At a Glance
MK Ventures Capital Ltd (MKVL), once a textile player, has now dressed itself up as an NBFC under the watchful eye of market veteran Madhusudan Kela, who acquired 83.66% in 2022. Sounds promising? Well, the stock trades at ₹1,665 with a P/E of 68, despite negative quarterly profit growth and a sales drop of nearly 66% in Q4 FY25. The company’s high valuation rests on brand Kela’s reputation and past growth, but current numbers are wobbling like a three-legged chair.
Introduction
When an NBFC with single-digit revenue and occasional profit volatility trades at a valuation higher than some blue-chip lenders, you know something spicy is cooking.
MK Ventures has transformed from textiles to finance, leveraging its NBFC license to grow its lending portfolio. The last few years saw stellar growth (CAGR 53% in profits over five years), but the latest fiscal showed a steep revenue fall (-39% YoY) and PAT decline (-56% YoY). Investors seem to be paying a hefty “Madhusudan Kela premium” here.
Business Model (WTF Do They Even Do?)
- Nature: Non-Systemically Important, Non-Deposit Taking NBFC.
- Core Business: Lending and financing – primarily corporate loans, structured debt, and capital market-linked products.
- No deposits: Reliance on equity and borrowings for capital.
- Strategic Edge: Kela’s expertise in capital markets may bring high-yield deals, but also high risk.
Roast Mode: Basically, MKVL lends money without taking deposits, bets on high-yield opportunities, and prays defaults don’t rain on their parade.
Financials Overview
- Revenue (FY25): ₹25 Cr (down from ₹41 Cr in FY24)
- Operating Profit: ₹14 Cr (OPM 56.5%)
- PAT: ₹9.3 Cr (down from ₹21 Cr)
- EPS: ₹24.4
- ROE: 9.5% (was 26% three years ago)
Comment: The growth story has hit speed bumps. OPM remains high, but absolute profits are shrinking.
Valuation
1. P/E Method
- EPS FY25: ₹24.4
- Industry P/E: ~20
- Fair Price ≈ ₹500
2. P/BV Method
- BV: ₹267
- Reasonable P/B for NBFCs: 2–3x
- Fair Value ≈ ₹550–₹800
3. DCF
Given
