Agreed! One big sign of comfort however would have been the promoters buying at this price point. Would have greatly boosted investor confidence.
I did some modelling with the help of Claude to find it’s fair/intrinsic value (used assumptions to the best of my knowledge and guess). Would love the community’s opinions on this especially any assumptions that you think should be tweaked.
Emerald Finance Valuation.xlsx (139.0 KB)
Some serious competition coming in listed space…….
EWA….. With jify acquisition and Deeper pockets
Relatively larger NBFC further being strengthened with IPO money
The serviceable market is too big for any single player to exist. We have space for competition. In fact, as per Emerald, competition is somewhat good, as it helps raise awareness for the EWA product.
Also, the stock is under massive selling pressure; I wonder who is offloading?!
Looks like we have now reached capitulation stage in the stock with panic mode on. I think the risk reward currently is great.
People are pricing the company as a stagnant NBFC and completely ignoring their Ewa product. Market is also ignoring the growth of their base business as well as the additional growth drivers though cross selling of their vase EWA base.
Current prices in my opinion do not reflect the fundamental state of the business
If there isn’t any insider info on any wrongdoings or fraud (which is very unlikely, according to me), THEN THIS STOCK IS MASSIVELY UNDERVALUED, according to my valuation exercise as well!
Agreed. Honestly, I like the management. A few notes that I had made was that the MD was taking just 1 Lakh salary per month even when revenue growth was strong. Being a small NBFC but getting into a niche product like EWA was also very ambitious and yet they have pulled it off. I like how they are careful about loan disbursements and their vision seems to be strong.
I disagree with the market punishing them for not meeting guidance. They projected a 10x from FY 2024 profits but I would be happy with a 5x as well. Management was perhaps too optimistic but that is not an issue for me. Recently their new EWA deals have been more frequent as well.
Finally I understand that current state of themes punishes growth stocks but that is okay for a long term investor.
The recent spurt in the enrollment of companies for EWA is interesting, gives a sense that there is a deliberate acceleration , and in that, could there be a change in the selection criterion……for better or worse
It is plausible that their filter of taking on board largish enterprises(head count above) has been the dampner in the enrollment velocity
But this is just loud thinking……bit of speculation.
Unit economics of larger companies are better, so I don’t blame them.
On your analysis of the recent spurt, I hope not, and I hope that they stick by their decision to onboard structurally sound companies…. even if they are more slow. When the market understands that they are lessrisky, they will automatically get higher premiums.
They did mention that demand is there and it is basically their decision to be selective over here. On that note, I have previously noticed periods of excess onboarding followed by a lull phase, so it could be one of those more active periods.
FIIs had close to 10% now its down to 1.7 as per last filing.
Anyone knows what could be the reason for such sudden exit while they took stake very recently.
Hello Harsh .. if you don’t mind, will it be possible for you to share your valuation exercise on Emerald.
Disc: No position as of now.
Checked online and Investi Global acquired warrants at a price of 38 Rs per share. Given the fact that the price hit 160 Rs odd, I don’t blame them for selling.
To be honest, it seems not like FII selling but a specific investor selling. Minerva still has their stake on the other hand.
Hi Gaurav, it is in one of my recent comments above. Please scroll up and you’ll find it. Thanks
Thanks .. will check on the valuation model.
