SG Finserve Limited

Financial Services — Capital Markets · NSE

₹675.00−₹19.25 (−2.77%)

DalalBaazaar Score

74 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, 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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

SG Finserve Limited operates as a non-banking financial company in India. It offers dealer financing, retailer financing, logistics and transporter financing, and tailor-made term lending solutions, as well as vendor supplier financing for corporates.

IndustryCapital Markets

SectorFinancial Services

Employees76

Annual revenue₹330 Cr

How does it make money?

Turns over ₹330 Cr a year. Of every ₹100 of sales, about ₹39 reaches shareholders as profit, with ₹93 left at the operating level before interest, tax and depreciation. Each of its 76 employees supports ₹4.35 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.35 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 +728% while net margin moved -16% 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+728%

Margin effect-16%

DalalBaazaar Score

74/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.11 — 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

79/ 100

Good

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

Valuation

73/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

23.2x

1.3Y Median

30.6x

16 monthly readings · mean 33.0x · range 24.9x–50.7x

Sector Median

58.4x

median of 3 sector peers

🟢Current valuation is approximately 24% below its 1.3y median of 30.6x. 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 60% below the peer median of 58.4x.

vs. its own history

Cheap

30.6x median over 16 months · -24%

vs. sector peers

Cheap

58.4x median of 3 peers · -60%

vs. generic bands

Fair

15x–35x

EV/EBITDA

22.8x

PEG

0.26

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 3.2% to 8.7%.
Return on capital is rising
ROCE has improved from 5.7% to 19.7%.
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

3 items require attention · 3 watch

🟡Interest coverage is deterioratingFinancial
Cover has fallen from 4.9x to 2.3x.
🟡Margins are compressingFinancial
EBITDA margin is down 2.3 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 58% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 24% 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 60% 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 95.1% to 92.8%. 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 77% a year✓ 102.3% CAGR
Latest reported year was 101.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 91%✓ 92.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✓ 8.7%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 30.6x✓ 23.2x 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

4 good · 5 neutral · 2 weak

Market Cap

₹4,448 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.2x

Fair

Fairly valued against the generic band

P/B Ratio

3.02x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹29.1

Profitable

Profitable on a per-share basis

ROE

8.7%

Moderate

Moderate capital efficiency

ROCE

19.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.85x

High

High leverage

Revenue Growth (YoY)

101.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

119.3%

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

-₹1,573 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

92.3%

Good

Healthy core-business profitability

Net Margin

39.0%

Good

Strong bottom-line conversion

Current Ratio

1.35

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.11

Defensive

Steadier than the market

52W Range Position

87%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

644.4 / 661.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

64.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹40 Cr	₹186 Cr	₹167 Cr	₹330 Cr	+102.3%
EBITDA	₹38 Cr	₹169 Cr	₹147 Cr	₹307 Cr	+100.6%
EBITDA Margin	95.1%	91.2%	88.0%	92.8%	—
PAT (Net Profit)	₹18 Cr	₹79 Cr	₹81 Cr	₹128 Cr	+90.7%
EPS	₹5.05	₹15.31	₹13.45	₹22.41	+64.3%
ROE	3.2%	9.7%	8.0%	8.7%	—
ROCE	5.7%	20.4%	13.0%	19.7%	—
Total Debt	₹493 Cr	₹957 Cr	₹1,387 Cr	₹2,704 Cr	+76.4%
Free Cash Flow	-₹942 Cr	-₹630 Cr	-₹492 Cr	-₹1,573 Cr	—

🟢 Revenue has grown at 102.3% a year over 3 years.

🟢 EBITDA has grown at 100.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 95.1% to 92.8% over 3 years (-2.3 pts).

🟢 PAT (Net Profit) has grown at 90.7% a year over 3 years.

🟢 EPS has grown at 64.3% a year over 3 years.

🟢 ROE has risen from 3.2% to 8.7% over 3 years (+5.5 pts).

🟢 ROCE has risen from 5.7% to 19.7% over 3 years (+14.0 pts).

🔴 Total Debt has grown at 76.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,173 Cr

Total Liabilities

₹2,713 Cr

Cash & Equivalents

₹152 Cr

Operating Cash Flow

-₹1,571 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

1.7%

Insider Holding

72.2%

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

5 mixed1 general

SG Finserve (BSE:539199) - Stock Analysis

Simply Wall Street, 14 Oct

SG Finserve Share Price Update: Intraday Decline Deepens

Univest, 16 OctPrice 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.

SG Finserve releases audio link for Q2FY26 earnings call

scanx.trade, 16 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

SG Finserve expands digital and financial-services platform as board clears September results

Dalal Street Investment Journal, 16 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

SG Finserve Hits ₹4,551 Crore Loan Book with 82% Yearly Jump in Q1 FY27

Sahi, 01 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

SGFIN Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

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

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

1 of 5 tripwires tripped — Interest cover stays above 3x · see Key things to watch ↑