| Category | Parameter | Wt. | Score | Notes |
|---|---|---|---|---|
| Quality | Business Quality | 10.00% | 8 | 📌 Sharekhan, Feb 2026 One of India's largest and most diversified NBFCs — AUM spans mortgages, gold loans, consumer durables, commercial lending, and more. |
| Quality | Management Quality | 10.00% | 7 | 📌 Sharekhan, Feb 2026 Took proactive additional ECL provisions in Q3 FY26 ahead of stress materializing — a conservative, credible risk-management posture. |
| Quality | Growth Visibility | 10.00% | 7.5 | 📌 Sharekhan, Feb 2026 AUM/PAT CAGR guided at 23%/24% through FY28, though FY26 AUM growth guidance was trimmed to 22-23% due to SME segment slowdown. |
| Quality | Moat | 10.00% | 7 | 📌 Sharekhan, Feb 2026 Strong brand and distribution reach in consumer lending, though competitive intensity from banks and fintechs in unsecured lending is rising. |
| Quality | Capital Allocation | 6.67% | 7 | 📌 Sharekhan, Feb 2026 RoE of ~19-22% historically strong, though guided to moderate slightly to ~18.5% in FY26E before recovering to 21%+ by FY28E. |
| Quality | Balance Sheet | 6.67% | 6.5 | 📌 Sharekhan, Nov 2025 GS-3 (bad loans) rose to 1.24% with stress visible across segments, particularly two/three-wheeler and MSME books — a genuine watch item. |
| Quality | Risk Profile | 6.66% | 6 | 📌 Sharekhan, Nov 2025 Credit cost stayed elevated at 1.96% of AUM; captive two/three-wheeler loan books and MSME asset quality both showed visible stress in FY26. |
| Price | Valuation | 13.33% | 5 | 📌 Sharekhan, Feb 2026 PE of ~30-31x FY26E is a premium valuation reflecting the company's historically superior growth, though it prices in continued flawless execution. |
| Price | FCF Yield | 13.33% | 6 | 📌 Sharekhan, Feb 2026 RoA of ~3.8-4.0% is strong for an NBFC of this scale, translating to healthy underlying profitability despite near-term credit-cost pressure. |
| Price | Reverse DCF | 13.34% | 5.5 | 📌 Sharekhan, Feb 2026 Target price of ₹1,125 (Sharekhan) implies the market needs sustained 23%+ AUM growth and improving asset quality to justify current levels — a demanding combination. |
| Quality 60.00% / Price 40.00% | 6.45 | |||
| Trigger | Action |
|---|---|
| GS-3 asset quality ratio stabilizes or improves for 2+ consecutive quarters | Review |
| Valuation corrects toward ~24-25x PE while AUM growth holds at 20%+ | Add |
| Metric | Current | Historical | Source |
|---|---|---|---|
| PE (FY26E) | ~30-31x | 37.5x (FY25) | Sharekhan, Nov 2025 |
| RoE (FY26E) | ~18.5-19.2% | 22% (FY24) | Sharekhan, Feb 2026 |
| GS-3 (Bad Loans) | 1.24% | Rising trend | Sharekhan, Nov 2025 |
| Promoter Holdings | 54.7% | Stable | Sharekhan, Feb 2026 |
| Competitor | Segment | Threat |
|---|---|---|
| Bajaj Finserv (parent) | Financial Services | Low |
| HDB Financial Services / Cholamandalam Finance | NBFC (Consumer/Commercial Lending) | Medium |
| Banks (personal loan/credit card divisions) | Consumer Lending | High |