Finance - NBFC · Founded 2008 · www.sbfc.com · BSE 543959 · NSE SBFC · ISIN INE423Y01016
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Business
SBFC Finance Ltd. is a non-banking financial company (NBFC) based in India. Its core business involves providing secured credit to entrepreneurs and small and medium-sized enterprises (MSMEs). The company primarily focuses on two key segments: secured MSME loans and gold loans. It aims to cater to the credit needs of underserved or underbanked populations, offering loans typically against collateral such as property or gold. SBFC Finance generates its revenue primarily through the interest income earned on these loans, net of its cost of funds and operational expenses.
Revenue Mix
The company's primary business segments are:
Secured MSME Loans: This is the flagship segment, offering loans against property (LAP) to small business owners and entrepreneurs. These loans are collateralized by residential or commercial properties.
Gold Loans: SBFC Finance also provides loans against the pledge of gold jewelry, offering a quicker and more accessible form of credit.
While specific revenue contribution percentages are not publicly disclosed in detail, secured MSME loans form the significant majority of its asset under management (AUM), with gold loans complementing its product offering and providing diversification.
Industry
SBFC Finance operates in the highly competitive Indian NBFC sector, specifically within the MSME and gold loan financing segments. This industry is characterized by the presence of large banks, other established NBFCs, and smaller regional players. The demand for credit from MSMEs in India remains robust, often underserved by traditional banks due to stringent eligibility criteria or lack of flexibility. SBFC Finance positions itself as a customer-centric NBFC with a focus on comprehensive credit assessment and relationship-based lending, particularly targeting borrowers in Tier II and Tier III cities and towns who may have limited access to formal credit.
MOAT
SBFC Finance's competitive advantages are primarily derived from:
Niche Focus & Underwriting Expertise: Its specialized focus on secured MSME loans allows for deeper understanding of this borrower segment's needs and risks, enabling tailored product offerings and robust underwriting processes for a segment often overlooked by larger banks.
Extensive Branch Network: A growing network of branches, particularly in semi-urban and rural areas, provides last-mile connectivity and physical presence, crucial for sourcing customers and building relationships in its target demographic.
Agile Operational Model: As an NBFC, it typically possesses greater operational agility and quicker decision-making compared to traditional banks, facilitating faster loan disbursals and better customer service in its chosen segments.
Growth Drivers
Key factors that can drive SBFC Finance's growth over the next 3-5 years include:
Growth of Indian MSME Sector: The continued expansion and formalization of India's MSME sector will drive sustained demand for credit.
Credit Under-penetration: Significant unmet credit demand, especially in Tier II/III cities and among small businesses, provides a large addressable market.
Branch Network Expansion: Strategic expansion into new geographies and deeper penetration in existing markets.
Digital Adoption: Leveraging technology for lead generation, credit assessment, and operational efficiency can enhance reach and reduce costs.
Favorable Regulatory Environment: Policy support for MSMEs and financial inclusion initiatives can create tailwinds.
Risks
Asset Quality & Credit Risk: Deterioration in asset quality due to defaults from MSME borrowers or fluctuations in gold prices could impact profitability and capital.
Interest Rate Risk: Volatility in interest rates can affect the company's net interest margin (NIM) if the cost of funds rises disproportionately to lending rates.
Regulatory Changes: Adverse changes in RBI regulations for NBFCs (e.g., capital adequacy, provisioning norms) could impact operations and profitability.
Competition: Intense competition from other NBFCs and banks for both customers and funding sources can pressure margins and market share.
Economic Slowdown: A general economic downturn could reduce borrower repayment capacity, leading to higher non-performing assets (NPAs).
Funding Concentration Risk: Over-reliance on a few funding sources or inability to raise funds at competitive rates.
Management & Ownership
SBFC Finance is professionally managed, with an experienced team at the helm. Its significant shareholders include institutional investors such as Clermont Group and Arpwood Partners, who have played a crucial role in its growth journey. The company's ownership structure includes a mix of institutional backing and public shareholding following its initial public offering (IPO), indicating a commitment to corporate governance and professional management.
Outlook
SBFC Finance is well-positioned to capitalize on the ongoing demand for credit from India's vast and growing MSME sector, particularly in underserved geographies. Its focused approach to secured lending, coupled with an expanding branch network, provides a pathway for sustained asset growth. However, the company operates in a highly competitive and regulated environment, facing inherent risks related to asset quality, interest rate fluctuations, and regulatory changes. Maintaining prudent underwriting standards, managing cost of funds effectively, and adapting to technological advancements will be crucial for navigating these challenges and ensuring continued profitability and growth.
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| #(Fig in Cr.) | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 |
|---|---|---|---|---|---|---|---|---|
| Operating Revenue | 230 | 246 | 264 | 279 | 298 | 314 | 334 | 361 |
| Other Income | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 |
| Total Income | 230 | 247 | 264 | 280 | 298 | 315 | 334 | 361 |
| Total Expenditure | 75 | 83 | 90 | 90 | 94 | 100 | 105 | 113 |
| Operating Profit | 155 | 163 | 174 | 189 | 204 | 215 | 229 | 248 |
| Interest Expense | 89 | 89 | 85 | 88 | 95 | 100 | 106 | 118 |
| Depreciation | 3 | 3 | 3 | 4 | 4 | 4 | 5 | 5 |
| Profit Before Tax | 63 | 71 | 86 | 97 | 105 | 110 | 118 | 125 |
| Provision for Tax | 16 | 18 | 22 | 24 | 26 | 26 | 29 | 31 |
| Profit After Tax | 47 | 53 | 64 | 74 | 79 | 84 | 88 | 94 |
| Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit After Adjustments | 47 | 53 | 64 | 74 | 79 | 84 | 88 | 94 |
| Adjusted Earnings Per Share | 0.5 | 0.5 | 0.6 | 0.7 | 0.7 | 0.8 | 0.8 | 0.9 |
| #(Fig in Cr.) | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | TTM |
|---|---|---|---|---|---|
| Operating Revenue | 529 | 733 | 1019 | 1306 | 1307 |
| Other Income | 4 | 8 | 1 | 1 | 0 |
| Total Income | 533 | 740 | 1020 | 1307 | 1308 |
| Total Expenditure | 212 | 248 | 338 | 410 | 412 |
| Operating Profit | 321 | 492 | 682 | 896 | 896 |
| Interest Expense | 222 | 278 | 352 | 421 | 419 |
| Depreciation | 12 | 13 | 13 | 17 | 18 |
| Profit Before Tax | 87 | 201 | 316 | 459 | 458 |
| Provision for Tax | 22 | 52 | 79 | 113 | 112 |
| Profit After Tax | 65 | 150 | 237 | 345 | 345 |
| Adjustments | 0 | 0 | 0 | 0 | 0 |
| Profit After Adjustments | 65 | 150 | 237 | 345 | 345 |
| Adjusted Earnings Per Share | 0.8 | 1.7 | 2.2 | 3.2 | 3.2 |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Sales CAGR | 28% | 35% | 0% | 0% |
| Operating Profit CAGR | 31% | 41% | 0% | 0% |
| PAT CAGR | 46% | 74% | 0% | 0% |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Share Price CAGR | -20% | NA% | NA% | NA% |
| ROE Average | 12% | 11% | 9% | 9% |
| ROCE Average | 12% | 11% | 10% | 10% |
| #(Fig in Cr.) | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|---|
| Shareholder's Funds | 1287 | 1727 | 2778 | 3190 |
| Minority's Interest | 0 | 0 | 0 | 0 |
| Borrowings | 2940 | 3739 | 3996 | 5264 |
| Current Liability | 337 | 489 | 271 | 125 |
| Other Liabilities & Provisions | 20 | 13 | 221 | 137 |
| Total Liabilities | 4584 | 5968 | 7267 | 8717 |
| Loans | 2982 | 4415 | 3902 | 4990 |
| Investments | 249 | 275 | 207 | 22 |
| Fixed Assets | 299 | 296 | 300 | 308 |
| Other Loans | 3 | 3 | 210 | 125 |
| Other Non Current Assets | 0 | 1 | 155 | 35 |
| Current Assets | 1049 | 977 | 2492 | 3238 |
| Total Assets | 4584 | 5968 | 7267 | 8717 |
| #(Fig in Cr.) | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|---|
| Opening Cash & Cash Equivalents | 138 | 151 | 184 | 225 |
| Cash Flow from Operating Activities | -822 | -1245 | -1155 | -1415 |
| Cash Flow from Investing Activities | 652 | 206 | 159 | 174 |
| Cash Flow from Financing Activities | 183 | 1071 | 1037 | 1281 |
| Net Cash Inflow / Outflow | 13 | 32 | 41 | 40 |
| Closing Cash & Cash Equivalent | 151 | 184 | 225 | 265 |
| # | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|---|
| Earnings Per Share (Rs) | 0.8 | 1.68 | 2.21 | 3.18 |
| CEPS(Rs) | 0.95 | 1.83 | 2.34 | 3.34 |
| DPS(Rs) | 0 | 0 | 0 | 0 |
| Book NAV/Share(Rs) | 15.69 | 19.08 | 25.65 | 28.93 |
| Net Profit Margin | 12.2 | 20.43 | 23.28 | 26.44 |
| Operating Margin | 58.36 | 65.44 | 65.64 | 67.34 |
| PBT Margin | 16.39 | 27.48 | 31.04 | 35.12 |
| ROA(%) | 1.41 | 2.84 | 3.58 | 4.32 |
| ROE(%) | 5.1 | 10.11 | 10.67 | 11.73 |
| ROCE(%) | 7.3 | 9.89 | 10.93 | 11.55 |
| Price/Earnings(x) | 0 | 0 | 36.99 | 27.75 |
| Price/Book(x) | 0 | 0 | 3.19 | 3.05 |
| Dividend Yield(%) | 0 | 0 | 0 | 0 |
| EV/Net Sales(x) | 6.45 | 5.77 | 12.2 | 11.06 |
| EV/Core EBITDA(x) | 10.64 | 8.59 | 18.22 | 16.12 |
| Interest Earned Growth(%) | 0 | 38.51 | 39 | 28.23 |
| Net Profit Growth | 0 | 132.07 | 58.35 | 45.63 |
| EPS Growth(%) | 0 | 110.48 | 31.42 | 43.85 |
| Interest Coverage(x) % | 1.39 | 1.72 | 1.9 | 2.09 |
| # | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 63.73 | 60.66 | 55.19 | 55.05 | 54.75 | 53.33 | 53.19 | 52.98 | 52.82 | 52.35 |
| FII | 2.23 | 2.86 | 4.72 | 4.56 | 4.92 | 6.53 | 7.12 | 7.01 | 6.88 | 6.21 |
| DII | 11.94 | 13.52 | 16.24 | 16.26 | 16.46 | 17.66 | 17 | 18.2 | 19.53 | 21.97 |
| Public | 22.1 | 22.95 | 23.85 | 24.13 | 23.87 | 22.47 | 22.69 | 21.81 | 20.77 | 19.47 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| # | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 68.14 | 65.14 | 59.28 | 59.28 | 59.28 | 57.92 | 57.92 | 57.92 | 57.92 | 57.92 |
| FII | 2.38 | 3.07 | 5.07 | 4.91 | 5.32 | 7.09 | 7.76 | 7.66 | 7.54 | 6.88 |
| DII | 12.76 | 14.52 | 17.45 | 17.51 | 17.83 | 19.18 | 18.51 | 19.9 | 21.42 | 24.31 |
| Public | 23.63 | 24.64 | 25.62 | 25.98 | 25.84 | 24.4 | 24.7 | 23.84 | 22.77 | 21.54 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 106.91 | 107.38 | 107.42 | 107.68 | 108.27 | 108.6 | 108.88 | 109.32 | 109.65 | 110.64 |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Sales CAGR | +28% | +35% | — | — |
| Operating Profit CAGR | +31% | +41% | — | — |
| PAT CAGR | +46% | +74% | — | — |
| Share Price CAGR | -20% | — | — | — |
| ROE Average | +12% | +11% | +9% | +9% |
| ROCE Average | +12% | +11% | +10% | +10% |
| # | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 63.73 | 60.66 | 55.19 | 55.05 | 54.75 | 53.33 | 53.19 | 52.98 | 52.82 | 52.35 |
| FII | 2.23 | 2.86 | 4.72 | 4.56 | 4.92 | 6.53 | 7.12 | 7.01 | 6.88 | 6.21 |
| DII | 11.94 | 13.52 | 16.24 | 16.26 | 16.46 | 17.66 | 17 | 18.2 | 19.53 | 21.97 |
| Public | 36.27 | 39.34 | 44.81 | 44.95 | 45.25 | 46.67 | 46.81 | 47.02 | 47.18 | 47.65 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| # | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 68.14 | 65.14 | 59.28 | 59.28 | 59.28 | 57.92 | 57.92 | 57.92 | 57.92 | 57.92 |
| FII | 2.38 | 3.07 | 5.07 | 4.91 | 5.32 | 7.09 | 7.76 | 7.66 | 7.54 | 6.88 |
| DII | 12.76 | 14.52 | 17.45 | 17.51 | 17.83 | 19.18 | 18.51 | 19.9 | 21.42 | 24.31 |
| Public | 38.77 | 42.24 | 48.14 | 48.4 | 48.99 | 50.68 | 50.96 | 51.4 | 51.73 | 52.72 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 106.91 | 107.38 | 107.42 | 107.68 | 108.27 | 108.6 | 108.88 | 109.32 | 109.65 | 110.64 |
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