Capital Trade Links Ltd Valuation Shifts to Fair Amid NBFC Sector Volatility

Valuation Metrics: From Expensive to Fair

Capital Trade Links Ltd currently trades at a price-to-earnings (P/E) ratio of 38.3, a significant moderation from previous levels that had placed it in the expensive category. The price-to-book value (P/BV) stands at 3.57, reflecting a more balanced valuation relative to its net asset base. These shifts have prompted a reclassification of the company’s valuation grade from expensive to fair as of 14 Jan 2026, according to the latest MarketsMOJO assessment.

Other valuation multiples include an enterprise value to EBIT (EV/EBIT) of 24.55 and an EV to EBITDA of 23.19, both indicating a premium but more reasonable stance compared to the sector’s high-flying peers. The EV to capital employed ratio is 1.92, while EV to sales is at 16.17, underscoring the company’s operational scale relative to its market valuation.

Peer Comparison Highlights

When compared with its NBFC peers, Capital Trade Links Ltd’s valuation appears more attractive. For instance, Mufin Green is classified as very expensive with a P/E of 110.82 and EV/EBITDA of 22.34, while Ashika Credit trades at a stratospheric P/E of 170.6 and EV/EBITDA of 95.39. Similarly, Saraswati Commercial Finance is also very expensive with a P/E of 63.07 and EV/EBITDA of 45.67.

On the other hand, companies like Satin Creditcare and SMC Global Securities are deemed attractive, with P/E ratios of 8.92 and 21.39 respectively, and EV/EBITDA multiples well below 10. Dolat Algotech also falls into the attractive category with a P/E of 11.42 and EV/EBITDA of 7.0. This positions Capital Trade Links Ltd in a middle ground — neither undervalued nor excessively expensive — but with a clear improvement in valuation perception.

Financial Performance and Quality Metrics

Capital Trade Links Ltd’s return on capital employed (ROCE) stands at 7.81%, while return on equity (ROE) is 9.33%. These figures, while modest, reflect a stable operational performance in a sector often challenged by asset quality and credit risks. The company currently does not offer a dividend yield, which may be a consideration for income-focused investors.

The PEG ratio is reported as zero, indicating either a lack of earnings growth projection or an anomaly in calculation, which warrants cautious interpretation. The company’s market capitalisation grade is rated 4, suggesting a mid-tier market cap status within its sector.

Price Movement and Market Returns

At the time of writing, Capital Trade Links Ltd is priced at ₹20.70, down marginally by 0.48% from the previous close of ₹20.80. The stock’s 52-week high is ₹32.24, while the low is ₹15.35, indicating a wide trading range over the past year. Today’s intraday range has been between ₹20.50 and ₹21.55, reflecting moderate volatility.

Examining returns relative to the benchmark Sensex reveals mixed performance. Over the past week, the stock declined by 1.24% while the Sensex gained 0.50%. The one-month return is sharply negative at -15.58%, contrasting with a modest Sensex gain of 0.79%. Year-to-date, the stock is down 12.88% versus a 1.16% decline in the Sensex.

However, longer-term returns tell a different story. Over one year, Capital Trade Links Ltd has delivered a 9.67% return, slightly below the Sensex’s 10.41%. Over three years, the stock outperformed marginally with a 39.86% gain compared to the Sensex’s 38.81%. The five-year return is strikingly strong at 780.85%, vastly outpacing the Sensex’s 63.46%. Conversely, the ten-year return is negative at -58.41%, while the Sensex soared 267.00% in the same period, highlighting significant volatility and cyclical challenges.

Implications for Investors

The recent shift in valuation from expensive to fair suggests that Capital Trade Links Ltd may be entering a more reasonable price territory, potentially offering a better risk-reward balance for investors. The company’s P/E and P/BV multiples, while still elevated relative to some peers, have moderated sufficiently to warrant renewed attention, especially given its solid five-year performance.

Nevertheless, the relatively modest ROCE and ROE, combined with the absence of dividend yield and recent short-term underperformance, indicate that investors should remain cautious. The NBFC sector continues to face headwinds from regulatory changes and credit quality concerns, which could impact future earnings and valuations.

Mojo Score and Analyst Ratings

Capital Trade Links Ltd’s MarketsMOJO score currently stands at 26.0, reflecting a strong sell recommendation. This is a downgrade from the previous sell rating, effective from 14 Jan 2026. The downgrade reflects concerns over valuation sustainability and operational risks despite the recent valuation moderation.

The market cap grade of 4 indicates a mid-sized company within the NBFC sector, which may limit liquidity and institutional interest compared to larger peers. Investors should weigh these factors alongside valuation improvements when considering exposure.

Historical Valuation Context

Historically, Capital Trade Links Ltd has traded at higher multiples during bullish phases, with P/E ratios exceeding 50 at times. The current P/E of 38.3, while still above the sector average, represents a meaningful contraction that aligns more closely with fair value territory. The P/BV multiple of 3.57 is also more moderate compared to peaks above 5 in prior years.

This re-rating may be driven by a combination of subdued earnings growth expectations and broader market caution towards NBFCs. The zero PEG ratio suggests limited earnings growth visibility, which could cap upside potential despite valuation relief.

Sector Outlook and Risks

The NBFC sector remains under pressure from tightening credit conditions, rising interest rates, and regulatory scrutiny. Asset quality concerns persist, particularly for smaller and mid-sized players. Capital Trade Links Ltd’s moderate ROCE and ROE reflect these challenges, and investors should monitor quarterly earnings and asset quality metrics closely.

Nonetheless, the company’s valuation reset to fair levels may provide a foundation for recovery if sector conditions improve or if the company can demonstrate stronger earnings growth and capital efficiency.

Conclusion

Capital Trade Links Ltd’s recent valuation shift from expensive to fair marks a significant development for investors seeking exposure to the NBFC sector. While the company’s multiples remain elevated relative to some peers, the moderation in P/E and P/BV ratios improves price attractiveness. However, the strong sell Mojo Grade and modest financial returns counsel caution.

Investors should consider the company’s valuation in the context of sector risks, historical volatility, and peer comparisons. Those with a higher risk appetite may find the current price levels an opportunity to accumulate selectively, while more conservative investors might prefer to await clearer signs of earnings momentum and asset quality improvement.

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