Market cap ₹1,589 Cr, CMP ₹1,512. Stock P/E? 257x. Matlab yeh valuation dekh kar toh Bajaj Finance bhi sharma jaaye. Book value ₹834, PB 1.8. ROE 6.1%, ROA 2.1%, aur debt ₹1,232 Cr. Quarterly sales ₹151 Cr, par PAT -₹14.6 Cr. Matlab ek NBFC jo “interest collection” ka business karta hai, khud interest coverage 1.07x pe atka hua hai. AUM ₹1,768 Cr (down from ₹2,046 Cr last year). GNPA 4.4% aur NNPA 0.56%. Desi style mein: loan dene gaye the paisa kamaane, par GNPA ka belan abhi shareholders pe ghoom raha hai.
2. Introduction
Arman Financial – naam toh bada classy lagta hai, jaise koi designer suit brand ho, lekin asli dhandha hai rural aur semi-urban Bharat mein chhoti chhoti EMI pe zindagi chalana. Ahmedabad based yeh NBFC 1985 se hai, aur ab 7.6 lakh customers ko serve karta hai across 6 states, 400 branches. Products? Microfinance, MSME loans, 2W finance aur abhi naya launch – Loan Against Property. Matlab ekdum “sasta Bajaj Finance” model, par ground pe rural Bharat ki volatility ke saath.
Problem yeh hai ki growth ka track record mast hai – 10 saal mein 38% sales CAGR. Lekin abhi FY25 ke 9M mein AUM gir gaya, NPA chadh gaya, aur profits halka ho gaya. Lekin valuation abhi bhi jaise yeh company already Bajaj Finance ban chuki hai. Kya Arman next HDFC Bank banega, ya phir bas ek aur microfinance story jo CRISIL downgrade aur RBI inspection mein phas jaaye?
3. Business Model – WTF Do They Even Do?
Microfinance (Namra Finance WOS) – JLG model pe women ko small-ticket loans for livestock, kirana, dairy, agriculture. 6.56 lakh active customers, 392 branches across 11 states. Yield ~23%, NIM 12.6%. Lekin GNPA jump hua from 2.8% to 4.4% – matlab recovery mein dard hai.
MSME Loans – Chhoti dukaan, chhote kaam ke liye enterprise aur working capital loans. Yield 37% (jo kisi bhi angel investor ko bhi shock kar de). NPA bhi upar – GNPA 3.4% vs 2.5% last year.
2W Loans (Rural focus) – Gujarat mein 50 dealerships ke through. Yield 25%. GNPA thoda ghat kar 4% ho gaya, lekin yeh bhi unhealthy hai. Matlab bike ke saath loan bhi second-hand lagta hai.
LAP (New Baby) – Avg ticket size ₹4.3 lakh, tenure 3–7 saal. Abhi AUM bas ₹19 Cr hai, yield 24.6%. Matlab abhi pilot project hai, dekhte hain kitna chalti hai.
👉 Sawal – microfinance aur MSME dono risky aur volatile segment mein NPAs chadh rahe hain. Kya Arman diversification se safe hoga, ya har segment apna alag dard laa raha hai?
Please bring more in depth analysis for a particular Company. Never ever, i say Never ever judge a Bank or NBFC by its PE. It does not make sense and will never make sense. Price to Book is the only right valuation Matrix. Arman has been a leader along with Credit Access Grameen in Micro Finance sector, your analysis does not cover that. If you would have listened to one conference call of Arman, your research team would have realised that , all Smart analyst wait for conference call of Arman to know first hand and honest view of where the industry is progresing.
Suggest balance humour with more insights and nuances about the Company.
Let me give one research article and compare yours. https://deepeshpunetha.substack.com/p/arman-financials
Just wanted to give you a honest feedback , i subscribed after Muthu’s tweet. Increase the price of subscription if need be , but give real value for money.
One Response
Please bring more in depth analysis for a particular Company. Never ever, i say Never ever judge a Bank or NBFC by its PE. It does not make sense and will never make sense. Price to Book is the only right valuation Matrix. Arman has been a leader along with Credit Access Grameen in Micro Finance sector, your analysis does not cover that. If you would have listened to one conference call of Arman, your research team would have realised that , all Smart analyst wait for conference call of Arman to know first hand and honest view of where the industry is progresing.
Suggest balance humour with more insights and nuances about the Company.
Let me give one research article and compare yours.
https://deepeshpunetha.substack.com/p/arman-financials
Just wanted to give you a honest feedback , i subscribed after Muthu’s tweet. Increase the price of subscription if need be , but give real value for money.