At a Glance
5paisa Capital Ltd is India’s Gen-Z discount broker that wants to be the “Zerodha for the rest of us.” The company’s profit has tripled in 3 years, its app user base has ballooned to over 4 million, and it recently hit ₹68 Cr PAT in FY25. But with contingent liabilities of ₹460 Cr, low promoter holding, no dividend, and weak ROE, does it deserve its current ₹1,300 Cr market cap? Let’s unpack the good, bad, and the 100% DIY madness.
1. 🧨 Introduction with Hook
In a world where Groww gets RBI nods and Angel One prints cash like it’s PayTM pre-IPO, 5paisa Capital is that quiet bro in the backbench — not failing, not topping, just submitting assignments on time.
But now, it’s not so quiet.
- Profits up 60% CAGR in 5 years
- OPM at a record 35%
- Shareholder count up >2.5x since FY22
And yet, the stock is down 15% in 1 year. Why?
2. 💼 WTF Do They Even Do? (Business Model)
5paisa is a 100% tech-first discount brokerage.
No physical branches. No lunch meetings with fund managers. No chai-paani with uncles in Ludhiana.
Offerings:
- 🧾 Equity & derivative broking (main revenue)
- 💳 Margin trading, MTF, lending interest
- 💸 MF distribution, insurance, loans
- 📱 Subscription revenue (Power Investor Plan)
This is a pure volume game, not margin game.
Think D-Mart, not Louis Vuitton.
3. 📈 Financials – Profit, Growth, Margins
Revenue & Profit (Standalone)
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS |
|---|---|---|---|---|
| FY22 | ₹298 | ₹15 | 16% | ₹5.04 |
| FY23 | ₹338 | ₹43 | 26% | ₹14.13 |
| FY24 | ₹395 | ₹52 | 27% | ₹16.62 |
| FY25 | ₹360 | ₹68 | 35% | ₹21.81 |
- 🚀 EPS has grown 4x in 3 years
- 🎯 OPM expanded from 16% → 35%
- 📉 FY25 revenue slightly down (-9%) but profit up due to tighter cost control
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹424
- TTM EPS: ₹21.81
- P/E: 19.4x
- Book Value: ₹194 → P/BV: 2.2x
- ROE: ~12%
🧮 Fair Value Range:
- Base case: 13x – 15x P/E = ₹283 – ₹327
- Bull case (20x P/E) = ₹436
🔔 Conclusion: At CMP, it’s priced just above fair value. All upside bets are on continued margin expansion.
5. 🔥 What’s Cooking – Triggers & News
- 🧾 Allotted ₹35 Cr in commercial paper (9% yield) → signs of capital crunch?
- 📈 Q1FY26 results out tomorrow
- 🧠 Active user growth rising, but monetization lagging behind peers
- 👥 Shareholders: 58,000+ (up from 22K in 2022)
⚠️ Still no dividend. And no DII interest. Just vibes.
6. 🧮 Balance Sheet – How Much Debt, How Many Dreams?
| Year | Borrowings | Reserves | Total Assets |
|---|---|---|---|
| FY22 | ₹279 Cr | ₹348 Cr | ₹1,610 Cr |
| FY24 | ₹336 Cr | ₹510 Cr | ₹2,048 Cr |
| FY25 | ₹217 Cr | ₹573 Cr | ₹1,666 Cr |
- Borrowings are falling ✅
- Equity base rising ✅
- But ₹460 Cr in contingent liabilities 😵
No clarity on what this risk is. Exchange settlement issues? SEBI penalties? We don’t know. But we’re scared.
7. 🧾 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| FY24 | ₹-91 Cr | ₹-12 Cr | ₹154 Cr | ₹51 Cr |
| FY25 | ₹98 Cr | ₹-7 Cr | ₹-141 Cr | ₹-51 Cr |
CFO went from negative to +ve in FY25. But capex low, and financing swings wildly every year. Not ideal, but manageable.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 11.9% |
| ROCE | 13.5% |
| Debt/Equity | 0.4x |
| OPM | 35% |
| ROA | 3.67% |
✅ Improving operating efficiency
❌ But profitability is still average
You’re not buying a compounder here — more like a cyclical cash gainer.
9. 📋 P&L Breakdown – Where’s the Paisa?
- Brokerage: Flat YoY
- Subscription: Rising slowly
- Interest Income: Good, but volatile
- MF/Insurance: Rounding error
Essentially, all profits are from cutting costs and tighter tech infra. Not from growing customers’ portfolios.
10. ⚔️ Peer Comparison – Who’s Winning?
| Company | P/E | ROE | OPM | Mkt Cap (₹ Cr) |
|---|---|---|---|---|
| Angel One | 21.6x | 27% | 38% | ₹25,310 |
| Nuvama | 27.4x | 31% | 53% | ₹26,988 |
| Motilal Oswal | 22.3x | 25% | 54% | ₹55,727 |
| 5paisa | 19.4x | 12% | 35% | ₹1,322 |
You’re clearly in the smallcap lane. ROE is lowest, growth is volatile, and DII interest is zero.
11. 📉 Miscellaneous – Promoters, Shareholding, Red Flags
- Promoter holding: 32.75% – quite low
- FII holding: falling from 24.8% → 21.5%
- DII: Almost non-existent
- Public: 45% – mostly retail and traders
- 0% dividend payout in 10+ years
So basically, the company is profitable… but doesn’t want to share. Cool cool cool.
12. ⚖️ EduInvesting Verdict™
Is this a future multibagger? Or a glorified trading app running on borrowed time?
Here’s the TL;DR:
✅ Profits up 4x in 3 years
✅ OPM now >35%
✅ Debt under control
✅ Huge retail customer base
BUT…
❌ ROE still average
❌ No dividend
❌ ₹460 Cr contingent liability = WHAT IS THIS BRO?
❌ Low promoter skin in the game
💰 Final Take:
Fair Value Range: ₹283 – ₹327
CMP: ₹424
At current price, it’s priced for perfection. Any slip-up in margin or growth = correction ahead.
🧠 Treat this stock like its customers treat the app: DIY, high risk, no handholding.
✍️ Written by Prashant | 📅 July 8, 2025
Tags: 5paisa Capital, discount broker, broking stock analysis, Nuvama, Angel One, financial services India, EduInvesting
