Goenka Business & Finance Ltd Valuation Shifts Signal Renewed Price Attractiveness

Valuation Metrics: A Marked Improvement

As of 12 Feb 2026, Goenka Business & Finance Ltd trades at a price-to-earnings (P/E) ratio of 29.00, a substantial moderation from levels that once branded it as very expensive relative to its peers. The price-to-book value (P/BV) stands at a notably low 0.45, indicating the stock is trading at less than half its book value, a rare occurrence in the NBFC space where valuations often command premiums due to asset quality and growth prospects.

Enterprise value multiples further reinforce this valuation attractiveness. The EV to EBIT and EV to EBITDA ratios are both at 0.67, signalling that the company’s earnings before interest and taxes, as well as earnings before interest, taxes, depreciation and amortisation, are being valued conservatively by the market. Additionally, the EV to capital employed ratio is 0.45, and EV to sales is a mere 0.10, underscoring the undervaluation relative to the company’s asset base and revenue generation.

The PEG ratio, which adjusts the P/E for earnings growth, is at 1.19, suggesting that the stock’s price is reasonably aligned with its growth prospects, a positive sign for value-oriented investors.

Comparative Analysis Within the NBFC Sector

When benchmarked against key peers, Goenka Business & Finance Ltd’s valuation stands out as particularly attractive. For instance, Mufin Green, a fellow NBFC, is classified as very expensive with a P/E of 110.82 and an EV to EBITDA of 22.34. Similarly, Ashika Credit trades at an exorbitant P/E of 170.6 and EV to EBITDA of 95.39, reflecting market exuberance or expectations of high growth that may not be sustainable.

Other peers such as Satin Creditcare and Dolat Algotech also trade at lower P/E ratios of 8.92 and 11.42 respectively, but their EV to EBITDA multiples remain significantly higher than Goenka’s, at 6.08 and 7.00. This disparity highlights Goenka’s current undervaluation relative to its earnings and cash flow generation capacity.

Notably, some companies like Arman Financial and LKP Finance are loss-making, which justifies their exclusion from direct valuation comparisons. Goenka’s positive earnings and strong return on capital employed (ROCE) of 44.48% further differentiate it as a fundamentally sound entity.

Price Performance and Market Capitalisation Context

Goenka Business & Finance Ltd’s current market price stands at ₹10.26, up from the previous close of ₹9.05, marking a robust day change of 13.37%. The stock has traded within a 52-week range of ₹6.06 to ₹13.66, indicating significant volatility but also substantial upside potential from recent lows.

Over the short term, the stock has outperformed the broader market benchmark, the Sensex. It has delivered a one-week return of 24.36% compared to Sensex’s modest 0.50%, and a one-month return of 33.07% versus Sensex’s 0.79%. Year-to-date, Goenka has surged 34.29%, while the Sensex has declined by 1.16%, highlighting the stock’s strong momentum.

However, longer-term returns paint a more nuanced picture. Over one year, the stock has declined by 23.43%, contrasting with the Sensex’s 10.41% gain. Over three years, Goenka’s return of 28.41% trails the Sensex’s 38.81%, and over five years, the stock has delivered an impressive 297.67% return, significantly outperforming the Sensex’s 63.46%. The ten-year return is negative at -92.05%, reflecting past challenges and volatility in the company’s performance and valuation.

Financial Quality and Operational Efficiency

Goenka’s latest return on equity (ROE) is modest at 1.56%, which may raise concerns about profitability relative to shareholder equity. However, the company’s return on capital employed (ROCE) is a robust 44.48%, indicating efficient utilisation of capital to generate earnings before interest and taxes. This disparity suggests that while equity returns are subdued, the company is effective in deploying its capital base.

The company’s dividend yield is not available, which may reflect a focus on reinvestment or capital conservation amid growth or restructuring phases.

Mojo Score and Rating Update

MarketsMOJO assigns Goenka Business & Finance Ltd a Mojo Score of 46.0, with a current Mojo Grade of Sell. This represents an upgrade from a previous Strong Sell rating as of 21 Apr 2025, signalling an improvement in the company’s fundamentals and market perception. The market cap grade is 4, indicating a mid-tier capitalisation within the NBFC sector.

The upgrade in rating aligns with the valuation shift from very expensive to attractive, reflecting a more favourable risk-reward profile for investors willing to consider the stock at current levels.

Investment Considerations and Outlook

Goenka Business & Finance Ltd’s recent valuation realignment offers an attractive entry point for investors seeking exposure to the NBFC sector at a discount to book value and earnings multiples. The company’s strong ROCE and improving market sentiment, as reflected in the Mojo Grade upgrade, provide a foundation for potential recovery and value realisation.

Nevertheless, investors should weigh the modest ROE and the stock’s historical volatility, including a significant negative return over the past decade. The NBFC sector remains sensitive to credit cycles and regulatory changes, which could impact Goenka’s earnings trajectory.

Comparative valuation analysis suggests that while Goenka is attractively priced relative to many peers, some companies in the sector offer lower P/E ratios but trade at higher EV multiples, indicating differing market expectations on growth and risk.

In summary, Goenka Business & Finance Ltd’s valuation shift from very expensive to attractive, combined with improving fundamentals and positive short-term price momentum, merits close attention from value-focused investors. A cautious approach with monitoring of operational performance and sector dynamics is advisable.

Summary of Key Metrics:

• P/E Ratio: 29.00
• Price to Book Value: 0.45
• EV to EBIT / EBITDA: 0.67 / 0.67
• PEG Ratio: 1.19
• ROCE: 44.48%
• ROE: 1.56%
• Mojo Score: 46.0 (Sell, upgraded from Strong Sell)
• Market Cap Grade: 4
• Current Price: ₹10.26 (13.37% up on day)

Investors should continue to monitor quarterly earnings, asset quality trends, and sector developments to validate the sustainability of this valuation improvement.

Unlock special upgrade rates for a limited period. Start Saving Now →