At a Glance
Nalin Lease Finance Ltd (NLFL) – the tiny Gujarat-based NBFC that lends against gold and smiles – has dropped its Q1 FY26 results. Revenue stood at ₹2.05 Cr (10.8% YoY growth), while PAT fell 27% to ₹0.92 Cr. The stock trades at ₹52, almost at book value (₹53.5). Small, rural, and almost debt-free – but growth? Let’s just say it’s snoozing.
Introduction
Imagine an NBFC operating in Gujarat’s rural lanes, giving loans against gold jewellery to traders and farmers. It sounds simple, like lending with a personal touch. But in the capital markets? Simplicity doesn’t always pay.
Nalin Lease is a microcap that’s quietly profitable, but doesn’t scale like its giant cousins (Bajaj, Muthoot). It’s like comparing a chai stall to Starbucks – loyal customers, no IPO buzz.
Business Model (WTF Do They Even Do?)
- Core Business: Loans against gold to rural/small-town customers.
- Customer Base: 3,074 active borrowers.
- Registration: RBI-registered NBFC (Non-Deposit Taking).
- Revenue: Primarily from interest income on loans.
The company sticks to its niche, but without aggressive expansion, it risks becoming a stagnant pond in a sea of fintech sharks.
Financials Overview
Q1 FY26 Performance:
- Revenue: ₹2.05 Cr (+10.8% YoY)
- PAT: ₹0.92 Cr (-26.9% YoY)
- OPM: 68.8% (consistent)
FY25 Highlights:
- Revenue: ₹6.43 Cr
- PAT: ₹3.52 Cr
- ROE: 10.6%
Bottom line: Profits are shrinking, costs creeping up, and growth is crawling.
Valuation
- P/E: 9.7 – cheap on paper.
- P/B: 0.97 – trades near book value.
- DCF: Minimal growth, low leverage; fair value around ₹40–₹60.
Verdict: The stock is fairly priced; no major margin of safety.
What’s Cooking – News, Triggers, Drama
- Management Changes: Committee reconstitution; independent director’s term ended.
- Operations: Stable but no diversification beyond gold loans.
- Trigger to Watch: Any fintech tie-up or aggressive branch expansion.
Balance Sheet
| Assets | ₹ Cr |
|---|---|
| Total Assets | 37.6 |
| Net Worth | 35.1 |
| Borrowings | 1.5 |
| Liabilities | 1.1 |
Comment: Balance sheet is clean; almost debt-free.
Cash Flow – Sab Number Game Hai
| Year | Ops | Investing | Financing |
|---|---|---|---|
| FY23 | ₹3.65 Cr | -₹4.27 Cr | ₹1.09 Cr |
| FY24 | ₹1.14 Cr | -₹4.50 Cr | ₹2.74 Cr |
| FY25 | -₹3.04 Cr | ₹5.60 Cr | -₹2.84 Cr |
Remark: Operating cash flow is erratic – red flag for sustainability.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 10.6% |
| ROCE | 13.4% |
| PAT Margin | 62.6% |
| P/E | 9.7 |
| D/E | 0.05 |
Comment: Margins good, returns mediocre, growth meh.
P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹5.95 Cr | ₹4.27 Cr | ₹2.99 Cr |
| FY24 | ₹7.73 Cr | ₹5.83 Cr | ₹3.85 Cr |
| FY25 | ₹6.43 Cr | ₹4.14 Cr | ₹3.52 Cr |
Revenue dipped in FY25, but profits remain positive.
Peer Comparison
| Company | Revenue (₹Cr) | PAT (₹Cr) | P/E |
|---|---|---|---|
| Bajaj Finance | 73,107 | 17,425 | 31.7 |
| Muthoot Finance | 20,214 | 5,332 | 19.7 |
| Nalin Lease Finance | 6.6 | 3.2 | 9.7 |
Comment: In the NBFC league, Nalin is a dwarf among giants.
Miscellaneous – Shareholding, Promoters
- Promoters: 71.9%
- Public: 28.1%
Promoter holding is high, but no dividends despite steady profits.
EduInvesting Verdict™
Nalin Lease Finance is a safe but sleepy microcap. It’s profitable, debt-free, and steady – but growth is stunted. Investors shouldn’t expect fireworks; it’s a slow burner.
SWOT
- Strengths: Clean balance sheet, niche gold-loan focus.
- Weaknesses: Tiny scale, low growth.
- Opportunities: Rural financial inclusion, digital gold loan offerings.
- Threats: Rising fintech NBFCs, margin pressure.
Final Word: A “steady chai stall” stock – safe to sip, but don’t expect a latte.
Written by EduInvesting Team | 29 July 2025SEO Tags: Nalin Lease Finance, Q1 FY26 Results, Microcap NBFC, Gold Loan Companies
