At a Glance
Fino Payments Bank just reported Q1 FY26 with net profit at ₹18 Cr (down 26.8% QoQ but still in green), deposits soaring 34% YoY, and digital revenue shooting up 59%. With 1.5 crore customers and 19 lakh outlets, Fino is silently building a fintech empire in Bharat while investors yawn. Stock slipped 1.4% to ₹260—maybe the market doesn’t know what to do with a payments bank that’s finally making money.
Introduction
Fino Payments Bank is like that underrated cricketer who quietly hits singles while the market cheers sixes from flashy neobanks. Born out of a mission to drive financial inclusion, Fino has become a payments powerhouse, serving rural and semi-urban India with its vast BC (Business Correspondent) network.
From AePS to remittances, deposits to bill payments, it’s doing the boring banking heavy lifting where others fear to tread. And yet, despite consistent profit growth (37% CAGR over 5 years), the stock has been a victim of fintech hype cycles—pumped, dumped, and now slowly stabilizing.
Business Model (WTF Do They Even Do?)
- BC Services: Acts as a business correspondent for multiple banks—think rural ATMs on steroids.
- Payments & Remittances: Domestic/international remittances, AePS, micro-ATM transactions.
- Digital Revenue: Fast-growing segment with UPI and digital merchant services.
- Deposits: CASA accounts to rural customers.
The beauty? Low-cost model with asset-light distribution through agents, not expensive branches.
Financials Overview
- Q1 FY26 Highlights:
- Revenue: ₹61 Cr (+34% YoY)
- PAT: ₹18 Cr (down QoQ, but steady YoY)
- Deposits: ₹1,939 Cr (+34% YoY)
- Transaction growth: +17%
- FY25:
- Revenue: ₹195 Cr
- PAT: ₹93 Cr
- EPS: ₹11.12
Growth is strong, but profits remain sensitive to cost and margin swings.
Valuation – The Crystal Ball Section
- P/E Method:
- EPS TTM: ₹10.33
- Sector P/E: 20
- Fair Value = ₹10.33 × 20 = ₹206
- EV/EBITDA:
- EBITDA ≈ ₹120 Cr
- EV/EBITDA multiple = 15
- Implied EV ≈ ₹1,800 Cr → ₹220/share
- Growth Premium: Considering 30%+ growth, assign 15% premium → ₹250
🎯 Fair Value Range: ₹206–₹250
(Current price ₹260: slightly above fair, pricing in optimism)
What’s Cooking – News, Triggers, Drama
- Digital Growth: 59% jump in digital revenue—Fino’s pivot to fintech is paying off.
- Deposit Surge: CASA growth strong, expanding low-cost funding.
- No Dividend: Investors still waiting for cash returns.
- Other Income Dependence: ₹1,653 Cr other income raises eyebrows.
- IPO Funds: No deviations, but capital deployment efficiency is key.
Balance Sheet
| (₹ Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 83 | 83 | 83 |
| Reserves | 469 | 560 | 636 |
| Deposits | 917 | 1,413 | 1,939 |
| Borrowings | 434 | 713 | 839 |
| Total Assets | 2,466 | 3,419 | 4,206 |
Auditor’s Roast: Deposits growing faster than borrowing—good. But leverage creeping up.
Cash Flow – Sab Number Game Hai
| (₹ Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating Cash | -20 | 57 | 76 |
| Investing Cash | -97 | -104 | -164 |
| Financing Cash | 184 | 279 | 127 |
| Net Cash Flow | 68 | 232 | 39 |
Commentary: Positive cash flow, but investing drain continues—fintech expansion costs money.
Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 13% | 14% | 14% |
| ROCE | 6% | 7% | 6.7% |
| D/E | 0.5 | 0.5 | 0.4 |
| Cost-to-Income | High | High | Still High |
Verdict: ROE decent, ROCE meh. Needs margin magic.
P&L Breakdown – Show Me the Money
| (₹ Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 95 | 150 | 195 |
| Other Income | 1,135 | 1,328 | 1,652 |
| PAT | 65 | 86 | 93 |
Commentary: Heavy reliance on other income; core banking still thin.
Peer Comparison
| Company | Revenue (₹ Cr.) | PAT (₹ Cr.) | P/E |
|---|---|---|---|
| AU Small Finance | 16,673 | 2,184 | 25 |
| Ujjivan Small Fin | 6,396 | 528 | 16 |
| Jana Small Finance | 4,793 | 433 | 11 |
| Fino Payments Bank | 211 | 86 | 25 |
Comment: Tiny compared to peers but growing faster than most.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 75% (stable).
- FIIs: Down to 2.5%—foreigners lost interest.
- DIIs: 3%—minimal institutional support.
- Public: Rising to 19.4%—retail believers still there.
Promoter Commentary: Keeping majority stake—confidence intact.
EduInvesting Verdict™
Fino Payments Bank is still a work in progress: it’s profitable, growing deposits, and scaling digital—but margins are thin, and dependence on other income is a red flag. For investors, it’s a smallcap fintech with potential but not without risks.
SWOT Analysis
- Strengths: Huge distribution network, fintech growth, profitability turnaround.
- Weaknesses: Low ROCE, high cost-to-income, other income reliance.
- Opportunities: UPI boom, rural banking expansion, cross-selling.
- Threats: Regulatory caps, competition from big banks and fintechs.
Final Word: Fino is like a startup inside a bank—exciting but not for faint-hearted investors.
Written by EduInvesting Team | 30 July 2025SEO Tags: Fino Payments Bank, Q1 Results, Fintech Stocks, Digital Banking
