1. At a Glance
Paisalo Digital is like that quietly growing moneylender-next-door who suddenly tells you they’re running an ₹803 Cr empire. With 11 million customers, a co-lending BFF in SBI, and PAT of ₹47 Cr this quarter, the story just turned serious.
2. Introduction with Hook
Imagine if Paytm and your neighborhood chit fund had a disciplined, risk-averse child. That’s Paisalo Digital.
- 11 Mn customers (read: a mini country)
- AUM crosses ₹2,700 Cr
- Q1 FY26 PAT: ₹47 Cr (up 24% YoY)
And yet, the stock’s chilling around ₹30. Either Mr. Market is high or blind.
3. Business Model (WTF Do They Even Do?)
Paisalo is a non-deposit-taking NBFC, specializing in small-ticket loans for semi-urban and rural India.
Key Segments:
- Umeed/Pragati/Vikas loans: ₹10K–₹50K for income generation
- Mobility Loans: E-rickshaws, autos, tempos
- Entrepreneur Loans: Udaan loans up to ₹20L
- Corporate Loans: ₹5 Cr cap
- Business Correspondent Model: Paisalo operates 970+ CSPs for SBI
Translation: It’s like a hybrid between a microfinance lender, loan agent, and rural fintech infra provider.
4. Financials Overview
Q1 FY26 (June 2025)
- Revenue: ₹219 Cr (YoY growth ~61%)
- Net Profit: ₹47 Cr
- Financing Margin: 30%
- EPS: ₹0.52
- Gross NPA: 1.05%
- Net NPA: 0.80%
- ROE: 14%
This isn’t a penny stock pretending to be serious. This is a serious NBFC stuck with a penny stock valuation.
5. Valuation
Let’s apply some simple NBFC math:
Valuation Methods Used:
- P/B multiple (Median for NBFCs = 2.5x)
- P/E multiple (Peer average = 25x)
- DCF-lite estimate based on 18% growth
Current Book Value (FY25): ₹17
EPS TTM: ₹2.29
Fair Value Range:
- P/B-based: ₹17 x 2.0 to 2.5 = ₹34–₹42
- P/E-based: ₹2.29 x 15 to 22 = ₹34–₹50
Final EduVal™ Fair Value Range: ₹34 to ₹45
6. What’s Cooking – News, Triggers, Drama
- Q1FY26 Press Release: ₹472 Mn PAT, 14% AUM growth
- Co-lending tie-up with SBI extended
- Management reshuffle announced at AGM
- NCDs secured per statutory cover ratio
- FIIs dumping: Holding down from 10.4% to 8.08% in June 2025
- Public holding UP from 21% to 33% YoY
The crowd is waking up. The institutions? Not so much.
7. Balance Sheet
| Item | FY25 (Rs Cr) |
|---|---|
| Equity Capital | 90 |
| Reserves | 1,445 |
| Borrowings | 3,559 |
| Other Liabilities | 160 |
| Total Liabilities | 5,255 |
| Fixed Assets | 75 |
| Investments | 20 |
| Other Assets | 5,160 |
Key Points:
- Borrowing-heavy (₹3,500+ Cr) but stable asset structure
- Capital adequacy not disclosed, but leverage rising
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | -452 Cr | -5 Cr | 476 Cr | +19 Cr |
| FY24 | -570 Cr | +3 Cr | 553 Cr | -15 Cr |
| FY25 | -842 Cr | -13 Cr | 945 Cr | +90 Cr |
Interpretation:
- Operating cash is negative due to loan disbursals (expected for NBFCs)
- Raising debt to fund loan book
- Net cash positive in FY25 due to financing inflow
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 14% |
| ROA | 4.26% |
| Net NPA % | 0.80% |
| Interest Cover | Low |
| Dividend Yield | 0.32% |
| Debt/Equity | ~2.5x |
Verdict:
Decent ROE, decent asset quality, meh interest coverage. It’s not sexy. But it ain’t broke either.
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹471 Cr | ₹656 Cr | ₹771 Cr |
| Interest Cost | ₹209 Cr | ₹270 Cr | ₹328 Cr |
| Financing Profit | ₹134 Cr | ₹244 Cr | ₹273 Cr |
| Net Profit | ₹94 Cr | ₹179 Cr | ₹206 Cr |
| EPS | ₹1.04 | ₹1.99 | ₹2.29 |
| Financing Margin % | 28% | 37% | 35% |
Smooth and scalable, but capital-hungry.
11. Peer Comparison
| Company | CMP ₹ | P/E | ROE % | NP Qtr ₹Cr | Sales Qtr ₹Cr | Market Cap ₹Cr |
|---|---|---|---|---|---|---|
| Bajaj Finance | 948 | 35.4 | 19.2 | 4,479 | 18,457 | 5,89,487 |
| Muthoot Finance | 2,683 | 20.2 | 19.6 | 1,443 | 5,621 | 1,07,742 |
| Cholamandalam | 1,573 | 31.0 | 19.7 | 1,259 | 7,045 | 1,32,354 |
| Paisalo Digital | 31 | 13.6 | 13.9 | 47 | 219 | 2,790 |
Paisalo is basically the underdog in this NBFC Hunger Games. Undervalued by 30–50% based on peer metrics.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: Down from 52.6% to 48.2% (Q-o-Q)
- Promoter Pledge: 28.4% of their stake
- Public Holding: Jumped to 33%
- FII Holding: Dropping steadily – now only 8%
- Investor Count: 99,608 (that’s a lot of believers)
Pledging is a red flag. But retail is taking charge.
13. EduInvesting Verdict™
Paisalo is like that underrated side character in a Bollywood movie who turns out to be the real hero. It’s got:
- Strong business fundamentals
- A sticky customer base
- Pan-India SBI-backed distribution
- Growing EPS and low NPAs
But the market’s ignoring it like last season’s meme. Cheap for now, but not for long.
Metadata
– Written by EduInvesting Team | 21 July 2025
– Tags: paisalo digital, nbfc, microfinance, sbi partnership, undervalued stocks
