Satin Creditcare (SATIN)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Trades at ₹169 vs book value ₹255.02, a P/B of 0.66, giving a clear margin of safety
• Piotroski F-Score 7/9 indicates improving balance-sheet quality and earnings recovery
• Latest quarter net profit ₹72 Cr on sales ₹747 Cr; trailing P/E 8.90 is undemanding
• Sales growth 9.27% and ROCE 11.87% suggest the underwriting engine is stabilising

Concerns

• Debt/equity at 3.68 is high; microfinance loans are unsecured and vulnerable to collection shocks
• ROE of 7.37% is low relative to the leverage used; book value is not yet earning an attractive return
• Zero dividend means investors depend solely on price-book convergence or further recovery
• Profit growth of 404% is from a low base and may mislead; PEG 0.04 should not be extrapolated

AI Analysis

At ₹169, Satin Creditcare is not a conventional compounder; it is a candidate for Benjamin Graham's bargain table. I am buying one rupee of book value for sixty-six paise. That is an appealing margin of safety, provided the book is sound. But the balance sheet uses considerable leverage—debt to equity of 3.68—so I must be especially sure about loan recovery and asset quality. The trailing P/E is 8.90, and the latest quarter shows sales of ₹747 Cr and net profit of ₹72 Cr, evidence that earnings are recovering after a painful microfinance cycle. The reported profit growth of 404% looks dramatic, but it is probably a rebound from a depressed base, not a sustainable growth rate. ROE is just 7.37% on book value; with this leverage, I want higher. ROCE at 11.87% is respectable. The Piotroski score of 7/9 signals a moderately improving balance sheet, and sales growth of 9.27% suggests operations are stabilising. Still, this is not a wonderful business with impenetrable moat; microfinance is a cyclical, regulated and policy-sensitive lending activity. There is no dividend, so I am totally dependent on the company closing the gap between price and book value, or continuing to lift ROE. Promoter holding of 36.17% is adequate, but not a controlling majority of the kind I prefer. I will treat Satin as a turnaround and asset play: not a long-term franchise unless it proves it can compound book value at a higher rate over several years. The low P/B alone is not enough; I need evidence on field collections and marginal returns.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer