Veefin Solutions Limited

Technology — Software - Infrastructure · BSE

₹223.20−₹1.60 (−0.71%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, 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, 6:08 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 Veefin Solutions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Veefin Solutions Limited operates as a Software as a Service based digital lending and supply chain finance technology product solutions company.

IndustrySoftware - Infrastructure

SectorTechnology

Employees281

Annual revenue₹345 Cr

How does it make money?

Turns over ₹345 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 281 employees supports ₹1.23 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin23.7%

Net margin6.6%

Revenue / employee₹1.23 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 7.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE7.9%

ROE3.8%

Peer median ROE32.0%

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 +2352% while net margin moved -78% 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+2352%

Margin effect-78%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 3.8% is weak
✗ ROE has fallen by 5.9 points over the period

Quality vs. Valuation

Company Quality

51/ 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

26.6x

3Y Median

114.4x

40 monthly readings · mean 112.1x · range 25.3x–237.2x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 77% below its 3y median of 114.4x. 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 61% above the peer median of 16.5x.

vs. its own history

Cheap

114.4x median over 40 months · -77%

vs. sector peers

Expensive

16.5x median of 4 peers · +61%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.6x

P/B

0.93x

EV/EBITDA

8.0x

PEG

0.36

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Valuation below its historical average
At 26.6x the stock trades 77% below its own median of 114.4x.
Very low debt
Debt/Equity of 0.14x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 36.7% to 23.7% over 3 years.
Debt is rising
Total debt is up 11540% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 9.7% to 3.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 11.4% to 7.9% — often a sign of competition or overexpansion.
Short-term liquidity is tight
Current ratio of 0.97 — near-term obligations exceed near-term assets.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 11540% over 3 years, from ₹1 Cr to ₹101 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 13.0 points, from 36.7% to 23.7%.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 20% over 3 years — each existing share owns a smaller slice of the company.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.97 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 77% 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?

Margins are being competed away
EBITDA margin has fallen from 36.7% to 23.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
A premium to the sector to defend
It trades 61% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 9.7% to 3.8%. 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.
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 143% a year✓ 190.5% CAGR
Latest reported year was 107.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 23.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹110 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 7.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

5 good · 3 neutral · 3 weak

Market Cap

₹570 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.6x

Fair

Fairly valued against the generic band

P/B Ratio

0.93x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹8.38

Profitable

Profitable on a per-share basis

ROE

3.8%

Weak

Weak capital efficiency

ROCE

7.9%

Weak

Low return on total capital employed

Debt/Equity

0.14x

Low

Conservative leverage

Revenue Growth (YoY)

107.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

70.5%

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

-₹110 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹223.2

Operating Margin

14.5%

Average

Average margins

Net Margin

6.4%

Average

Average bottom-line conversion

Current Ratio

0.97

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

246.2 / 247.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

7.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹14 Cr	₹25 Cr	₹79 Cr	₹345 Cr	+190.5%
EBITDA	₹5 Cr	₹11 Cr	₹25 Cr	₹82 Cr	+151.1%
EBITDA Margin	36.7%	43.8%	31.9%	23.7%	—
PAT (Net Profit)	₹4 Cr	₹7 Cr	₹13 Cr	₹23 Cr	+74.7%
EPS	₹2.02	₹2.99	₹5.41	₹8.82	+63.5%
ROE	9.7%	6.0%	3.0%	3.8%	—
ROCE	11.4%	7.3%	4.4%	7.9%	—
Total Debt	₹1 Cr	₹5 Cr	₹13 Cr	₹101 Cr	+388.3%
Free Cash Flow	-₹25 Cr	-₹37 Cr	-₹94 Cr	-₹110 Cr	—

🟢 Revenue has grown at 190.5% a year over 3 years.

🟢 EBITDA has grown at 151.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 36.7% to 23.7% over 3 years (-13.0 pts).

🟢 PAT (Net Profit) has grown at 74.7% a year over 3 years.

🟢 EPS has grown at 63.5% a year over 3 years.

🔴 ROE has fallen from 9.7% to 3.8% over 3 years (-5.9 pts).

🔴 ROCE has fallen from 11.4% to 7.9% over 3 years (-3.5 pts).

🔴 Total Debt has grown at 388.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,005 Cr

Total Liabilities

₹286 Cr

Total Debt

₹101 Cr

Cash & Equivalents

₹15 Cr

Operating Cash Flow

₹77 Cr

Capex

-₹187 Cr

Shareholding (proxy)

Institutional Holding

1.3%

Insider Holding

35.0%

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

1 mixed5 general

Veefin Solutions Share Price rises 9.17%: stock analysis

Univest, 11 SeptPrice 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.

Veefin Solutions (BSE:543931) Stock Price

Simply Wall Street, 17 Aug

Veefin Solutions standalone PAT rises 151% YoY in Q1FY27 to ₹6.74 crore

scanx.trade, 12 Aug

Veefin Solutions begins process for migration to BSE mainboard, direct listing on NSE

Livemint, 10 Sept

Veefin Solutions receives in-principle approval for BSE Mainboard migration

scanx.trade, 21 Sept

VEEFIN Stock Price and Chart — BSE:VEEFIN

TradingView, 07 Jul

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak8.8/20

🟡Financial HealthAdequate10.5/20

🟡GrowthModest12.9/20

🔴ProfitabilityWeak5.8/15

🟢ValuationAttractive10.9/15

🔴RiskHigh4/10

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

This thesis breaks if

✓Revenue growth stays above 143% a year190.5% CAGR
✓EBITDA margin holds above 22%23.7%
✗Free cash flow remains positive-₹110 Cr
✓Debt / EBITDA stays below 2x1.2x
✗ROCE stays above 8%7.9%