Paragon Finance Ltd Share Price Live NSE/BSE & Institutional Fundamental Analysis

Paragon Finance Share Price: A ROCE Efficiency Analysis

A key trend in the Non-Banking Financial Company (NBFC) sector is the increasing pressure on return on capital employed (ROCE) due to rising borrowing costs and intensifying competition. This analysis examines the financial health of Paragon Finance, focusing on its ROCE, and provides a data-driven perspective on its operational efficiency. The current Paragon Finance share price stands at ₹45.32, with a price-to-earnings (PE) ratio of 26.56 and a ROCE of 1.76%. This analysis forms a component of a comprehensive, 80-parameter fundamental audit, verified by Sweta Mishra.

The most striking observation is Paragon Finance's ROCE of 1.76%. ROCE measures how efficiently a company uses its capital to generate profits. A low ROCE, like that exhibited by Paragon Finance, indicates that the company is not generating significant returns relative to the capital invested. This is a crucial point for investors to consider, as a low ROCE can hinder future growth and potentially impact shareholder value. While this is lower than the average rate on fixed deposits, a better point of comparison would be the risk free rate or cost of capital.

To gain a better perspective, we can compare Paragon Finance with its peers. While data is needed to get a full picture, we could say that Apollo Finvest, for example, may demonstrate stronger operational efficiency due to better management quality, as evidenced by potentially higher ROCE figures (hypothetically speaking, and data will vary). A strong management team can implement strategies to improve asset utilization and cost control, ultimately boosting ROCE. A more in depth analysis may reveal whether Paragon Finance has plans to become more competitive.

The 1.76% ROCE directly impacts Paragon Finance's "moat," or competitive advantage. A higher ROCE typically translates to a wider moat, indicating a stronger ability to defend against competitors and generate sustainable profits. In Paragon Finance's case, the low ROCE suggests a weaker moat. This potentially makes the company more vulnerable to competition, especially if peers are able to generate higher returns. It's important to note that this analysis is based solely on publicly available data and observed trends. We aren't making any claims or suggesting any actions beyond this report. It remains a small part of a much larger audit.