A small-cap fintech player is drawing investor attention after Emkay Global initiated coverage with a ‘Buy’ rating and a target price of Rs.300, implying a 44 percent upside. The bank’s strategic shift toward becoming a small finance bank is seen as a key growth driver in India’s expanding rural and semi-urban digital landscape.
Price Movement
During Wednesday’s trading session, shares of Fino Payments Bank Ltd jumped to an intraday peak of Rs.219.06 each, reflecting a 3 percent increase from the prior closing price of Rs.216.88 per share. However, the stock has retreated since then and closed at Rs.204.81 apiece.
Brokerage Rationale
Fino Payments Bank, currently priced at Rs.208.05, has received a target price of Rs.300.00 from Emkay Global, reflecting an upside potential of 44 percent. The bank has carved a niche for itself as a profitable, asset-light model riding on India’s expanding RURBAN digitization wave, especially in underserved rural and semi-urban markets. It has successfully scaled its platform by offering essential banking and payment services across a wide physical and digital network.
Looking ahead, Fino plans to transition into a distinctive small finance bank (SFB), combining its strength in payments with a focused lending model. This strategic shift is expected to further enhance its financial performance. The company targets delivering long-term returns with a Return on Assets (RoA) of over 2.3–2.5 percent and Return on Equity (RoE) of around 17 percent, supported by a low-cost structure and increasing cross-sell opportunities.
Recent Developments
Fino Payments Bank is steadily expanding its ownership business, with a customer base of 1.34 crores, including over 5 lakh digitally opened accounts and nearly 48 lakh digitally active users. Its liability franchise is strengthening as average deposits witnessed a 39 percent year-on-year growth, reaching Rs.1,890 crores.
The bank has also seen over 52 percent growth in subscription renewal income, with an active customer base of around 70 percent, reflecting growing customer trust. Furthermore, its digital footprint continues to widen, contributing 24 percent to total revenue and accounting for 1.61 percent of the UPI ecosystem volume as of December 2024.
Financial Performance
Fino Payments Bank Ltd delivered a solid financial performance in Q3 FY25, with revenue increasing by 26 percent year-on-year to Rs.49 crore, compared to Rs.39 crore in Q3 FY24. Net profit remained steady at Rs.23 crore during the same period. The consistent profitability highlights Fino’s strong operational efficiency and its ability to sustain margins while expanding its business.
Accounting Ratios
The company has a Return on Capital Employed (ROCE) of 8.33 percent and a Return on Equity (ROE) of 13.97 percent. Its Price-to-Earnings (P/E) ratio stands at 19.26, higher than the industry average of 17.17. Furthermore, the company maintains an EV to Sales ratio of 17.06 and an Earnings Per Share (EPS) of Rs.11.26.
Written by – Siddesh S Raskar
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