At a Glance
Avonmore Capital & Management Services Ltd, a tiny NBFC with a knack for surprising quarters, reported Q1 FY26 profit of ₹7.3 Cr (+38% YoY) on revenue of ₹36.3 Cr. The company is almost debt-free, has trimmed working capital days, yet still refuses to share the love via dividends. Stock trades at ₹19 (P/E ~20), looking cheap at first glance but hiding some structural weaknesses.
Introduction
This is not your Bajaj Finance or even your neighborhood Muthoot – Avonmore is the underdog NBFC that occasionally wakes up with a strong quarter, only to snooze again. With erratic revenue patterns (hello, OPM whiplash) and promoter stake erosion, investors remain cautious. Can this microcap rise, or will it continue its slow waltz?
Business Model (WTF Do They Even Do?)
Avonmore’s primary game is:
- Loan & Advances: Corporate lending, short-term credit.
- Sub-broker Advisory: Minor revenue stream but gives them an NBFC badge.
It’s classified as a Non-Systemically Important NBFC – which basically means “too small to fail, too small to care.”
Financials Overview
Q1 FY26:
- Revenue: ₹36.3 Cr (+3.5% YoY)
- EBITDA: ₹5.6 Cr (OPM ~15.5%)
- PAT: ₹7.3 Cr (+38% YoY)
- EPS: ₹0.14
FY25:
- Revenue: ₹180 Cr
- PAT: ₹38 Cr
- ROE: 8.6%
- ROCE: 10.5%
Commentary: Profit jump looks nice, but historical growth remains inconsistent. Other income still props up numbers.
Valuation
- P/E: 19.9
- P/B: 1.43
- ROE: 8.6%
Fair Value Estimate:
- P/E Method: EPS FY26E ~₹1; fair P/E 12–15 → ₹12–₹15
- P/B Method: Book ₹13.2; fair P/B 1–1.2 → ₹13–₹16
- DCF: Unstable cash flow, minimal growth → ₹14
Fair Value Range: ₹13–₹16 (current ₹19 looks stretched)
What’s Cooking – News, Triggers, Drama
- Board Changes: New secretarial auditor appointed.
- Scheme of Arrangement: Withdrawn, refiling expected in 90 days.
- Promoter Holding: Down 6% over 3 years – raises eyebrows.
- Dividend: Zero. Investors cry in silence.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 580 |
| Liabilities | 206 |
| Net Worth | 374 |
| Borrowings | 21 |
Auditor Joke: “Debt-free but still stingy with dividends – classic NBFC frugality.”
Cash Flow – Sab Number Game Hai
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Ops | 18 | 42 | -3 |
| Investing | -18 | -36 | -20 |
| Financing | -2 | -13 | 45 |
Takeaway: Negative OCF despite profits – cash flow gymnastics at its best.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 8.6% |
| ROCE | 10.5% |
| P/E | 20 |
| PAT Margin | 22% |
| D/E | 0.05 |
Observation: Low D/E is sexy, low ROE is stressy.
P&L Breakdown – Show Me the Money
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 212 | 124 | 180 |
| EBITDA | 142 | 18 | 41 |
| PAT | 122 | 20 | 38 |
Commentary: Wild swings in EBITDA – investors need a seatbelt.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Bajaj Finance | 73,107 | 17,425 | 31 |
| Muthoot Finance | 20,214 | 5,333 | 20 |
| Shriram Finance | 43,778 | 8,508 | 14 |
| Avonmore Cap | 181 | 27 | 20 |
Roast: Same P/E as Muthoot, but 1/1000th the business size.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 58.4% (down from 69%)
- FIIs: negligible
- Public: 41.6%
- Buzz: Scheme of arrangement – watch this space.
EduInvesting Verdict™
Avonmore Capital is the classic microcap NBFC – low debt, unpredictable profits, and no dividends. While the Q1 spike is encouraging, sustainability is questionable.
SWOT
- Strengths: Debt-free, high margins in good quarters.
- Weaknesses: Unstable cash flows, promoter dilution.
- Opportunities: Scheme of arrangement could unlock value.
- Threats: Growth inconsistency, regulatory pressure.
Final Take: A niche NBFC that looks cheap but isn’t a screaming bargain. Investors betting on it need patience (and maybe a stiff drink).
Written by EduInvesting Team | 31 July 2025SEO Tags: Avonmore Capital, NBFC Stocks, Microcap Finance
