Berar Finance Limited is fast emerging as a standout player in India’s non-banking financial sector. With a laser focus on small-town lending, disciplined asset quality management, and a bold expansion strategy, Berar Finance is capturing investor attention for its unique blend of rural penetration, scalable operations, and attractive valuation. In a market crowded with giants, Berar stands out by delivering big-ticket growth from Bharat’s heartland, making it a story that investors simply cannot ignore.
The Berar Finance Growth Engine
Berar Finance’s journey is a masterclass in scaling a regional NBFC into a national force. The company’s assets under management (AUM) surged to ₹1,383 crore in FY25, up from ₹1,118 crore the previous year, reflecting a robust 24.7% year-on-year growth in advances. This growth is anchored in its core strength: two-wheeler financing, which still dominates the portfolio (94%), but with a strategic pivot toward secured MSME loans and personal loans. The company disbursed ₹1,175 crore in FY25, a 22.7% jump from the prior year, signaling strong demand and execution capability.
What sets Berar apart is its ability to scale profitably. Net profit soared to ₹32.3 crore in FY25, up from ₹22.2 crore in FY24, with a PAT margin improving from 8.2% to 11.9%. Return on assets (RoA) climbed to 2.23% (from 1.73%), and return on equity (RoE) hit 9.8%, outpacing many peers. The company’s cost-to-income ratio also improved, falling from 33.5% to 31.2%, thanks to operational efficiencies and technology upgrades.
Asset Quality & Risk Management
In an industry where asset quality is the make-or-break metric, Berar Finance has delivered consistent improvement. Gross NPAs dipped to 4.4% in FY25 (from 4.6% in FY24), while credit costs fell sharply to 2.6% (from 3.7%). This is a direct result of a robust collection framework, field visits for overdue accounts, and a focus on softer bucket delinquencies. Collection efficiency jumped to 92% in March 2025 (from 86% a year earlier), a testament to the company’s boots-on-the-ground approach.
The company’s capital buffers are strong, with a Tier I capital ratio of 22.01% and a leverage ratio (debt/tangible equity) of 3.9x in FY25. This provides a solid cushion for future growth and regulatory compliance. Berar’s diversified funding profile—across 39+ banks, small finance banks, and NBFCs—ensures liquidity and flexibility, with a contractual asset-liability surplus of 26% as of June 2025.
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Valuation & Investor Appeal
Berar Finance’s valuation story is compelling. With a P/E of 8.7 and a P/B of 0.82, the stock trades at a significant discount to the sector average (P/E 15–20x, P/B 1.5–2x). This undervaluation is underpinned by strong AUM growth, improving profitability, and institutional backing from Amicus Capital, Maj Invest, and the recent ₹150 crore infusion from Abler Nordic and First Bridge India Growth Fund. The fresh capital will fuel branch expansion and product diversification, particularly in secured MSME loans, which are expected to drive future growth.
For investors, Berar offers a rare combination: rural credit under-penetration, strong vehicle financing demand, and a clear path to geographic and digital expansion. The company’s low P/E and P/B ratios suggest significant re-rating potential if asset quality stabilizes and growth accelerates.
Competitive Landscape: Berar vs. Shriram vs. Cholamandalam
| Metric | Berar Finance | Shriram Finance | Cholamandalam Investment & Finance |
| AUM (FY25) | ₹1,383 crore | ₹2.8 trillion | ₹1.47 trillion |
| Net Profit (FY25) | ₹32.3 crore | ₹2,307 crore | ₹1,470 crore |
| GNPA (FY25) | 4.4% | 4.57% | 4.6% |
| RoA (FY25) | 2.23% | 3.4% | 2.8% |
| RoE (FY25) | 9.8% | 17% | 14% |
| P/E Ratio | 8.7 | 12.5 | 14.2 |
| P/B Ratio | 0.82 | 1.8 | 1.6 |
| Key Focus | Two-wheeler, MSME, rural | CV, retail, rural | CV, retail, rural |
Berar Finance stands out for its aggressive rural penetration, disciplined asset quality, and attractive valuation. While Shriram and Cholamandalam are larger and more diversified, Berar’s nimble operations and focus on small-town lending give it a unique edge in Bharat’s underserved markets.
Why Berar Finance is a Must-Watch for Investors?
Berar Finance is not just another NBFC; it’s a story of Bharat’s financial inclusion, disciplined growth, and undervalued potential. With strong asset quality, robust profitability, and a clear path to geographic and product diversification, Berar is poised to deliver outsized returns for investors who recognize the power of small-town lending. The company’s recent capital infusion and institutional backing further de-risk the investment thesis, making it a standout in India’s dynamic NBFC landscape.
Final words:
Ready to tap into the next wave of rural credit growth? Explore Berar Finance’s unlisted shares and position yourself for long-term wealth creation. Contact us today to learn more about investment opportunities and exclusive insights into Berar Finance’s growth story. Don’t miss the chance to be part of India’s small-town lending revolution—act now and secure your stake in Berar Finance’s big-ticket future.
FAQs:
- What is Berar Finance’s core lending focus?
Berar Finance specializes in two-wheeler financing (94% of portfolio) and is expanding into secured MSME loans and personal loans.
- How does Berar Finance manage asset quality?
The company uses a robust collection framework, field visits for overdue accounts, and a focus on softer bucket delinquencies, resulting in GNPA of 4.4% in FY25.
- What is Berar Finance’s valuation compared to peers?
Berar trades at a P/E of 8.7 and P/B of 0.82, significantly below sector averages, offering re-rating potential.
- Who are Berar Finance’s key investors?
Institutional backers include Amicus Capital, Maj Invest, Abler Nordic, and First Bridge India Growth Fund.
- How does Berar Finance fund its operations?
The company has a diversified funding profile across 39+ banks, small finance banks, and NBFCs, with public deposits and term loans.
- What is Berar Finance’s growth strategy?
The company is expanding branch network, diversifying into secured MSME loans, and enhancing digital capabilities for customer acquisition.
- What are the risks for Berar Finance investors?
Key risks include asset quality volatility, negative operating cash flows, high leverage, and dependence on two-wheeler financing.
- How does Berar Finance compare to Shriram and Cholamandalam?
Berar is smaller but more focused on rural markets, with better asset quality and valuation metrics than its peers.
- What is Berar Finance’s dividend policy?
The company has not declared dividends yet, prioritizing growth and capital accumulation.
- Is Berar Finance a buy for long-term investors?
Yes, for investors seeking exposure to rural credit growth, disciplined asset quality, and undervalued NBFCs, Berar Finance offers a compelling opportunity.