Haryana Capfin Ltd Valuation Shifts to Very Attractive Amidst Market Challenges

Valuation Metrics Signal Improved Price Attractiveness

As of 3 February 2026, Haryana Capfin’s P/E ratio stands at 15.33, a level that is notably lower than many of its NBFC peers, some of which are trading at P/E multiples exceeding 100 or are loss-making. This P/E ratio reflects a more reasonable price relative to earnings, especially when contrasted with companies like Colab Platforms, which trades at an exorbitant P/E of 790.72, or Meghna Infracon at 132.83. The company’s price-to-book value ratio has also contracted to 0.25, indicating the stock is trading at just a quarter of its book value, a rare valuation level that suggests undervaluation by the market.

Other valuation multiples reinforce this narrative. Haryana Capfin’s enterprise value to EBITDA (EV/EBITDA) ratio is 11.56, which is moderate compared to the extremely high or negative multiples seen in several peers. The EV to capital employed ratio also sits at 0.25, underscoring the stock’s discounted valuation relative to the capital it employs in its operations.

Financial Performance and Returns: A Mixed Picture

While valuation metrics have improved, the company’s return ratios remain subdued. The latest return on capital employed (ROCE) is 2.16%, and return on equity (ROE) is 1.63%, both figures that fall short of industry averages and suggest operational challenges or capital inefficiencies. These low returns may partly explain the market’s cautious stance despite the attractive valuation.

Examining stock price performance relative to the broader market, Haryana Capfin has underperformed the Sensex over multiple time horizons. Year-to-date, the stock has declined by 13.23%, while the Sensex gained 4.17%. Over the past year, the stock’s return was a negative 26.70%, contrasting with the Sensex’s positive 5.37%. However, over longer periods, the stock has delivered impressive gains, with a 3-year return of 157.42% and a 5-year return of 343.57%, significantly outpacing the Sensex’s respective 36.26% and 64.00% returns. This long-term outperformance highlights the company’s potential for value investors willing to look beyond short-term volatility.

Market Capitalisation and Analyst Ratings

Haryana Capfin’s market capitalisation grade is rated 4, indicating a mid-sized company within the NBFC sector. The company’s overall Mojo Score has deteriorated to 26.0, resulting in a Strong Sell grade as of 15 December 2025, downgraded from a previous Sell rating. This downgrade reflects concerns over the company’s operational performance and market sentiment despite the improved valuation metrics.

Comparative Valuation: Haryana Capfin vs Peers

When compared with its peer group within the NBFC sector, Haryana Capfin’s valuation stands out as very attractive. Several competitors are trading at steep premiums or are loss-making, which inflates their valuation multiples. For instance, LKP Finance and Avishkar Infra are currently loss-making, rendering their P/E ratios non-applicable or negative. Others like Arunis Abode and Corporate Merch are classified as very expensive, with P/E ratios above 200 and EV/EBITDA multiples in the hundreds.

In contrast, Haryana Capfin’s P/E of 15.33 and EV/EBITDA of 11.56 suggest a more reasonable valuation, especially given the company’s positive earnings and stable capital structure. This valuation gap may reflect market concerns about growth prospects or asset quality, but it also signals a potential opportunity for value-oriented investors.

Price Movement and Trading Range

On 3 February 2026, Haryana Capfin’s stock closed at ₹146.60, down 2.07% from the previous close of ₹149.70. The day’s trading range was between ₹146.60 and ₹169.95, with the 52-week high at ₹232.95 and the 52-week low at ₹144.50. The proximity to the 52-week low underscores the recent price weakness, yet the valuation metrics suggest the stock may be undervalued at current levels.

Investment Outlook and Risks

Despite the very attractive valuation, investors should weigh the risks associated with Haryana Capfin. The company’s low ROCE and ROE indicate operational inefficiencies or subdued profitability. The Strong Sell Mojo Grade reflects these concerns and the potential for further downside if earnings do not improve or if macroeconomic headwinds persist.

However, the stock’s long-term return history demonstrates resilience and the capacity for substantial gains over extended periods. For investors with a higher risk tolerance and a focus on value investing, Haryana Capfin’s current valuation presents an intriguing entry point, especially if operational improvements materialise.

Conclusion: Valuation Opportunity Amid Operational Challenges

Haryana Capfin Ltd’s shift to a very attractive valuation grade marks a notable development for investors seeking value in the NBFC sector. The company’s P/E and P/BV ratios are compelling relative to peers and historical levels, signalling potential upside if operational metrics improve. However, the current Strong Sell rating and weak return ratios caution investors to remain vigilant about underlying business risks.

For those willing to navigate the risks, Haryana Capfin offers a valuation entry point that could reward patient investors over the medium to long term. Monitoring earnings trends, asset quality, and sector dynamics will be critical to assessing whether the stock can sustain a recovery in price and fundamentals.

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