.1% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 430.0 points, from 26.6% to -403.4%.
🟡Profit is decliningFinancial
Net profit is down 30% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 79% 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.
Cheaper than its peers
It trades 40% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 26.6% to -403.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 8.8% to 5.6%. 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

1EBITDA margin holds above -405%✓ -403.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ 5.6%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 49.1x✓ 10.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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

₹5 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.3x

Cheap

Cheap against the generic band

P/B Ratio

0.63x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.58

Profitable

Profitable on a per-share basis

ROE

5.6%

Weak

Weak capital efficiency

ROCE

-25.1%

Weak

Low return on total capital employed

Debt/Equity

1.15x

Moderate

Moderate leverage

Revenue Growth (YoY)

99.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

25.0%

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

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

24.2%

Good

Healthy core-business profitability

Net Margin

7.5%

Average

Average bottom-line conversion

Current Ratio

9.29

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.39

Defensive

Steadier than the market

52W Range Position

84%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

16.0 / 14.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹8 Cr	₹1 Cr	₹1 Cr	₹1 Cr	-49.5%
EBITDA	₹2 Cr	₹0 Cr	₹0 Cr	-₹4 Cr	—
EBITDA Margin	26.6%	28.4%	19.0%	-403.4%	—
PAT (Net Profit)	₹1 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-11.1%
EPS	₹2.06	₹0.26	₹0.28	₹1.45	-11.0%
ROE	8.8%	1.1%	1.2%	5.6%	—
ROCE	15.9%	1.2%	1.2%	-25.1%	—
Total Debt	₹2 Cr	₹2 Cr	₹2 Cr	₹9 Cr	+58.8%
Free Cash Flow	₹18 Cr	-₹0 Cr	-₹0 Cr	-₹6 Cr	—

🔴 Revenue has shrunk at 49.5% a year over 3 years.

🔴 EBITDA has turned negative, from ₹2 Cr to -₹4 Cr.

🔴 EBITDA Margin has fallen from 26.6% to -403.4% over 3 years (-430.0 pts).

🔴 PAT (Net Profit) has shrunk at 11.1% a year over 3 years.

🔴 EPS has shrunk at 11.0% a year over 3 years.

🔴 ROE has fallen from 8.8% to 5.6% over 3 years (-3.1 pts).

🔴 ROCE has fallen from 15.9% to -25.1% over 3 years (-41.0 pts).

🔴 Total Debt has grown at 58.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹18 Cr to -₹6 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹19 Cr

Total Liabilities

₹11 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹6 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

47.5%

Corporate Actions

Ex-Dividend Date

24 Sept 2010

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

Ken Financial AGM resolutions pass with high shareholder support

scanx.trade, 26 Sept

Ken Financial Services reappoints Neha Bhageria as independent director for second term

scanx.trade, 26 Sept

What on earth’s happening to the Aviva share price and can it still hit 820p?

The Twelfth Magpie, 23 Sept

Where TCS, HCLTech, Infosys, and the rest still win

The Ken, 13 Jun

U. Y. Fincorp standalone net profit rises 228.64% 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.

His Bet On Home Depot Made Ken Langone A Billionaire. Now He Sees Eli Lilly Stock Hitting $2,000

Yahoo Finance, 22 Sept

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

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 3 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑