1. At a Glance
Welcome to the financial Bermuda triangle of Dalal Street —Vardhman Holdings Ltd (VHL)— a company with₹3,745 croreworth of investments sitting inside its balance sheet, yet somehow the market values the entire enterprise at₹1,203 crore. You read that right — the company’sbook value per share is ₹11,705, but the stock trades at₹3,770, or barely0.32x book value.
With aP/E of just 4.9x, aROE of 7.55%, and zero debt, this is the kind of financial riddle that makes even Warren Buffett sip his chai and rethink “margin of safety.” TheQ2FY26 (Sep 2025)results added another twist:PAT at ₹46 crore, down6.6% YoY, while sales crashed62.8%to a humble₹2.75 crore. But remember, this is no FMCG or IT company; this is an investment vault disguised as a listed NBFC.
In the last year, shareholders have watched the stockfall nearly 30%, even as itsearnings yield stands at a sizzling 20.7%. How often do you find a profitable, debt-free company priced cheaper than its own assets? Let’s dig into this anomaly wrapped in a balance sheet wrapped in sarcasm.
2. Introduction
If Vardhman Holdings were a person, it’d be that quiet, rich uncle who drives an old Maruti 800 but secretly owns half of South Delhi. The market doesn’t notice him, but the bank certainly does.
Founded in1962, this company doesn’t make textiles, build cars, or sell masala chips. Itmakes money by owning other people’s money— quite literally. It’s aNon-Deposit Taking Systemically Important NBFC, which means RBI knows it exists but isn’t losing sleep over it.
VHL’s primary revenue comes frominterest, dividends, and gains on investments.Its portfolio is a carefully curated mix ofequity, debt, and a touch of real estate— a kind of financial thali platter with dal (fixed income), paneer (equity), and papad (real estate, just for crunch).
But despite its conservative style, it’s not a boring company. It holds a28.48% stake in Vardhman Textiles Ltd, one of India’s leading textile giants, and a50% stake in Vardhman Spinning and General Mills (VSGM). The latter hasn’t traded cotton in years — because apparently, “resting on reserves” is also a business model.
So what happens when an investment company’s own stock trades at a massive70% discount to its portfolio? That’s what makes this case a masterclass in market irony — and possibly, a PhD topic for value investors.
3. Business Model – WTF Do They Even Do?
Vardhman Holdings’ business is best described asfinancial feng shui— balancing equities, debt, and the occasional real estate to maintain harmony in returns.
They don’t make products; theymake decisions— and occasionally, dividends. The company’sincome mix in FY23looked like this:
- Interest income:43% (because lending quietly is profitable)
- Dividend income:25% (thank you, Vardhman Textiles)
- Net trading gain:8% (for when boredom hits)
- License fee receipts:24% (because renting money wasn’t enough; now they rent agreements too)
The secret sauce is itsmassive equity portfolio— ₹3,065 crore in FY23, which grew12% YoYand further to₹3,745 crore by Sep 2025. That’s the kind of growth your mutual fund dreams of while
charging 1.5% expense ratio.
In short, this company makes its living byowning, notdoing— an underrated yet elegant way of saying, “I’m rich because I invested early.”
4. Financials Overview
| Metric | Q2FY26 (Latest) | Q2FY25 (YoY) | Q1FY26 (QoQ) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 2.75 | 7.40 | 3.00 | -62.8% | -8.3% |
| EBITDA (₹ Cr) | 2.20 | 5.90 | 2.70 | -62.7% | -18.5% |
| PAT (₹ Cr) | 46.1 | 49.3 | 63.0 | -6.6% | -26.8% |
| EPS (₹) | 144.5 | 154.7 | 196.1 | -6.6% | -26.3% |
Annualized EPS = ₹144.5 × 4 = ₹578.0 → P/E ≈ 3,770 / 578 = 6.5x.
Commentary:Only in India can a company with ₹46 crore profit and ₹3 crore revenue post87% operating marginand still get ignored. If the market doesn’t appreciate this absurdity, maybe it deserves the volatility it gets.
5. Valuation Discussion – Fair Value Range
Let’s crunch numbers like true desi auditors.
(a) P/E Method:
- EPS (TTM) = ₹765
- Industry average P/E = 30.5
- Applying even a conservative 6–8x multiple (discounted for illiquidity and concentration):Fair Value Range = ₹4,590 – ₹6,120 per share.
(b) EV/EBITDA Method:
- EV = ₹1,201 Cr
- EBITDA (FY25) = ₹17 Cr
- EV/EBITDA = 70.6x (distorted by non-core income).Better to normalize using PAT-based proxy → Adjusted EV/EBITDA ~5xSo fair EV range = ₹1,201 × (5–6)/4.67 ≈ ₹1,285 – ₹1,540 Cr → Per share range ₹4,030 – ₹4,820.
(c) NAV-Based (DCF proxy):
- Book Value = ₹11,705/share
- Even at a 60% discount (historical range for holding companies), intrinsic value ≈ ₹4,700/share.
Fair Value Range (Educational Only): ₹4,000 – ₹6,000/share
Disclaimer: This fair value range is for educational purposes only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
June 2025 brought some boardroom masala:Vardhman Holdings and Aichi Steelinked aShareholders’ Agreement (SHA)after Aichi’s stake inVardhman Special Steelsrose to 24.9%. Translation: the Japanese just doubled down on Oswal-land.
In corporate musical chairs,Ms. Poorva Bhatiaresigned as CFO in Dec 2022, only to return triumphantly in July 2023 — proving that finance people don’t
