Transwarranty Finance Limited

Financial Services — Mortgage Finance · NSE

₹12.48+₹0.89 (+7.68%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Transwarranty Finance Limited, a non-banking finance company, provides financial services in India.

IndustryMortgage Finance

SectorFinancial Services

Employees42

Annual revenue₹13 Cr

How does it make money?

Turns over ₹13 Cr a year. Of every ₹100 of sales, about ₹-26 reaches shareholders as profit, with ₹-31 left at the operating level before interest, tax and depreciation. Each of its 42 employees supports ₹30.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin-31.4%

Net margin-26.3%

Revenue / employee₹30.0 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.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

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.

ROCE-9.0%

ROE-11.6%

Peer median ROE16.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +34% while net margin moved -73% 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+34%

Margin effect-73%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✓ ROE has improved by 19.2 points over the period

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

29/ 100

Expensive

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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

2.44x

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -48.9% to -31.4% over 3 years.
Return on equity is rising
ROE has improved from -30.8% to -11.6%.
Return on capital is rising
ROCE has improved from -13.9% to -9.0%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -87.8x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 29% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -48.9% to -31.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 8% a year✓ 10.2% CAGR
Latest reported year was -22.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -33%✓ -31.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ -11.6%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 3x✗ -87.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

2 good · 4 neutral · 5 weak

Market Cap

₹69 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

2.44x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-0.67

Loss-making

Negative earnings per share — the business is losing money

ROE

-11.6%

Weak

Weak capital efficiency

ROCE

-9.0%

Weak

Low return on total capital employed

Debt/Equity

1.07x

Moderate

Moderate leverage

Revenue Growth (YoY)

-22.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

34.8%

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

₹15 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹12.48

Operating Margin

2.7%

Weak

Thin margins leave little room for error

Net Margin

-31.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.92

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

27%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

11.9 / 11.8

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

57.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹9 Cr	₹14 Cr	₹13 Cr	₹13 Cr	+10.2%
EBITDA	-₹5 Cr	₹1 Cr	-₹2 Cr	-₹4 Cr	—
EBITDA Margin	-48.9%	9.1%	-17.0%	-31.4%	—
PAT (Net Profit)	-₹9 Cr	₹1 Cr	-₹5 Cr	-₹3 Cr	—
EPS	₹-3.27	₹0.12	₹-1.04	₹-0.81	—
ROE	-30.8%	2.7%	-16.3%	-11.6%	—
ROCE	-13.9%	1.2%	-10.9%	-9.0%	—
Total Debt	₹40 Cr	₹38 Cr	₹41 Cr	₹31 Cr	-8.7%
Free Cash Flow	-₹12 Cr	-₹15 Cr	-₹5 Cr	₹15 Cr	—

🟢 Revenue has grown at 10.2% a year over 3 years.

🟢 EBITDA Margin has risen from -48.9% to -31.4% over 3 years (+17.4 pts).

🟢 ROE has risen from -30.8% to -11.6% over 3 years (+19.2 pts).

🟢 ROCE has risen from -13.9% to -9.0% over 3 years (+4.9 pts).

🟢 Total Debt has shrunk at 8.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹12 Cr to ₹15 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹64 Cr

Total Liabilities

₹35 Cr

Total Debt

₹31 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹15 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.6%

Corporate Actions

Ex-Dividend Date

04 Sept 2012

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

6 general

Transwarranty Finance (TFL.NS) Trades Flat at ₹11.63, Consolidating Between ₹11.05 and ₹12.21 - Weak Sell Signals

https://www.siam.in/, 30 Sept

Transwarranty Finance Share Price Outlook: Where It Could Be in 3 Years

Univest, 04 Aug

Transwarranty Finance board approves ₹10 crore unlisted NCD issuance

scanx.trade, 09 Oct

Transwarranty Finance Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Momentum Stocks: Igarashi Motors, Niraj Cement, Transwarranty Finance gain on sheer momentum

Moneycontrol.com, 17 Jun

Transwarranty Finance schedules 32nd AGM for September 30, 2026

scanx.trade, 04 Sept

Watch Items

Revenue growth is negative (-22.3%) 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.

DalalBaazaar Thesis

🔴Business QualityWeak8.5/20

🟢Financial HealthStrong17/20

🟡GrowthModest10.6/20

🔴ProfitabilityWeak5/15

🔴ValuationDemanding5.1/15

🔴RiskHigh4.4/10

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. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 8% a year10.2% CAGR
✓EBITDA margin holds above -33%-31.4%
✗Return on equity stays above 8%-11.6%
✗Interest cover stays above 3x-87.8x