1. At a Glance

Franklin Leasing & Finance Ltd is that old-school NBFC which has been around since 1992, quietly surviving every RBI mood swing, market crash, bull run, bear hug, and WhatsApp tip season. As of the latest close, the company sits at a market cap of about ₹17.4 crore with a share price hovering around ₹11. The stock trades at a headline P/E of 124, which sounds like a Himalayan valuation until you realize the “E” is so tiny it needs a microscope. Book value stands tall at ₹24.1 per share, meaning the stock is trading at roughly 0.46x book, which screams “deep value” to optimists and “value trap” to cynics. Returns over the last three months are mildly positive at around 2.3%, while the one-year return looks like it tripped on a banana peel at -39%. ROE and ROCE are both under 1%, which is less “return on equity” and more “return of patience.” The latest half-year numbers show revenue of ₹8.55 crore and PAT of ₹0.10 crore, reminding everyone that this is a finance company that prefers stability over spectacle. Curious already? Good. Let’s open the files.

2. Introduction

If Indian NBFCs were characters in a Bollywood movie, Franklin Leasing & Finance Ltd would not be the hero dancing on Swiss mountains. It would be that quiet uncle in the background who owns property, gives loans to people who don’t get loans elsewhere, and somehow always survives every plot twist. Incorporated in 1992, this company has seen liberalization, Harshad Mehta, global financial crises, demonetization, COVID, and now algorithmic trading memes—and it’s still filing results.

The company is registered as a Non-Systemically Important, Non-Deposit Taking NBFC. Translation for normal humans: it lends money, invests in securities, doesn’t take public deposits, and is small enough that RBI doesn’t lose sleep over it. Its revenue mix in FY24 shows a heavy tilt toward sale of shares (around 73%), with interest income contributing roughly 11% and profits from futures transactions around 16%. So yes, this is not a boring vanilla lender; it’s part loan shark, part trader, part “let’s see what works this year.”

But here’s the twist: despite being debt-free and having decent liquidity ratios, the company’s profitability metrics look anaemic. ROE under 1% for years is not exactly a poster child for capital efficiency. So the question is obvious—why does this company exist, and what keeps it going? Let’s break it down, slowly, with sarcasm and spreadsheets.

3. Business Model – WTF Do They Even Do?

Franklin Leasing & Finance Ltd operates as a classic small NBFC with a mixed bag of financial services. Its core activities include inter-corporate deposits, loans against property, personal loans, and unsecured loans. In theory, this is a diversified lending book. In practice, it’s more like a thali where one item tastes different every year.

In FY24, the company disbursed loans worth about ₹16.61 crore, which was nearly 86% lower than FY23. That’s not a slowdown; that’s applying brakes with both feet. On the investment side, it held investments worth ₹12.25 crore, marginally up by about 2% year-on-year. This tells you the company was more in capital preservation mode than expansion mode.

What makes Franklin interesting (or confusing) is its revenue dependence on trading and sale of shares. When markets are kind, revenue smiles. When markets sneeze, profits catch a cold. This model gives flexibility but also volatility. It’s like running a kirana store where sometimes you sell groceries and sometimes you day-trade NIFTY futures from the counter.

The business model doesn’t scream scalability. It whispers survival. And sometimes, in smallcap India, survival itself is an achievement. Would you trust such a model to compound aggressively? Or is this more of a balance-sheet parking lot with optionality? Think about that.

4. Financials Overview (Half-Yearly Results Locked)

Result Type Detected: Half-Yearly Results
EPS Annualisation Rule Applied: Latest EPS × 2

Half-Yearly Comparison Table (Figures in ₹ Crore, EPS in ₹)

Annualised EPS: ₹0.06 × 2 = ₹0.12

Now for the commentary. Revenue has dipped slightly YoY but jumped sharply compared to the previous half, which suggests some recovery momentum. EBITDA margins are thin, like diet papdi chaat. PAT is volatile because when absolute numbers are small, percentages start doing bhangra. The company is profitable, yes, but in a “please don’t sneeze” kind of way.

Does this look like a business gearing up for exponential growth? Or does it look like one carefully managing oxygen levels? Your call.

5. Valuation Discussion – Fair Value Range Only

Let’s do this the polite, academic way.

Method 1: P/E Based

• Annualised EPS: ₹0.12
• Reasonable P/E range for small NBFC with low ROE: 8x – 12x
• Implied value range: ₹0.96 – ₹1.44 per share

Method 2: EV/EBITDA

• EV: ~₹13.6 crore
• Annualised EBITDA (approx):