Star Housing Finance Limited

Financial Services — Mortgage Finance · BSE

₹4.17+₹0.19 (+4.77%)

DalalBaazaar Score

70 / 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, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Star Housing Finance Limited provides housing and non-housing loans for individuals, corporates, and developers in India.

IndustryMortgage Finance

SectorFinancial Services

Employees266

Annual revenue₹79 Cr

How does it make money?

Turns over ₹79 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 266 employees supports ₹29.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹29.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC BANK LTD, ICICI BANK LTD., STATE BANK OF INDIA. 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?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +378% while net margin moved +273% 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+378%

Margin effect+273%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.97 — moves roughly with the market
✗ 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

71/ 100

Good

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

Valuation

77/ 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

5.0x

4Y Median

43.0x

52 monthly readings · mean 137.8x · range 2.6x–603.6x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 88% below its 4y median of 43.0x. 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 71% below the peer median of 17.0x.

vs. its own history

Cheap

43.0x median over 52 months · -88%

vs. sector peers

Cheap

17.0x median of 4 peers · -71%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

37.6x

PEG

0.03

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 1.0% to 7.7%.
Return on capital is rising
ROCE has improved from 1.1% to 3.2%.
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 9.6 points, from 21.5% to 11.8%.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 88% 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 71% 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 21.5% to 11.8%. 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 51% a year✓ 68.4% CAGR
Latest reported year was 9.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 11.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 7.7%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 43.0x✓ 5.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

5 / 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 · 2 neutral · 5 weak

Market Cap

₹33 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.0x

Cheap

Cheap against the generic band

P/B Ratio

0.22x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.84

Profitable

Profitable on a per-share basis

ROE

7.7%

Weak

Weak capital efficiency

ROCE

3.2%

Weak

Low return on total capital employed

Debt/Equity

2.67x

High

High leverage

Revenue Growth (YoY)

9.2%

Modest

Modest growth

Profit Growth (YoY)

-76.1%

Falling

Profits are shrinking

Dividend Yield

2.40%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹65 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

6.8%

Average

Average margins

Net Margin

15.7%

Good

Strong bottom-line conversion

Current Ratio

1.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.97

Market-like

Moves roughly in line with the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

4.2 / 4.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹17 Cr	₹32 Cr	₹54 Cr	₹79 Cr	+68.4%
EBITDA	₹4 Cr	₹7 Cr	₹11 Cr	₹9 Cr	+38.1%
EBITDA Margin	21.5%	22.5%	20.9%	11.8%	—
PAT (Net Profit)	₹1 Cr	₹7 Cr	₹9 Cr	₹11 Cr	+161.3%
EPS	₹0.1	₹0.93	₹1.11	₹1.4	+141.0%
ROE	1.0%	6.6%	6.7%	7.7%	—
ROCE	1.1%	3.6%	3.0%	3.2%	—
Total Debt	₹78 Cr	₹162 Cr	₹320 Cr	₹404 Cr	+72.6%
Free Cash Flow	-₹7 Cr	-₹113 Cr	-₹131 Cr	-₹65 Cr	—

🟢 Revenue has grown at 68.4% a year over 3 years.

🟢 EBITDA has grown at 38.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 21.5% to 11.8% over 3 years (-9.6 pts).

🟢 PAT (Net Profit) has grown at 161.3% a year over 3 years.

🟢 EPS has grown at 141.0% a year over 3 years.

🟢 ROE has risen from 1.0% to 7.7% over 3 years (+6.7 pts).

🟢 ROCE has risen from 1.1% to 3.2% over 3 years (+2.0 pts).

🔴 Total Debt has grown at 72.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹555 Cr

Total Liabilities

₹411 Cr

Cash & Equivalents

₹84 Cr

Operating Cash Flow

-₹65 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

42.4%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

19 Sept 2025

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%
STATE BANK OF INDIA	10.3x	15.2%

Recent News

1 negative5 general

Star Housing Finance Seeks RBI Approval for Additional Non-Executive Directors

scanx.trade, 11 Oct

Star Housing Finance Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 27 Aug

NHB classifies Star Housing Finance account as fraud after audits flag phantom loans

Livemint, 27 AugRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Star Housing Finance Ltd is Rated Strong Sell

MarketsMojo, 07 Oct

Star Housing Finance Ltd. Peer Comparison – Compare with Others

Value Research, 03 Sept

Star Housing Finance Limited Completes Divestment of 21,82,200 Shares in Akme Fintrade India Limited

scanx.trade, 01 Apr

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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 · Growth · Valuation

MiddlingBusiness Quality · Profitability

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 high-severity red flag sits above this conclusion and should be read first.

1 of 4 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑