🟢 At a Glance:

Dar Credit & Capital Ltd (NSE: DCCL) just stunned with a 90.92% jump in FY25 profit — from ₹3.68 Cr to ₹7.04 Cr. Their loan book is expanding across small borrowers in semi-urban India, with technology-led sourcing, and 36.78% capital adequacy.

But here’s the real kicker — you’ve probably never heard of them.

🏦 About the Company

Dar Credit is a Kolkata-based Base Layer NBFC, operating since 1994 with presence in 6 Indian states and 27 branches. Their model? Serving:

• 🧹 Class IV government employees (cleaners, sweepers, peons)
• 🏪 Small shopkeepers and vendors (many are women entrepreneurs)
• 🏢 MSMEs needing unsecured or secured loans

Their product mix is hyper-local and unglamorous. But the numbers speak louder than the brand name.

👥 Who Runs This?

Promoter: Ramesh Kumar Vijay — CA, CS, 39 years of experience
CFO: Saket Saraf — Company Secretary
CEO: Jayanta Banik — Chartered Accountant
Business heads: Spread across Kolkata and Jaipur, with deep local roots in lending and collections

Leadership isn’t ex-Morgan Stanley material, but it’s boots-on-ground and experienced in the underbanked lending segment.

💸 FY25 Financial Highlights

This is solid financial performance by any metric — especially for an SME NBFC.

📍 Where’s the Business?

1. Personal Loans

• 👥 Municipal employees (salaried Class IV)
• 🧾 EMI deducted directly from salary — extremely low risk

2. Unsecured MSME Loans

• 🎯 Small vendors, rural entrepreneurs
• 🔥 IRR: 25.5–27%

3. Secured MSME Loans

• 🏬 Small business owners needing working capital
• 🔐 Collateral-based, up to ₹5L ticket size

Direct bank credit isn’t touching these segments. Dar is filling a critical gap.

📦 Disbursement Snapshot (FY25)

🧠 Edu Note: 74% of business comes from West Bengal. It’s very regional right now.

📊 Key Ratios (FY25)

• Debt-to-equity: 1.76 (Comfortable)
• Cost of Borrowing: 11.49%
• Loan Yield (Gross): 21.53%
• Net Interest Margin: Strong (spread of ~10%+)
• Employee base: 220+

This is not your typical fintech flashy setup. But it’s lean, margin-rich, and sustainable if NPAs stay in check.

🧠 EduInvesting Take: Hidden Gem or Regional Mirage?

Here’s the reality:

✔️ Profitable and growing fast
✔️ Strong underwriting, high IRRs, and low NPAs
✔️ Tech backbone with own LOS/LMS (Qbent, RISINGSUNTECH)
✔️ Good governance with listed debt, regular dividend payouts
✔️ CARE BBB- (Stable) credit rating

But…

⚠️ No presence in major metros
⚠️ Heavily dependent on Eastern India
⚠️ SME lender in a sector where one bad monsoon or political protest can disrupt repayments
⚠️ Limited brand visibility — retail investors might ignore it

🎯 Forward-Looking Fair Value (FV) Estimate:

• EPS: ₹7.04 (FY25 actual)
• Assuming 20–25% EPS CAGR for next 2 years
• FY27E EPS: ₹10–₹11.25
• Fair P/E Range (Smallcap NBFC): 12x–15x

🎯 Fair Value Range: ₹120 – ₹170
CMP: ₹64
Potential Upside: 2x–2.5x (if growth sustains and rating improves)

🔥 Competitive Edge

• ✅ Faster than banks
• ✅ Tighter than MFIs
• ✅ More tailored than digital-only lenders
• ✅ Diversified revenue streams across personal and MSME loans
• ✅ Strong collection mechanism — including EMI salary deduction

🧨 Risks & Red Flags

• Overexposure to a few states
• Reliance on third-party tech vendors (non-scalable in long run)
• Lack of PSU bank lines limits funding base
• SME/NBFC space is sensitive to regulatory & political risk
• Trading volume of stock is likely thin — liquidity risk

📌 Tags:

Dar Credit FY25 Results, Dar Credit Share Price, DCCL SME Emerge Results, High Margin NBFC India, Personal Loan NBFC India, EduInvesting Smallcap Analysis

🖊️ Author: Prashant Marathe
📅 Date: June 2, 2025