SBFC Finance Limited

Financial Services — Credit Services · NSE

₹85.20−₹2.44 (−2.78%)

DalalBaazaar Score

77 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Reasonable but unspectacular business quality, 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, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

SBFC Finance Limited, a non-banking financial company, engages in fund-based financing activity in India.

IndustryCredit Services

SectorFinancial Services

Employees5,055

Annual revenue₹1,638 Cr

How does it make money?

Turns over ₹1,638 Cr a year. Of every ₹100 of sales, about ₹28 reaches shareholders as profit, with ₹51 left at the operating level before interest, tax and depreciation. Each of its 5,055 employees supports ₹32.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin50.7%

Net margin27.5%

Revenue / employee₹32.4 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.

ROCE8.1%

ROE12.1%

Peer median ROE16.5%

What is the outlook?

6 analysts covering the stock expect revenue to grow about 24.8% and earnings to grow about 23.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+24.8%

Est. earnings growth+23.4%

Analysts6

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 +157% while net margin moved +17% 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+157%

Margin effect+17%

DalalBaazaar Score

77/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.63 — 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

81/ 100

Excellent

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

Valuation

67/ 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

19.7x

3Y Median

38.4x

40 monthly readings · mean 42.0x · range 20.8x–64.0x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 49% below its 3y median of 38.4x. 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 16% above the peer median of 17.0x.

vs. its own history

Cheap

38.4x median over 40 months · -49%

vs. sector peers

Fair

17.0x median of 4 peers · +16%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

19.7x

P/B

2.53x

EV/EBITDA

19.4x

PEG

0.44

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 37.6% to 50.7% over 3 years.
Return on equity is rising
ROE has improved from 8.7% to 12.1%.
Return on capital is rising
ROCE has improved from 4.7% to 8.1%.
Valuation below its historical average
At 19.7x the stock trades 49% below its own median of 38.4x.
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?

Margin expansion has further to run
EBITDA margin has risen from 37.6% to 50.7%. 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 49% 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 28% a year✓ 37.0% CAGR
Latest reported year was 24.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 49%✓ 50.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 10%✓ 12.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 4x✓ 7.4x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 38.4x✓ 19.7x 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

3 good · 6 neutral · 2 weak

Market Cap

₹9,467 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.7x

Fair

Fairly valued against the generic band

P/B Ratio

2.53x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.33

Profitable

Profitable on a per-share basis

ROE

12.1%

Moderate

Moderate capital efficiency

ROCE

8.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.96x

High

High leverage

Revenue Growth (YoY)

24.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

28.6%

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

-₹1,907 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹85.2

P/E (Forward)

13.9x

Improving

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

Operating Margin

58.6%

Good

Healthy core-business profitability

Net Margin

44.9%

Good

Strong bottom-line conversion

Current Ratio

1.81

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.63

Defensive

Steadier than the market

52W Range Position

13%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

86.7 / 92.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹637 Cr	₹937 Cr	₹1,237 Cr	₹1,638 Cr	+37.0%
EBITDA	₹239 Cr	₹367 Cr	₹602 Cr	₹831 Cr	+51.4%
EBITDA Margin	37.6%	39.2%	48.6%	50.7%	—
PAT (Net Profit)	₹150 Cr	₹237 Cr	₹345 Cr	₹451 Cr	+44.4%
EPS	₹1.41	₹2.3	₹3.15	₹4.1	+42.8%
ROE	8.7%	8.5%	10.8%	12.1%	—
ROCE	4.7%	6.0%	7.8%	8.1%	—
Total Debt	₹3,739 Cr	₹3,996 Cr	₹5,264 Cr	₹7,162 Cr	+24.2%
Free Cash Flow	-₹1,253 Cr	-₹1,167 Cr	-₹1,427 Cr	-₹1,907 Cr	—

🟢 Revenue has grown at 37.0% a year over 3 years.

🟢 EBITDA has grown at 51.4% a year over 3 years.

🟢 EBITDA Margin has risen from 37.6% to 50.7% over 3 years (+13.1 pts).

🟢 PAT (Net Profit) has grown at 44.4% a year over 3 years.

🟢 EPS has grown at 42.8% a year over 3 years.

🟢 ROE has risen from 8.7% to 12.1% over 3 years (+3.4 pts).

🟢 ROCE has risen from 4.7% to 8.1% over 3 years (+3.3 pts).

🔴 Total Debt has grown at 24.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹11,085 Cr

Total Liabilities

₹7,360 Cr

Total Debt

₹7,162 Cr

Cash & Equivalents

₹481 Cr

Operating Cash Flow

-₹1,893 Cr

Capex

-₹15 Cr

Shareholding (proxy)

Institutional Holding

24.7%

Insider Holding

61.3%

Analyst Consensus

Recommendations

7 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹121.29

+42.4% vs CMP

Target Range

₹105 – ₹136

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

Compare with HINGIR RAMPU

Equitymaster, 16 Oct

SBFC Finance Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

If EPS Growth Is Important To You, SBFC Finance (NSE:SBFC) Presents An Opportunity

Simply Wall Street, 27 Aug

Earnings call transcript: SBFC Finance posts steady Q1 2026 growth, shares rise

Investing.com India, 25 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Volumes jump at SBFC Finance Ltd counter

Business Standard, 26 Aug

SBFC Finance Ltd (BOM:543959) Q1 2027 Earnings Call Highlights: Strong AUM Growth and ...

Yahoo Finance, 27 JulResults

🟡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

🟢Business QualityStrong17.5/20

🟢Financial HealthStrong17/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong11.4/15

🟢ValuationAttractive10.7/15

🟡RiskModerate5/10

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.

This thesis breaks if

✓Revenue growth stays above 28% a year37.0% CAGR
✓EBITDA margin holds above 49%50.7%
✓Return on equity stays above 10%12.1%
✓Interest cover stays above 4x7.4x
✓Valuation vs its own median of 38.4x19.7x today