VLS Finance Limited

Financial Services — Capital Markets · NSE

₹220.99−₹1.44 (−0.65%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

CAUTION

Risk

Moderate

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, 6:07 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 VLS Finance Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

VLS Finance Limited, together with its subsidiaries, provides stock broking services in India. The company is also involved in the investment and sale/purchase of shares/securities and derivatives.

IndustryCapital Markets

SectorFinancial Services

Employees36

Annual revenue₹28 Cr

How does it make money?

Turns over ₹28 Cr a year. Of every ₹100 of sales, about ₹77 reaches shareholders as profit, with ₹90 left at the operating level before interest, tax and depreciation. Each of its 36 employees supports ₹78.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin90.3%

Net margin76.9%

Revenue / employee₹78.5 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.

ROCE1.0%

ROE1.0%

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 -65% while net margin moved +11% 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-65%

Margin effect+11%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 29.5% a year
✗ Profit has declined at 27.0% a year

Quality vs. Valuation

Company Quality

59/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.1x

3Y Median

16.5x

40 monthly readings · mean 15.1x · range 2.2x–37.4x

Sector Median

58.4x

median of 3 sector peers

🟢Current valuation is approximately 14% below its 3y median of 16.5x. 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 76% below the peer median of 58.4x.

vs. its own history

Fair

16.5x median over 40 months · -14%

vs. sector peers

Cheap

58.4x median of 3 peers · -76%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

14.1x

P/B

0.35x

EV/EBITDA

24.4x

PEG

0.31

Dividend Yield

0.68%

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 77.5% to 90.3% over 3 years.
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 watch

🟡Profit is decliningFinancial
Net profit is down 61% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 77.5% to 90.3%. 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 76% 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?

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

1EBITDA margin holds above 88%✓ 90.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ 1.0%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 16.5x✓ 14.1x 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

6 good · 2 neutral · 3 weak

Market Cap

₹693 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.1x

Cheap

Cheap against the generic band

P/B Ratio

0.35x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹15.65

Profitable

Profitable on a per-share basis

ROE

1.0%

Weak

Weak capital efficiency

ROCE

1.0%

Weak

Low return on total capital employed

Debt/Equity

0.01x

Low

Conservative leverage

Revenue Growth (YoY)

24.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

46.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.68%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹18 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹220.99

Operating Margin

95.3%

Good

Healthy core-business profitability

Net Margin

64.1%

Good

Strong bottom-line conversion

Current Ratio

4.30

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

231.1 / 242.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

18.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹81 Cr	₹378 Cr	₹72 Cr	₹28 Cr	-29.5%
EBITDA	₹62 Cr	₹389 Cr	₹63 Cr	₹26 Cr	-25.8%
EBITDA Margin	77.5%	102.8%	87.5%	90.3%	—
PAT (Net Profit)	₹56 Cr	₹324 Cr	₹46 Cr	₹22 Cr	-27.0%
EPS	₹14.49	₹93.07	₹13.44	₹6.5	-23.4%
ROE	2.2%	10.9%	1.9%	1.0%	—
ROCE	1.9%	10.9%	2.2%	1.0%	—
Total Debt	₹1 Cr	₹0 Cr	₹1 Cr	₹0 Cr	-35.5%
Free Cash Flow	₹5 Cr	₹153 Cr	₹170 Cr	-₹18 Cr	—

🔴 Revenue has shrunk at 29.5% a year over 3 years.

🔴 EBITDA has shrunk at 25.8% a year over 3 years.

🟢 EBITDA Margin has risen from 77.5% to 90.3% over 3 years (+12.8 pts).

🔴 PAT (Net Profit) has shrunk at 27.0% a year over 3 years.

🔴 EPS has shrunk at 23.4% a year over 3 years.

🔴 ROE has fallen from 2.2% to 1.0% over 3 years (-1.2 pts).

🟡 ROCE has held roughly flat at 1.0% over 3 years.

🟢 Total Debt has shrunk at 35.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹5 Cr to -₹18 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,205 Cr

Total Liabilities

₹92 Cr

Total Debt

₹0 Cr

Cash & Equivalents

₹70 Cr

Operating Cash Flow

-₹18 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.2%

Insider Holding

66.6%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

18 Sept 2026

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

3 mixed3 general

VLS Finance Share Price Target 2026: Rs 315 Analyst Forecast

Univest, 26 JunAnalyst view

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

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

Value Research, 29 Aug

VLS Finance share price soars 12% on bourses; here's what is fuelling rally

Business Standard, 17 DecPrice 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.

VLS Finance Approves Standalone And Consolidated Q1 Financial Results

Sahi, 11 AugResults

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

VLS Finance promoter group reports no share encumbrance in FY26

scanx.trade, 15 Jun

VLS Finance Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

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.
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 QualityStrong15.9/20

🟢Financial HealthStrong17/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate8.9/15

🟢ValuationAttractive11.8/15

🔴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.

This thesis breaks if

✓EBITDA margin holds above 88%90.3%
✗Return on equity stays above 8%1.0%
✓Valuation vs its own median of 16.5x14.1x today