Mukesh Babu Financial Services Limited

Financial Services — Capital Markets · NSE

₹115.00−₹1.00 (−0.86%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Mukesh Babu 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?

Mukesh Babu Financial Services Limited, a non-banking financial company, engages in the lending and investment activities in India. It deals with and trades in shares and securities. The company was incorporated in 1985 and is based in Mumbai, India.

IndustryCapital Markets

SectorFinancial Services

Employees10

Annual revenue₹23 Cr

How does it make money?

Turns over ₹23 Cr a year. Of every ₹100 of sales, about ₹22 reaches shareholders as profit, with ₹44 left at the operating level before interest, tax and depreciation. Each of its 10 employees supports ₹2.33 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.33 Cr

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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +115% while net margin moved -50% 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+115%

Margin effect-50%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.27 — 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

63/ 100

Fair

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

21.1x

Sector Median

58.4x

median of 3 sector peers

🟢Against its sector it trades 64% below the peer median of 58.4x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

58.4x median of 3 peers · -64%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.5x

PEG

9.84

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

1 item require attention · 1 high

🔴Significant margin compressionFinancial
EBITDA margin has fallen 25.7 points, from 69.6% to 43.9%.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 64% 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 69.6% to 43.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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 22% a year✓ 29.0% CAGR
Latest reported year was -42.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 42%✓ 43.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 1.5%
For a lender this is the cleanest single read on whether the book is being grown profitably.

Investment Checklist

5 / 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
✓ 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

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹80 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.1x

Fair

Fairly valued against the generic band

P/B Ratio

0.23x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.46

Profitable

Profitable on a per-share basis

ROE

1.5%

Weak

Weak capital efficiency

ROCE

1.8%

Weak

Low return on total capital employed

Debt/Equity

0.14x

Low

Conservative leverage

Revenue Growth (YoY)

-42.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-69.6%

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

73.8%

Good

Healthy core-business profitability

Net Margin

15.6%

Good

Strong bottom-line conversion

Current Ratio

24.44

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.27

Defensive

Steadier than the market

52W Range Position

23%

Mid-range

Technical Snapshot

RSI (14)

25.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11 Cr	₹7 Cr	₹7 Cr	₹23 Cr	+29.0%
EBITDA	₹8 Cr	₹9 Cr	₹2 Cr	₹10 Cr	+10.7%
EBITDA Margin	69.6%	125.5%	29.5%	43.9%	—
PAT (Net Profit)	₹5 Cr	₹6 Cr	₹1 Cr	₹5 Cr	+2.1%
EPS	₹6.84	₹8.43	₹1.93	₹7.45	+2.9%
ROE	2.4%	2.1%	0.4%	1.5%	—
ROCE	2.5%	2.7%	0.4%	1.8%	—
Total Debt	₹26 Cr	₹30 Cr	₹40 Cr	₹49 Cr	+23.4%
Free Cash Flow	₹6 Cr	-₹1 Cr	-₹7 Cr	-₹2 Cr	—

🟢 Revenue has grown at 29.0% a year over 3 years.

🟢 EBITDA has grown at 10.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 69.6% to 43.9% over 3 years (-25.7 pts).

🟢 PAT (Net Profit) has grown at 2.1% a year over 3 years.

🟢 EPS has grown at 2.9% a year over 3 years.

🟡 ROE has held roughly flat at 1.5% over 3 years.

🟡 ROCE has held roughly flat at 1.8% over 3 years.

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

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹498 Cr

Total Liabilities

₹137 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.6%

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

1 positive5 general

Mukesh Babu Financial Services Ltd. Upper Circuit: Price and Key Data

Univest, 22 Sept

Mukesh Babu Financial Services Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 01 Sept

Mukesh Babu Financial Services closes trading window from Jul 1

scanx.trade, 23 Jun

Mukesh Babu Financial Services Ltd.

Stocktwits, 19 Aug

LKPSEC Stock Price and Chart — NSE:LKPSEC

TradingView, 17 Aug

Mukesh Babu Financial Services passes all AGM resolutions including dividend

scanx.trade, 13 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Revenue growth is negative (-42.9%) 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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Valuation

MiddlingGrowth · Profitability

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 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 ↑