1. At a Glance
5paisa was born to democratize investing. What it ended up democratizing was anxiety. From being IIFL’s digital baby to now a semi-grown-up discount broker, it serves 50L+ users, yet bleeds cash flow, faces mounting competition, and runs a brokerage with startup soul but PSU-style margins. ROE? Meh. ROCE? Shrinking. Contingent liabilities? ₹460 Cr. Should investors DIY this stock too?
2. Introduction with Hook
Once upon a time, in a bull market far, far away, 5paisa promised every Indian the ability to trade like a pro — for 5 rupees.
- EPS: ₹21.8, but growth is plateauing
- ROE: 11.9% (Angel One laughs in 27%)
- P/E: 20.9, Book Value: ₹194, Stock: ₹399
- Operating Profit is up… but PAT is wobbling like your SIP returns in 2020
Meanwhile, retail investors are asking: bro, tu grow karega bhi ya nahi?
3. Business Model (WTF Do They Even Do?)
5paisa = Angel One’s cousin from a smaller house in the same colony.
- Core Model: DIY trading platform, flat-fee discount broking
- Products: Equity, F&O, MF, Insurance, Loans, Robo-advisory
- Revenue Drivers: Brokerage, subscription plans, interest on funds
- Target Audience: Retail, active traders, cost-conscious millennial investors
- How They Make Money: Volume × low fee × scale (the Zerodha dream)
Problem? Their CAC is high, retention mid, and monetization — still a work in progress.
4. Financials Overview
| FY | Revenue (Cr) | EBITDA (Cr) | OPM % | PAT (Cr) | EPS | ROE % | ROCE % |
|---|---|---|---|---|---|---|---|
| 2021 | ₹194 | ₹48 | 25% | ₹17 | ₹6.8 | 12% | 12% |
| 2022 | ₹298 | ₹48 | 16% | ₹15 | ₹5.0 | 8% | 8% |
| 2023 | ₹338 | ₹87 | 26% | ₹43 | ₹14.1 | 12% | 12% |
| 2024 | ₹395 | ₹107 | 27% | ₹52 | ₹16.6 | 13% | 13.5% |
| 2025 | ₹360 | ₹127 | 35% | ₹68 | ₹21.8 | 11.9% | 13.5% |
Observation: Revenue growth stalling. Margins expanding. But bottom-line? Soft.
5. Valuation
- P/E: 20.9
- Book Value: ₹194 → P/B = 2.06
- Dividend: LOL. Never paid.
Fair Value Range:
- Bear Case: EPS ₹18 × P/E 15 = ₹270
- Base Case: EPS ₹22 × P/E 20 = ₹440
- Bull Case: EPS ₹26 × P/E 25 = ₹650
Fair Value Range: ₹270 – ₹650
CMP ₹399 = not overvalued… but not undervalued either. It’s that awkward mid-cap zone where conviction goes to die.
6. What’s Cooking – News, Triggers, Drama
- Q1FY26 PAT: ₹12 Cr → okayish, but not market-moving
- CEO & Compliance Officer exits (Jul 2025): Uh-oh.
- New independent director appointed: Patchwork governance fix?
- Contingent liabilities of ₹460 Cr: We repeat. ₹460 Cr.
- CAC remains high. App user growth slowing.
- Interest income plays a major role now. Are we a NBFC now or a broker?
7. Balance Sheet
| Year | Equity | Reserves | Borrowings | Total Assets |
|---|---|---|---|---|
| FY21 | ₹26 Cr | ₹133 Cr | ₹234 Cr | ₹866 Cr |
| FY23 | ₹31 Cr | ₹436 Cr | ₹169 Cr | ₹1,644 Cr |
| FY25 | ₹31 Cr | ₹573 Cr | ₹217 Cr | ₹1,666 Cr |
Key Observations:
- Borrowings jumped in FY25
- Reserves healthy, but balance sheet not light
- Nearly ₹850 Cr in other liabilities = fund flow tightness
8. Cash Flow – Sab Number Game Hai
| Year | Operating CF | Investing CF | Financing CF | Net CF |
|---|---|---|---|---|
| FY22 | ₹-138 Cr | ₹-15 Cr | ₹225 Cr | ₹72 Cr |
| FY23 | ₹25 Cr | ₹-9 Cr | ₹154 Cr | ₹51 Cr |
| FY25 | ₹98 Cr | ₹-7 Cr | ₹-141 Cr | ₹-51 Cr |
Insight: Operating cash flow finally positive. But overall FCF? Still fragile. Broking + tech ≠ cash cow yet.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 12% | 13% | 11.9% |
| ROCE | 12% | 13.5% | 13.5% |
| OPM | 26% | 27% | 35% |
| Working Capital Days | -942 | -900 | -789 |
| CAC Recovery Period | ~6-9 months | Stable | Stable-ish |
Conclusion: Margins are improving. But capital efficiency isn’t mind-blowing. Inventory days? Not applicable. They’re not selling onions.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT | EPS | Dividend |
|---|---|---|---|---|---|
| FY22 | ₹298 Cr | ₹48 Cr | ₹15 Cr | ₹5.0 | 0% |
| FY24 | ₹395 Cr | ₹107 Cr | ₹52 Cr | ₹16.6 | 0% |
| FY25 | ₹360 Cr | ₹127 Cr | ₹68 Cr | ₹21.8 | 0% |
Analysis: EPS looks solid on paper. But free cash flow + scalability needs more horsepower. Where’s the moat?
11. Peer Comparison
| Company | CMP | P/E | ROE | ROCE | PAT (Cr) | Mcap (Cr) |
|---|---|---|---|---|---|---|
| Angel One | ₹2,679 | 20.7 | 27% | 25.8% | ₹1172 | ₹24,256 Cr |
| Nuvama | ₹7,318 | 26.7 | 31% | 20.4% | ₹985 | ₹26,349 Cr |
| IIFL Sec | ₹330 | 14.4 | 33% | 34.6% | ₹712 | ₹10,227 Cr |
| 5paisa | ₹399 | 20.9 | 11.9% | 13.5% | ₹68 | ₹1,247 Cr |
Verdict: They’re the smallest kid in the broking playground. And the slowest growing.
12. Miscellaneous – Shareholding, Promoters
- Promoters: Just 32.75%
- FIIs: 21.57%
- DIIs: Barely 0.25%
- Public: Holding ~45%
- Shareholders: From 22K → 58K in 3 years = decent traction
- No bonus, no dividend, no drama (except resignations)
13. EduInvesting Verdict™
5paisa Capital is what happens when you build a good tech platform… but forget to optimize the business around it. It’s not broken — it’s just not brilliant.
Yes, the brand is well-known. Yes, OPMs are rising. But:
- Growth is stalling
- Debt still exists
- Governance wobble is real
- And competition is literally every third fintech startup + Zerodha + Angel One
Unless something big changes, 5paisa may stay what it is: a mid-broker in an over-brokered market.
Metadata
– Written by EduInvesting Research | 12 July 2025
– Tags: 5paisa Capital, Discount Broking, Fintech, Zerodha vs Angel One vs 5paisa, Smallcap Stock, Edu Style, 13 Point Article
