Current Valuation Metrics and Financial Health
Inditrade Capital’s valuation grade improvement to “fair” as of 4 December 2025 marks a notable change from its previous “risky” status. However, the company’s key financial ratios paint a complex picture. The price-to-earnings (PE) ratio stands at a negative value, reflecting losses rather than profits, while the price-to-book (P/B) ratio is extremely low at 0.16, suggesting the stock is trading well below its book value. This could indicate undervaluation, but it also raises concerns about asset quality and future earnings potential.
Enterprise value (EV) multiples such as EV to EBIT and EV to EBITDA are negative, signalling operational losses. Meanwhile, EV to capital employed is modest at 0.74, and EV to sales is 3.16, which is relatively moderate for a non-banking financial company (NBFC). The absence of dividend yield further reflects the company’s current inability to return cash to shareholders.
More troubling are the profitability metrics: the latest return on capital employed (ROCE) is deeply negative at -47.86%, and return on equity (ROE) is even more concerning at -96.06%. These figures highlight significant operational challenges and weak capital efficiency, which weigh heavily on valuation considerations.
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Peer Comparison Highlights
When compared with peers in the NBFC sector, Inditrade Capital’s valuation stands out as “fair,” while many competitors are classified as “expensive” or “very expensive.” For instance, Bajaj Finance and Bajaj Finserv trade at significantly higher PE and EV/EBITDA multiples, reflecting strong market confidence and robust earnings growth. Similarly, insurance companies like SBI Life and HDFC Life are valued at premium multiples, supported by consistent profitability and growth prospects.
In contrast, Inditrade’s negative earnings and weak returns place it at a disadvantage, despite its lower valuation multiples. This suggests that the market is pricing in considerable risk, which is consistent with the company’s financial performance and stock price history.
Stock Price Performance and Market Sentiment
Inditrade Capital’s stock price has been under significant pressure over recent years. The current price is ₹4.87, close to its 52-week low of ₹4.61, and far below its 52-week high of ₹13.36. Year-to-date, the stock has declined by approximately 54.7%, while the Sensex has gained over 9%. Over longer horizons, the stock has underperformed dramatically, with losses exceeding 80% over five and ten years, compared to substantial gains in the broader market.
This sustained underperformance reflects persistent operational and market challenges, which have eroded investor confidence. The recent downgrade in valuation risk to “fair” may indicate some stabilisation, but the stock remains a high-risk proposition.
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Is Inditrade Capital Undervalued or Overvalued?
Given the data, Inditrade Capital appears undervalued on a purely price-to-book basis and relative to its peers’ lofty multiples. The low valuation multiples suggest the market is pricing in significant downside risk, which is justified by the company’s negative profitability and poor returns on capital. The “fair” valuation grade reflects a cautious optimism that the worst may be behind the company, but it does not imply a strong buy signal.
Investors should weigh the potential for a turnaround against the risks of continued losses and weak financial health. The stock’s depressed price offers a margin of safety, but the absence of earnings growth and negative returns on equity and capital employed are red flags. Until Inditrade demonstrates consistent profitability and operational improvement, it is unlikely to command a premium valuation.
In summary, Inditrade Capital is undervalued in terms of market price relative to book value and earnings multiples, but this undervaluation is a reflection of fundamental weaknesses rather than an overlooked opportunity. Caution and thorough due diligence are advised before considering exposure to this NBFC.
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