Inani Securities Ltd Valuation Shifts to Attractive Amid Market Downturn

Valuation Metrics Reflect Improved Price Attractiveness

As of 9 February 2026, Inani Securities trades at a P/E ratio of 21.82, a level that is considerably more appealing compared to many of its NBFC peers, some of whom are trading at stratospheric multiples. The company’s P/BV ratio stands at a notably low 0.51, indicating the stock is valued at just over half its book value. This contrasts sharply with sector heavyweights such as Colab Platforms and Meghna Infracon, which are classified as very expensive with P/E ratios of 790.72 and 133.3 respectively.

Enterprise value to EBITDA (EV/EBITDA) and EV to EBIT ratios for Inani Securities are negative at -1.43, reflecting current earnings challenges but also signalling potential undervaluation if profitability improves. The company’s return on capital employed (ROCE) remains negative at -5.14%, while return on equity (ROE) is modestly positive at 2.33%, underscoring ongoing operational hurdles.

Comparative Peer Analysis Highlights Relative Value

Within the NBFC sector, Inani Securities is rated as “attractive” on valuation grounds by MarketsMOJO, a notable upgrade from its previous “fair” rating. This upgrade was announced on 8 September 2025, reflecting a reassessment of the company’s price metrics relative to its earnings and book value. The company’s Mojo Score currently stands at 23.0 with a Mojo Grade of Strong Sell, downgraded from Sell, signalling caution on other fundamental and market factors despite valuation appeal.

Peers such as Vardhman Holdings and Jindal Poly Investments also fall into the attractive category, with P/E ratios of 4.4 and 4.84 respectively, but their EV/EBITDA multiples are substantially higher, indicating differing capital structures and profitability profiles. Meanwhile, 5Paisa Capital and Abans Financial are rated very attractive, with P/E ratios of 23.92 and 8.39, but their EV/EBITDA multiples are significantly lower, suggesting better earnings quality or growth prospects.

Price Performance and Market Context

Inani Securities’ share price closed at ₹21.92 on 9 February 2026, down 7.51% on the day, with a 52-week high of ₹35.43 and a low of ₹20.55. The stock has underperformed the broader Sensex index significantly over multiple time horizons. Year-to-date, the stock has declined 16.62%, compared to a Sensex fall of 1.92%. Over one year, the stock is down 26.93%, while the Sensex gained 7.07%. The three-year return is particularly stark, with Inani Securities down 37.90% versus a Sensex gain of 38.13%.

Despite this underperformance, the company’s ten-year return of 254.12% outpaces the Sensex’s 239.52%, indicating long-term value creation that has been eroded in recent years. The five-year return of 10.99% remains modest compared to the Sensex’s 64.75%, reflecting sectoral and company-specific challenges.

Financial Health and Profitability Concerns

While valuation metrics have improved, Inani Securities continues to face profitability pressures. Negative ROCE and low ROE suggest the company is yet to generate efficient returns on capital. The absence of dividend yield further highlights limited cash returns to shareholders. Negative EV/EBITDA ratios indicate losses or depressed earnings, which investors must weigh against the attractive price multiples.

These factors contribute to the company’s Mojo Grade of Strong Sell, despite the valuation upgrade. Investors should consider whether the current price discounts adequately compensate for operational risks and sector headwinds.

Sector and Market Implications

The NBFC sector has experienced volatility due to tightening credit conditions, regulatory scrutiny, and macroeconomic uncertainties. Inani Securities’ valuation attractiveness may reflect market scepticism about near-term earnings recovery. However, for value-oriented investors, the low P/BV and reasonable P/E ratios relative to peers could signal a buying opportunity if the company can stabilise its operations and improve profitability.

Investment Outlook and Considerations

Inani Securities’ shift to an attractive valuation grade suggests the market is pricing in potential recovery or at least a floor in downside risk. The P/E ratio of 21.82 is moderate for the NBFC sector, especially when contrasted with very expensive peers trading at multiples exceeding 100. The low P/BV ratio below 1.0 further supports the thesis that the stock is undervalued relative to its net asset base.

However, investors must remain cautious given the company’s negative ROCE and weak earnings quality. The downgrade to a Strong Sell Mojo Grade reflects concerns over fundamentals beyond valuation. The stock’s recent price weakness and underperformance relative to the Sensex highlight ongoing market scepticism.

For long-term investors with a higher risk tolerance, Inani Securities may represent a contrarian value play, particularly if operational improvements materialise. Monitoring quarterly earnings, asset quality trends, and capital adequacy will be critical to reassessing the investment case.

Conclusion

Inani Securities Ltd’s valuation parameters have improved significantly, moving from fair to attractive, driven by a P/E ratio of 21.82 and a P/BV of 0.51. This repositioning places the stock favourably against many NBFC peers, some of which remain very expensive or risky. Despite these valuation gains, the company’s fundamental challenges, including negative ROCE and modest ROE, alongside a Strong Sell Mojo Grade, counsel prudence.

Investors should weigh the potential for value recovery against the risks of continued earnings pressure and sector volatility. The stock’s long-term return profile remains positive, but recent underperformance and market sentiment suggest a cautious approach is warranted.

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