SRG Housing Finance Ltd Valuation Turns Attractive Amid Mixed Market Returns

Valuation Metrics Signal Improved Price Attractiveness

SRG Housing Finance’s current P/E ratio stands at 14.61, a level that is considered attractive when compared to its historical averages and peer group. This marks a significant improvement from previous valuations that were deemed expensive. The price-to-book value ratio of 1.54 further supports this view, indicating that the stock is trading closer to its net asset value than before.

Other valuation multiples such as EV to EBIT (10.46) and EV to EBITDA (9.87) also reflect a more reasonable pricing relative to earnings and cash flow generation. The EV to capital employed ratio of 1.16 and EV to sales at 5.99 suggest that the market is valuing the company’s operational assets and revenue streams more favourably than in prior periods.

The PEG ratio of 1.40, which adjusts the P/E for earnings growth, remains moderate, implying that the stock’s price is aligned with its growth prospects. While dividend yield data is not available, the company’s return on capital employed (ROCE) and return on equity (ROE) at 10.32% and 10.54% respectively, indicate steady profitability and efficient capital utilisation.

Comparative Analysis with Industry Peers

When benchmarked against peers in the housing finance sector, SRG Housing Finance’s valuation appears more attractive than several competitors. For instance, GIC Housing Finance and Star Housing Finance are rated as very attractive with P/E ratios of 5.9 and 9.45 respectively, while others like India Home Loans, Sahara Housing, and Parshwanath Corporation are classified as very expensive, with P/E ratios soaring above 50.

Several companies in the sector, including Reliance Home Finance and Ind Bank Housing, are currently loss-making, rendering their valuation metrics less meaningful. In contrast, SRG Housing’s positive earnings and moderate multiples position it as a comparatively safer investment within the sector.

Stock Price Movement and Market Capitalisation

SRG Housing Finance’s stock price closed at ₹273.85 on 10 Feb 2026, up 2.14% from the previous close of ₹268.10. The stock traded within a range of ₹268.20 to ₹280.00 during the day, remaining below its 52-week high of ₹371.80 but above the 52-week low of ₹251.60. The company holds a market cap grade of 4, reflecting a mid-sized market capitalisation relative to its sector peers.

Despite the recent uptick, the stock has underperformed the Sensex over multiple time frames. Year-to-date, SRG Housing has declined by 7.53%, while the Sensex has gained 1.36%. Over the past year, the stock has fallen 14.69%, contrasting with the Sensex’s 7.97% rise. However, longer-term returns tell a more positive story, with SRG Housing delivering 44.47% over three years and 62.96% over five years, closely tracking the Sensex’s 38.25% and 63.78% gains respectively. Over a decade, the stock has outperformed the benchmark, returning 265.13% against the Sensex’s 249.97%.

Mojo Score and Rating Upgrade Reflect Changing Market Sentiment

SRG Housing Finance’s Mojo Score currently stands at 34.0, with a Mojo Grade of Sell. This represents an upgrade from a previous Strong Sell rating as of 9 Feb 2026. The improved grade reflects the company’s enhanced valuation attractiveness and stabilising fundamentals, although caution remains warranted given the broader sector challenges and recent price volatility.

The upgrade signals that while the stock is not yet a definitive buy, it has moved closer to a more favourable risk-reward profile. Investors should weigh this alongside the company’s operational metrics and sector outlook before making allocation decisions.

Sector Outlook and Risks

The housing finance sector continues to face headwinds from macroeconomic factors such as interest rate fluctuations, regulatory changes, and credit quality concerns. However, the sector’s long-term growth prospects remain intact, supported by rising urbanisation, affordable housing initiatives, and increasing demand for home loans.

SRG Housing Finance’s moderate ROCE and ROE figures suggest it is managing its capital efficiently, but investors should monitor asset quality trends and earnings consistency closely. The company’s valuation improvement may partly reflect market anticipation of stabilisation in these areas.

Investment Implications

For investors evaluating SRG Housing Finance Ltd, the recent valuation shift to a more attractive zone offers a compelling entry point relative to its historical multiples and sector peers. The stock’s moderate P/E and P/BV ratios, combined with steady returns on capital, suggest that the market is beginning to price in improved fundamentals and reduced risk.

However, the stock’s recent underperformance against the Sensex and the Sell rating from MarketsMOJO indicate that caution is still advised. Investors should consider the company’s earnings trajectory, sector dynamics, and broader economic conditions before committing capital.

Long-term investors with a focus on value may find SRG Housing Finance’s current pricing appealing, especially given its track record of outperforming the benchmark over five and ten years. Shorter-term traders might prefer to monitor momentum and news flow for clearer directional cues.

Conclusion

SRG Housing Finance Ltd’s transition from an expensive to an attractive valuation bracket marks a significant development for the stock. While the company faces sectoral and macroeconomic challenges, its improved price multiples and upgraded rating suggest a more balanced risk profile. Investors should integrate these valuation insights with fundamental analysis and market conditions to make informed decisions.

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