Fedbank Financial Services Ltd.
ISIN: INE007N01010 • Market Cap: ₹5,614 Cr
The 5-Pillar Quality Audit for Fedbank Financial Services Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (63.2%), Return on Capital Employed (12.8%), and equity compounding (8.8%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 4.04 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (26.3%) and 3Y PAT CAGR (28.6%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 14.66 vs PEG of 0.75 and Dividend Yield of —.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 60.7%, backed by 20.2% institutional ownership.
Key Fundamental Strengths
Strong Topline Expansion (3Y Sales CAGR: 26.3%)
Revenue has expanded at 26.3% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 28.6%)
Net earnings have compounded at 28.6% annualized, demonstrating operating leverage.
Attractive Valuation Margin (P/E: 14.66)
Trading at a P/E multiple of 14.66, the stock offers a favourable risk-reward entry for quality compounding.
Areas to Watch & Potential Risks
Elevated Financial Gearing (D/E: 4.04)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Sectoral & Macro Headwinds (Financial Services)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Financial Services space.
Quantitative Strategy Eligibility
Checking FEDFINA against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 73/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Financial Services Sector Peer Comparison
Compare FEDFINA directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Fedbank Financial Services Ltd. (FEDFINA)Current | 73/100 | ₹5,614 Cr | 14.66 | 12.8% | 4.04 | — |
| HDFC Bank Ltd. (HDFCBANK) | 74/100 | ₹11.10 Lakh Cr | 14.05 | 12.8% | 1.01 | View |
| ICICI Bank Ltd. (ICICIBANK) | 76/100 | ₹10.06 Lakh Cr | 17.94 | 16.5% | 0.62 | View |
| State Bank of India (SBIN) | 71/100 | ₹9.66 Lakh Cr | 11.20 | 12.2% | 1.38 | View |
| Bajaj Finance Ltd. (BAJFINANCE) | 68/100 | ₹6.72 Lakh Cr | 33.07 | 13.9% | 3.86 | View |
| Life Insurance Corporation of India (LICI) | 87/100 | ₹5.22 Lakh Cr | 8.70 | 37.8% | 0.00 | View |
Frequently Asked Questions: Fedbank Financial Services Ltd.
Q:What is the 5-Pillar Fundamental Score for Fedbank Financial Services Ltd. (FEDFINA)?
Fedbank Financial Services Ltd. has a RupeeTools Fundamental Score of 73/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (67/100), Financial Health (45/100), Growth (94/100), Valuation (95/100), and Ownership Quality (78/100).
Q:Is FEDFINA fundamentally strong for long-term investment?
Yes, FEDFINA exhibits solid fundamental strength with a 73/100 score, driven by a return on equity of 8.8% and a debt-to-equity ratio of 4.04.
Q:Does FEDFINA pass the Coffee Can Investing filter?
No. FEDFINA does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does FEDFINA compare against other Financial Services peers?
Within India's Financial Services sector, FEDFINA trades at a P/E of 14.66 and generates an ROCE of 12.8%. Compare its 5-Pillar score of 73/100 against top sector peers like HDFC Bank Ltd. (74/100), ICICI Bank Ltd. (76/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.