Northern ARC (NORTHARC)
TurnaroundFairStock Score: 40/100 — MIXED
Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹281.35 |
| Market Cap | ₹4,547.74 Cr |
| P/E Ratio | 10.49 |
| ROCE | 10.34% |
| ROE | 10.36% |
| Dividend Yield | 0% |
| Profit Growth | 40.2% |
| Debt/Equity | 3.15 |
| Sales Growth | 43.9% |
| Promoter Holding | 0% |
| 52-Week Range | ₹206 — ₹333.75 |
| Sector | Finance |
| Book Value | ₹241.1 |
Strengths
- Revenue momentum: 27.07% sales growth and latest quarter sales of ₹712 Cr.
- Moderate valuation: P/E 12.07 and P/B 1.28 versus book value ₹202.23.
- Return ratios are positive but unexciting: ROE 10.36% and ROCE 10.34%.
- Optically low PEG of 0.45 offers upside if profit growth catches up with revenue growth.
Concerns
- Profit growth is -9.88% while sales grew 27.07%, indicating margin compression.
- Piotroski F-Score of 4/9 signals weak fundamental health.
- Debt/Equity of 2.82 is high, and reported zero promoter holding raises governance and alignment concerns.
- Dividend yield is zero, so investor returns depend entirely on management execution.
AI Analysis
Looking at Northern Arc, I start with the business, not the price. An NBFC is essentially a spread business: borrow money cheaply, lend it out profitably, and survive the bad loans. The first red flag is promoter holding of zero. If the people steering the company own no shares, I should demand extra proof from the numbers. The proof is mixed. Revenue grew 27.07%, and the latest quarter shows sales of ₹712 crore with net profit of ₹92 crore. Yet profit growth is minus 9.88%, and the Piotroski F-score of 4 out of 9 suggests the earnings quality is slipping. Debt to equity is 2.82. That is high, though not unusual for an NBFC; but it means any misstep in lending will be magnified. ROE of 10.36% and ROCE of 10.34% are okay, not wonderful. Valuation is reasonable. At ₹258, market cap is ₹4,072 crore, which is 12.07 times earnings and 1.28 times book value of ₹202.23. The PEG of 0.45 looks cheap, but that ratio seems to lean on the 27% revenue growth, while actual profit fell. Graham would say price is what you pay, value is what you get. Here, I am not getting a dividend; yield is zero, so I rely on growth and capital allocation. Is this a wonderful business? No. Could it be a turnaround? Possibly, if costs stabilise and margins recover. But with no promoter skin in the game and F-score 4/9, I would watch and wait, not buy today.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer