Arman Financial is that NBFC which promises to empower rural India with loans for bikes, buffaloes, and small shops — but right now, it’s empowering investors with headaches. AUM ₹2,156 Cr, branches 400+, customers 7.6 lakh. CMP: ₹1,358. P/E: 230 (which is NBFC code for “investors lost their calculators”). Q1 FY26 PAT = loss of ₹15 Cr. Yet the market values it at ₹1,426 Cr. Basically, they’re lending at 23–37% yields to rural borrowers but struggling to yield any joy for shareholders.
2. Introduction
Started in Ahmedabad, Arman Financial plays in the semi-urban & rural NBFC playground where banks fear to tread. It’s a classic “high-yield, high-risk” story: microfinance loans through Namra Finance (its subsidiary), MSME loans to shopkeepers, two-wheeler loans for Gujarat’s working class, and now LAP loans (because why not?).
On paper, yields are juicy — 23–37% across segments. But what good is high yield if GNPA is climbing faster than Sensex memes? Microfinance GNPA is at 4.41%, MSME GNPA at 3.43%, two-wheeler GNPA at 4.03%. NIM looks healthy at 12–13%, but profits collapsed 96% YoY.
So, Arman is basically playing moneylender with RBI registration. Only difference? The village sahukar didn’t need to file quarterly concall transcripts explaining why collections went down.
3. Business Model – WTF Do They Even Do?
1. Microfinance (Namra Finance) – Women-focused JLG model, lending to Kirana stores, dairy, goats, agri-related stuff. AUM ₹1,768 Cr (9M FY25). Disbursements fell from ₹1,362 Cr (9M FY24) to ₹839 Cr. GNPA ballooned to 4.4%. Clearly, rural borrowers are struggling, and Arman’s EMIs are being replaced by UPI defaults.
2. MSME Loans – Small enterprise loans in Gujarat, MP, Maharashtra, Rajasthan & Telangana. AUM grew to ₹410 Cr. Yields at a hilarious 37% (basically charging kirana stores more than your credit card). GNPA 3.43%.
3. Two-Wheeler Loans – Gujarat-only focus, AUM ₹83 Cr. Yields ~25%. GNPA improved from 5.1% to 4%. Still, lending for scooters in rural Gujarat is like betting on monsoon rains — unpredictable.
4. LAP (Loan Against Property) – New baby launched FY24. AUM ₹19 Cr. Yield 24.6%. Ticket size ~₹4.3 lakh. Sounds great until you realize rural borrowers with property loans are the first to default when the economy sneezes.
The model = high yield + high NPA + high stress.
4. Financials Overview
Source table
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
₹151 Cr
₹184 Cr
₹199 Cr
-18.1%
-24.1%
EBITDA
₹-11 Cr
₹41 Cr
₹13 Cr
-126%
-185%
PAT
-₹14.6 Cr
₹31 Cr
₹13 Cr
-147%
-212%
EPS (₹)
-13.9
29.9
12.2
–
–
Commentary: Revenue fell off a cliff, profits turned into losses. EPS went from +29.9 to -13.9 in a year. Basically, the only thing compounding here is investor stress.
5. Valuation – Fair Value Range Only
P/E Method: EPS TTM = ₹5.9 Industry P/E = 21 Fair Value = ₹125.
P/B Method: Book Value = ₹834 Industry P/B ~2× Fair Value = ₹1,600.
EV/EBITDA Method: EV = ₹2,255 Cr EBITDA TTM ~₹245 Cr EV/EBITDA ~9× (reasonable). Fair Value = ₹1,200–₹1,400.
Range: ₹125 – ₹1,400. CMP ₹1,358 is hugging the upper end — risky.
⚠️ Disclaimer: This fair value range is for educational purposes only and is not investment advice.
