ESAF Small Fin (ESAFSFB)
TurnaroundFairStock Score: 13/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹38.62 |
| Market Cap | ₹1,992.86 Cr |
| P/E Ratio | 0 |
| ROCE | 4.28% |
| ROE | -15.99% |
| Dividend Yield | 0% |
| Profit Growth | 103.38% |
| Debt/Equity | — |
| Sales Growth | 74.2% |
| Promoter Holding | 63.3% |
| 52-Week Range | ₹19.78 — ₹45 |
| Sector | Banks |
| Book Value | ₹34.65 |
Strengths
- Trading at a significant discount to book value (P/B 0.53) offers a potential margin of safety.
- Promoter holding of 63.3% signals strong insider ownership and aligned interests.
- Latest quarter turned positive with net profit of ₹7 crore, showing early signs of stabilization.
- Piotroski F-score of 6/9 suggests some fundamental improvement across key financial metrics.
Concerns
- Trailing ROE of -15.99% indicates the business is currently destroying shareholder capital.
- Sales are declining at -5.68%, and net profit margin is extremely thin at ₹7 crore on ₹894 crore revenue.
- Zero dividend and a FairStock Score of 9/100 point to high risk and poor investor returns.
- P/E is meaningless due to near-zero earnings, making valuation dependent entirely on asset quality.
AI Analysis
At ₹23.90, ESAF Small Fin trades at just 0.53 times book value of ₹44.90. That looks cheap, but Benjamin Graham taught us that a bargain must also be a good business. With a trailing ROE of -15.99%, the company is destroying shareholder value. Sales shrank 5.68%, and the latest quarter's net profit of ₹7 crore on sales of ₹894 crore is a razor-thin margin. The profit growth of 103.38% sounds impressive but comes off a deeply depressed base. The Piotroski F-score of 6 suggests some fundamental improvement, and the promoter holding of 63.3% does align interests. Yet the FairStock Score of 9/100 rightly flags risk. Is this a cigar butt with one puff left? Possibly. But I prefer businesses with earning power, not just assets. The market cap of ₹1,392 crore against book value suggests the crowd sees value, but also risks. I need to see consistent quarterly profits, improving ROE, and a halt in revenue decline before I call it a turnaround. Until then, this is a small finance bank in microfinance, a sector prone to credit stress. The margin of safety is real on a price-to-book basis, but asset quality and execution will determine whether the book value is real. If they can sustain profitability and grow, downside may be limited. But Buffett's rule one: don't lose money. A negative ROE is a warning flag I cannot ignore.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer