Dharani Finance Faces Evaluation Adjustment Amid Flat Performance and Valuation Concerns

Jul 31 2025 08:17 AM IST
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Dharani Finance, a microcap in the NBFC sector, has recently experienced a change in its evaluation, reflecting its financial metrics and market position. The company reported flat performance in Q4 FY24-25, raising concerns about its long-term strength, despite a notable increase in profits and returns over the past year.
Dharani Finance, a microcap player in the Non-Banking Financial Company (NBFC) sector, has recently undergone an adjustment in its evaluation. This revision reflects the company's underlying financial metrics and market position.

In the latest quarter, Q4 FY24-25, Dharani Finance reported flat financial performance, which has raised concerns regarding its long-term fundamental strength. The company has maintained an average Return on Equity (ROE) of 2.24%, indicating challenges in generating returns for shareholders. Additionally, net sales have shown modest growth at an annual rate of 7.86%, while operating profit has increased at a rate of 9.99%.

Despite these figures, the stock is perceived as having a very expensive valuation, with a Price to Book Value ratio of 0.5, suggesting it is trading at a premium compared to its peers. Over the past year, Dharani Finance has managed to generate a return of 21.05%, significantly outpacing the broader market, which has seen negative returns of -2.34%. However, the company's profits have surged by 114%, with a PEG ratio of 0, indicating a complex financial landscape.

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