Haryana Capfin Ltd Valuation Shifts to Very Attractive Amid Mixed Market Returns

Valuation Metrics Signal Enhanced Price Attractiveness

Recent data reveals Haryana Capfin’s P/E ratio stands at 16.69, a level that now classifies the stock as very attractively valued compared to its historical and peer averages. This marks a significant improvement from previous assessments where the valuation was considered merely attractive. The price-to-book value ratio is even more compelling at 0.26, indicating the stock is trading well below its book value, a rare occurrence in the NBFC sector where P/BV ratios typically hover closer to or above 1.0 for financially stable companies.

Enterprise value (EV) multiples further corroborate this valuation shift. The EV to EBIT and EV to EBITDA ratios both stand at 12.67, while EV to sales is at 11.51, suggesting the market is pricing Haryana Capfin at a discount relative to its earnings and sales generation capacity. These multiples are notably lower than those of several peers, such as Mufin Green and Arman Financial, which are classified as very expensive with P/E ratios exceeding 60 and EV/EBITDA multiples above 9.9.

Comparative Peer Analysis Highlights Relative Value

When benchmarked against its peer group, Haryana Capfin’s valuation stands out. For instance, Satin Creditcare and SMC Global Securities, both rated as attractive, have P/E ratios of 8.72 and 19.81 respectively, with EV/EBITDA multiples significantly lower than Haryana Capfin’s. However, the latter’s very attractive valuation grade reflects a balance between price and underlying financial health, especially considering its return on capital employed (ROCE) and return on equity (ROE) metrics.

Haryana Capfin’s ROCE is currently 2.16%, and ROE is 1.53%, which are modest but positive, indicating some operational efficiency despite the subdued profitability. In contrast, some peers like LKP Finance and Avishkar Infra are loss-making, reflected in their risky valuation status and negative EV/EBITDA ratios. This positions Haryana Capfin as a comparatively safer investment within the NBFC space, albeit with caution warranted due to its low profitability ratios.

Stock Price and Market Capitalisation Context

The stock closed recently at ₹150.00, marginally down 0.46% from the previous close of ₹150.70. It has traded within a 52-week range of ₹137.00 to ₹232.95, indicating significant volatility over the past year. The current market cap grade is 4, reflecting a mid-sized capitalisation relative to the broader NBFC sector. Despite the recent price softness, the stock has demonstrated strong long-term returns, with a 10-year return of 767.05% compared to the Sensex’s 259.08% over the same period.

However, short-term performance has been less encouraging. Year-to-date, Haryana Capfin has declined by 11.22%, underperforming the Sensex’s modest 2.28% loss. Over the past year, the stock has fallen 11.76% while the Sensex gained 9.66%, highlighting sector-specific headwinds and company-specific challenges that have weighed on investor sentiment.

Rating Downgrade Reflects Caution Despite Valuation Appeal

MarketsMOJO recently downgraded Haryana Capfin’s mojo grade from Sell to Strong Sell on 15 Dec 2025, reflecting increased concerns about the company’s near-term prospects. The mojo score currently stands at 17.0, signalling significant caution. This downgrade is likely influenced by the company’s low profitability ratios, modest returns on equity and capital employed, and the challenging macroeconomic environment impacting NBFCs broadly.

While valuation metrics have improved, the fundamental quality grades and financial health indicators suggest investors should approach with prudence. The absence of dividend yield further limits the stock’s appeal for income-focused investors. Additionally, the PEG ratio is zero, indicating no expected earnings growth, which tempers enthusiasm despite the attractive price multiples.

Sector and Market Dynamics Influence Investment Outlook

The NBFC sector has faced headwinds from tightening credit conditions, regulatory scrutiny, and rising borrowing costs. Haryana Capfin’s valuation improvement may partly reflect market anticipation of a turnaround or a correction from previously stretched valuations. However, the company’s operational metrics and returns suggest that any recovery may be gradual.

Comparatively, peers such as Ashika Credit and Arman Financial remain very expensive, with P/E ratios of 170.14 and 63.02 respectively, indicating that Haryana Capfin’s valuation repositioning could attract value-oriented investors seeking exposure to the NBFC sector at a discount.

Long-Term Performance Remains a Bright Spot

Despite recent volatility and a challenging operating environment, Haryana Capfin’s long-term returns remain impressive. Over five years, the stock has delivered a staggering 395.05% return, vastly outperforming the Sensex’s 59.83% gain. Over a decade, the outperformance is even more pronounced, with a 767.05% return compared to the benchmark’s 259.08%.

This long-term track record underscores the company’s ability to generate shareholder value over extended periods, even if short-term fundamentals and market sentiment have been less favourable. Investors with a longer horizon may find the current valuation levels an opportune entry point, provided they are comfortable with the inherent risks in the NBFC sector.

Conclusion: Valuation Appeal Tempered by Fundamental Challenges

Haryana Capfin Ltd’s shift to a very attractive valuation grade, driven by low P/E and P/BV ratios, presents a compelling case for value investors seeking exposure to the NBFC sector at a discount. However, the company’s modest profitability, low returns on capital, and recent rating downgrade to Strong Sell by MarketsMOJO counsel caution.

Investors should weigh the attractive price multiples against the operational challenges and sector headwinds. While the stock’s long-term performance is encouraging, near-term risks remain elevated. A balanced approach, incorporating peer comparisons and broader market conditions, is advisable before committing capital.

Overall, Haryana Capfin’s valuation repositioning is a noteworthy development, but it is not a standalone signal to buy. Continuous monitoring of earnings growth, asset quality, and sector dynamics will be critical to realising potential gains from the current price levels.

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