Smart Finsec Limited

Financial Services — Capital Markets · BSE

₹8.30+₹0.29 (+3.62%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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, 6:05 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 Smart Finsec Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Smart Finsec Limited, a non-banking finance company, engages in the investment of shares and securities, capital market, and real estate businesses in India. It operates through two segments; Real Estate and NBFC Activity.

IndustryCapital Markets

SectorFinancial Services

Employees4

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹96 reaches shareholders as profit, with ₹133 left at the operating level before interest, tax and depreciation. Each of its 4 employees supports ₹25.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin133.3%

Net margin96.0%

Revenue / employee₹25.4 lakh

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.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC LIFE INS CO LTDP/E 58.4x · ROE 11.3%

SBI LIFE INSURANCE CO LTDP/E 63.9x · ROE 13.7%

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%

ROE5.9%

Peer median ROE13.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -97% while net margin moved +1985% 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-97%

Margin effect+1985%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 67.9% a year
✗ Profit has declined at 11.6% a year

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

65/ 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

21.8x

3Y Median

21.1x

40 monthly readings · mean 22.4x · range 14.4x–37.4x

Sector Median

58.4x

median of 3 sector peers

🟡Currently trading close to its 3y median of 21.1x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 63% below the peer median of 58.4x.

vs. its own history

Fair

21.1x median over 40 months · +4%

vs. sector peers

Cheap

58.4x median of 3 peers · -63%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

21.8x

P/B

1.40x

EV/EBITDA

18.2x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 6.2% to 133.3% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 11.6% to 5.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 13.5% to 8.1% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 31% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.2% to 133.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 63% 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?

Returns on shareholder capital are falling
ROE has dropped from 11.6% to 5.9%. 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.
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 131%✓ 133.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ 5.9%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 21.1x✓ 21.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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
✓ 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

₹25 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.8x

Fair

Fairly valued against the generic band

P/B Ratio

1.40x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.38

Profitable

Profitable on a per-share basis

ROE

5.9%

Weak

Weak capital efficiency

ROCE

8.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

24.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

55.6%

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 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹8.3

Operating Margin

80.3%

Good

Healthy core-business profitability

Net Margin

54.1%

Good

Strong bottom-line conversion

Current Ratio

189.51

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.85

Market-like

Moves roughly in line with the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

8.0 / 8.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

50.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹31 Cr	₹24 Cr	₹1 Cr	₹1 Cr	-67.9%
EBITDA	₹2 Cr	₹3 Cr	₹2 Cr	₹1 Cr	-10.5%
EBITDA Margin	6.2%	12.8%	107.3%	133.3%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹1 Cr	₹1 Cr	-11.6%
EPS	₹0.47	₹0.79	₹0.39	₹0.33	-11.1%
ROE	11.6%	16.3%	7.5%	5.9%	—
ROCE	13.5%	21.3%	9.7%	8.1%	—
Free Cash Flow	-₹1 Cr	₹3 Cr	₹3 Cr	-₹1 Cr	—

🔴 Revenue has shrunk at 67.9% a year over 3 years.

🔴 EBITDA has shrunk at 10.5% a year over 3 years.

🟢 EBITDA Margin has risen from 6.2% to 133.3% over 3 years (+127.1 pts).

🔴 PAT (Net Profit) has shrunk at 11.6% a year over 3 years.

🔴 EPS has shrunk at 11.1% a year over 3 years.

🔴 ROE has fallen from 11.6% to 5.9% over 3 years (-5.8 pts).

🔴 ROCE has fallen from 13.5% to 8.1% over 3 years (-5.4 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹17 Cr

Total Liabilities

₹0 Cr

Total Debt

—

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.0%

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

6 general

Smart Finsec enters ₹15.60 crore loan deal with Bajaj Housing Finance

scanx.trade, 18 Oct

Top 65 Stocks Under 10 Rupees To Buy In October 2026 | High Potential Picks

Samco, 17 Oct

SOLLFEGE SMART ELECTRONICS LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 09 Oct

Varun Beverages Buys Kenyan Dairy Business for $32 Million to Enter East Africa

Whalesbook, 06 Jul

Smart Finsec Limited Share Price

Upstox, 25 Mar

Smart Finsec Ltd Share Price

Business Today, 31 Jan

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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong17/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate7.5/15

🟢ValuationAttractive10.6/15

🔴RiskHigh3.7/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

This thesis breaks if

✓EBITDA margin holds above 131%133.3%
✗Return on equity stays above 8%5.9%
✓Valuation vs its own median of 21.1x21.8x today