At a Glance
Jhaveri Credits & Capital Ltd reported a Q1 FY26 net profit of ₹1.19 crore on revenue of ₹9.83 crore. The P/E ratio? A jaw-dropping 81.7—because apparently, investors think broking plus “random investments” equals Tesla. Promoter holding stands at 53.25% (down 8.5% over three years), while ROE barely scratches 3%. The company’s working capital days ballooned to 227 (aka “cash flow constipation”), and debtor days hit 60. Yet, despite low returns, no dividends, and a business model stuck between broking and financing, the market still values it at ₹217 crore. Buckle up, this is going to be fun.
Introduction
Jhaveri Credits & Capital Ltd—sounds like a Wall Street powerhouse, right? Wrong. This is a Gujarat-based broking player that also dabbles in financing and investments. The company has been around since 1993, a time when dial-up was still cool. Fast forward three decades, and Jhaveri is still hustling in commodity broking, while flirting with advisory services and financing.
The problem? Their returns scream “Why bother?” ROE is 2.78%, OPM a shaky 18.4%, and EPS just ₹1.32 this quarter. Meanwhile, its stock trades at a P/E north of 80—investors must be expecting Jhaveri to discover oil under its office parking lot.
Business Model (WTF Do They Even Do?)
Jhaveri started as a commodity broking platform, enabling clients to trade in spot and futures markets via MCX and NSEL. After surrendering its self-clearing membership in March 2023, it pivoted to financing and investment advisory. Translation: “We stopped one business; now we’re winging it with another.”
They generate revenue mainly from brokerage fees, financing income, and a sprinkle of other income (₹3.36 crore in FY25—aka their real hero). Despite this, operating margins swing wildly, proving their business strategy is as stable as a Jenga tower during an earthquake.
Financials Overview
Q1 FY26 Numbers (₹ Cr):
- Revenue: 9.83
- EBITDA: 1.81
- PAT: 1.19
- EPS: ₹1.32
Annualized EPS = ₹1.32 × 4 = ₹5.28.
Fresh P/E = ₹241 / ₹5.28 ≈ 45.6 (still insane, but slightly less than the stale 81.7).
Growth is inconsistent: Sales dropped 19.7% YoY, yet profit managed to stay in green thanks to cost control. But return ratios remain pathetic—ROE and ROCE under 3%.
Valuation
Fair Value via three lenses:
- P/E Method: Assume a sane P/E of 20 × EPS ₹5.28 = ₹106
- EV/EBITDA: With EBITDA ₹7.24 Cr (annualized), apply EV/EBITDA 10 → EV ₹72 Cr → FV ₹120/share
- DCF: Assume ₹3 Cr FCF growing 5% for 5 years, discount at 12% → FV ≈ ₹115
Fair Value Range: ₹105–₹120.
Current price ₹241 is double the “reasonable” value. Either investors know something, or they’re high.
What’s Cooking – News, Triggers, Drama
- Solar Module Order (July 2025): Order for 7,987 solar modules—no, they’re not making them; just financing? Clarity missing.
- Business Pivot: From commodity broking to financing & advisory—execution remains to be seen.
- Falling Promoter Holding: From 62% to 53% in three years. Not exactly confidence-inspiring.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 88.76 |
| Liabilities | 0.99 |
| Net Worth | 87.79 |
| Borrowings | 0.00 |
Auditor Joke: “Debt-free? Great. But with ROE at 3%, you’re debt-free because no one wants to lend.”
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Ops | 1.72 | -7.88 | -6.88 |
| Investing | 6.88 | 74.00 | -4.56 |
| Financing | -8.73 | 9.53 | -27.42 |
Auditor Remark: “Operating cash negative? Investing cash wild? Financing cash chaotic? Jhaveri’s cash flow is basically an abstract painting.”
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 2.78% |
| ROCE | 3.19% |
| P/E | 45.6 (fresh) |
| PAT Margin | 12.1% |
| D/E | 0.0 |
Verdict: “Sexy? No. Stressy? Definitely.”
P&L Breakdown – Show Me the Money
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Revenue | 11.71 | 26.21 | 23.31 |
| EBITDA | 0.97 | 2.54 | 3.36 |
| PAT | 0.79 | 1.61 | 2.41 |
Commentary: Profit is rising, but revenue slipped in FY25. Growth story? More like a growth novella.
Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| CRISIL | 3380 | 727 | 53 |
| Algoquant Fin | 234 | 31 | 61 |
| Wealth First | 52 | 35 | 37 |
| Jhaveri | 17 | 2.6 | 45.6 |
Roast: “Peers have profits to justify their P/E. Jhaveri? Just vibes.”
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 53.25% (down from 62%)
- FII Holding: 4.4% (they love gambling)
- Public Holding: 42.35%
Promoters are reducing stake—maybe they know where this is headed.
EduInvesting Verdict™
Jhaveri Credits is a curious case: a microcap with big valuation dreams. The company’s business model is in flux, swinging from broking to financing without a clear roadmap. Financially, margins are low, returns pathetic, and cash flows messy. The solar module order is interesting but unclear.
SWOT:
- Strength: Debt-free, occasional profit.
- Weakness: Low ROE/ROCE, unstable operations, promoter selling.
- Opportunity: New financing/advisory model (if executed well).
- Threat: Regulatory risks, competition, investor patience.
Final Thought:
At ₹241, the market is paying champagne prices for a soda-water company. Unless Jhaveri pulls a rabbit out of the hat, this looks like a stock where hope is the only strategy.
Written by EduInvesting Team | 31 July 2025
SEO Tags: Jhaveri Credits, Financial Services, Stock Analysis, Q1 FY26, Commodity Broking
