Moneyboxx Fin. — Q4 FY25 earnings call

Call held 29 May 2025

Management summary

Moneyboxx Finance Limited reported a challenging FY25 with AUM growing 27% to INR 927 crores and total income up 56% to INR 199 crores. Profit After Tax significantly declined to INR 1.25 crores due to higher NPA provisions stemming from rural economic stress and regulatory tightening. The company is strategically shifting towards secured lending, which now constitutes 45% of its AUM, and is focused on improving collection efficiencies and reducing operating costs, targeting a recovery in FY26.

Highlights

  • AUM grew 27% YoY to INR 927 crores in FY25.

  • Total income grew 56% YoY to INR 199 crores in FY25.

  • Net Interest Income grew 60% YoY to INR 136 crores in FY25.

  • Net Interest Margin (NIM) remained around 16.23% for Q4 FY25.

  • Operating expenses as a percentage of AUM was 12.8% in FY25.

  • Profit After Tax (PAT) for FY25 stood at INR 1.25 crores, down 86.3% from INR 9.14 crores in FY24.

  • Secured loan book increased to 45% of total AUM in Q4 FY25, up from 24% in Q4 FY24.

  • Overall collection efficiency (current and up to 30 days past due) improved to 99.4% in March 2025.

Concerns

  • Rural economic slowdown, heatwaves, and floods impacting delinquency levels

  • RBI tightening policies for unsecured lending, increasing risk weightages

  • Elevated Gross and Net NPA levels

Key financials

  1. AUM ₹927 Cr +27%YoY
  2. Total Income ₹199 Cr +55.5%YoY
  3. Net Interest Income ₹136 Cr +60%YoY
  4. Net Interest Margin 16.2%
  5. Operating Expenses as % of AUM 12.8%
  6. PAT ₹1.25 Cr -86.3%YoY
  7. Secured Loan Book as % of AUM 45%
  8. Gross NPA 6.6%
  9. Net NPA 3.4%
  10. Collection Efficiency (0-30 days) 99.4%
  11. Collection Efficiency (0-90 days) 98.4%
  12. Credit Cost as % of Average AUM 3.3%
  13. Average Cost of Borrowing 13.1%
  14. Marginal Cost of Borrowing 12.3%
  15. Yield 28.1%
  16. Net Worth ₹261 Cr +54.4%YoY
  17. Debt-to-Equity Ratio 2.44×
  18. Capital Adequacy Ratio 29.3%

What they filed

Q1 FY27: revenue down 11.9%, net profit down 12.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue49 52 52 59 55 +11%55 +6%63 +21%52 −12%
EBITDA19 18 15 23 24 +21%— — —
Net profit2 0 -5 0 0 −86%0 +75%0 +109%0 −12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Debt Debt disclosed Cost 13.1%
    • New borrowing Highest NCD raise in FY25, including INR 165 crores in one month (Feb-Mar) ₹185 Cr
    In FY25, our average cost of borrowing stood at 13.1%, while the marginal cost was lower at 12.3%.
  • Liquidity Liquidity disclosed Capital adequacy ratio of 29.25% and INR 270 crores equity raised since inception up to March 2025.
    Our debt-to-equity ratio stood at 2.44x, and we maintained a healthy capital adequacy ratio of 29.25%. As we look ahead, we remain committed to building a sustainable business that leverages both technology and deeper customer insight to deliver value to all our stakeholders.

Guidance & targets

AUM

  • AUM Growth AUM · FY26 · High confidence over 50%
    And as you asked about the AUM target, with lenders, we are at least targeting a 50% growth. In fact, over 50% growth in AUM for the current year.

    — Deepak Aggarwal

Secured Lending

  • Secured AUM as % of Total AUM Secured Lending · March 2026 · High confidence approximately 65%
    This steady progress puts us firmly on track to reach a target of approximately 65% secured AUM by March 26, reflecting our strategic shift towards building a more resilient and lower risk portfolio.

    — Deepak Aggarwal

  • Secured AUM as % of Total AUM Secured Lending · FY27 · Medium confidence 75% to 80%
    And in 27, it will be 75% plus. So it could be around 75% to 80%, more likely 80 than 75.

    — Deepak Aggarwal

Operating Expenses

  • Opex as % of AUM Operating Expenses · next two years · Medium confidence below 10%
    We are targeting to bring down our opex below 10% over the next two years, supported by growth in AUM and ongoing efficiency improvements.

    — Deepak Aggarwal

  • Opex as % of AUM Operating Expenses · FY26 · High confidence between 11% and 12%
    Opex, I believe it should be between 11% and 12%. It all depends on how soon we are able to grow our AUM. Our target would be to remain anywhere between 11% to 12%.

    — Deepak Aggarwal

Credit Cost

  • Credit Cost Credit Cost · current year (FY26) · Medium confidence around 3%
    So my guess is that, but given that there is some portfolio which has already moved to NPA, maybe around, you know, 3% kind of credit cost we still see for the current year.

    — Deepak Aggarwal

Cost of Borrowing

  • Reduction in Cost of Borrowing Cost of Borrowing · next two, three years · Medium confidence minimum 3% to 3.5%
    So there is a scope of about minimum 3% to 3.5% reduction over the next two, three years.

    — Deepak Aggarwal

Branch Network

  • Number of Branches Branch Network · March 2026 · High confidence 175 plus
    We plan to expand this further to 175 plus branches by March 2026, ensuring deeper penetration and better service delivery across regions.

    — Deepak Aggarwal

  • Number of Branches Added Branch Network · current year (FY26) · High confidence another 63 branches
    In the coming year, our target is to add another 63 branches.

    — Deepak Aggarwal

Collection Efficiency

  • Stabilization of 0-90 bucket Collection Efficiency · Q1 FY26 · High confidence stabilization
    In terms of 0 to 90 bucket, I believe that the stabilization is seen in Q1.

    — Deepak Aggarwal

Profitability

  • Recovery Profitability · FY26 · Medium confidence year of recovery
    It will be, '26 will be the year of recovery, where I see that on the financials, as I already said that 1 year got lost. But this year will be the year of recovery.

    — Deepak Aggarwal

  • Improved Results Profitability · FY27 · Medium confidence very, very significantly better
    And '27 would look very, very significantly better.

    — Deepak Aggarwal

What to watch in Q1 FY26

AUM Growth

FY26
Current 27% YoY in FY25 (INR 927 crores)
Target Over 50% growth for FY26

Why it matters

AUM growth is crucial for improving operating leverage and overall profitability, as highlighted by management.

And as you asked about the AUM target, with lenders, we are at least targeting a 50% growth. In fact, over 50% growth in AUM for the current year.

Risks & concerns

  • Rural economic slowdown, heatwaves, and floods impacting delinquency levels

    high

    Lesser spending due to elections, heatwaves, and floods increased delinquency levels, impacting disbursements across all levels.

    Management acknowledged

  • RBI tightening policies for unsecured lending, increasing risk weightages

    high

    RBI tightening policies, especially for unsecured lending, increased risk weightages, disturbing the industry and impacting disbursements.

    Management acknowledged

  • Elevated Gross and Net NPA levels

    high

    GNPA increased to 6.61% and NNPA to 3.42% in Q4 FY25 due to slowdown in rural economy and negligible write-offs, though collection infrastructure is improving.

    Management acknowledged

  • Lower than expected AUM growth impacting operating leverage

    medium

    AUM growth was not as per expected numbers, which temporarily paused the decline in operating expenses as a percentage of AUM due to branch expansion.

    Management acknowledged

Q&A highlights

8 direct
Investor confidence, cost cutting, credit costs, and growth targets Direct
First of all, I think the confidence should not be shaken. You know, we have to compare this, you know, with the way industry has reported numbers for this year. I think there is no doubt that last year was one of the most challenging years we have seen in recent times.

Analyst directly challenges management on investor confidence and asks for concrete forward-looking targets, which management provides.

Asked by Mihir Shah

Unsecured portfolio health and NPA levels Direct
No, no, no. It's not 12% NPA. But try to understand, it's not blown up. I mean, see the situation currently that, there were factors in the rural economy because of the reasons I mentioned. Even if you have 2%, 3% kind of movement out of 100 borrowers, if, you know, 3, 4 customers go bad, right, you have a higher NPA levels. So that's what has happened.

Analyst questions the severity of NPA in the unsecured book, and management clarifies the situation, attributing it to external factors and emphasizing collection improvements.

Asked by Mihir Shah

Outlook on profitability given current yields, borrowing costs, opex, and credit costs Direct
No, not like that. See, you look at it, one is that this is not 24% yield, our yield is still at 28% plus. So it's not that even with 24% ROE, you have you have PF of 2.5%. And then you have multiple other sources of income.

Analyst probes if the company is heading for another no-profit year, and management explains other income sources and higher actual yields.

Asked by Mihir Shah

Drivers for secured lending growth and long-term goals for this portfolio Direct
So one is that we have communicated well that we want to touch upon a customer which is reasonably well off. So, in terms of business, in terms of stability of business, then in terms of good, having a good collateral, multiple sources of income.

Analyst asks about the strategic shift to secured lending, and management details the drivers (new branches, customer profile) and sets clear targets for its proportion.

Asked by Mamta Agarwal

Changes in underwriting process for unsecured lending to mitigate delinquencies Direct
So that's one area wherein the customer profile is also changing. With respect to your question related to unsecured segment, I think not just this year, starting last year only we had made some changes in our underwriting model.

Analyst asks about risk mitigation in a stressed segment, and management explains the shift in customer focus (away from low-income MFI-type customers).

Asked by Mamta Agarwal

Future proportion of livestock financing (cattle) in the AUM Direct
I think the exposure will reduce in terms of percentage. So it will remain one of the focus areas. But as we are growing, so you know, if I tell you in South with four states, the cattle book is only around 20%.

Analyst questions the concentration risk in cattle financing, and management indicates a strategic reduction in its proportional share while improving its quality.

Asked by Sahil

Opex guidance (11-12%) vs. branch expansion Direct
So, Harsh, it actually depends on how soon we are able to increase the AUM from now. So, opex changes with each INR100 crore number.

Analyst challenges the opex guidance, and management clarifies that opex is highly dependent on AUM growth and current focus is on optimizing existing branches rather than aggressive expansion.

Asked by Harsh Shah

Drivers for the decline in cost of borrowing Direct
I think we will see that companies which are in the INR1000 crores, INR4000 crores, INR5000 crores AUM, they are borrowing at between 9% and 10%. So, that is fundamentally as your scale of operations grow, and as your credit rating improves, the pricing of loans decreases.

Analyst asks about the improving cost of funds, and management attributes it to scale and improved credit rating, projecting further reductions.

Asked by Darshan

3 min read 6 chapters

Detailed narrative

Financial Performance Overview for FY25

Moneyboxx Finance Limited reported a 27% year-on-year growth in AUM, reaching INR 927 crores in FY25, up from INR 730 crores in FY24. Total income for FY25 increased by 56% year-on-year to INR 199 crores, with Net Interest Income growing 60% to INR 136 crores. Despite this growth, Profit After Tax for FY25 significantly declined to INR 1.25 crores from INR 9.14 crores in FY24, primarily due to higher NPA provisions. The Net Interest Margin remained stable at around 16.23% for Q4 FY25.

Strategic Shift Towards Secured Lending

The company is undergoing a strategic shift towards secured lending, with the secured loan book now representing 45% of total AUM in Q4 FY25, a substantial increase from 24% in Q4 FY24. This shift is driven by new branch expansions in states like Gujarat and Bihar, which exclusively focus on secured business, and a deliberate move towards customers with better collateral and multiple income sources. Management aims to increase secured AUM to approximately 65% by March 2026 and further to 75-80% by FY27, expecting a more resilient and lower-risk portfolio.

Asset Quality and Collection Enhancement

Asset quality faced challenges in FY25, with Gross NPA rising to 6.61% and Net NPA to 3.42% in Q4 FY25, attributed to rural economic slowdown, heatwaves, and RBI tightening for unsecured lending. However, collection efforts have shown significant improvement, with overall collection efficiency (current and up to 30 days past due) reaching 99.4% in March 2025, up from 97.3% in December 2024. The company has built a robust collection infrastructure, including telecallers and state-level teams, and expects stabilization in the 0-90 days past due bucket by Q1 FY26.

Cost Management and Operational Efficiency

Operating expenses as a percentage of AUM remained at 12.8% in FY25, similar to 12.7% in FY24, primarily due to branch expansion and lower-than-expected AUM growth. Management acknowledges that operating expenses are highly dependent on AUM scale and aims to reduce this ratio to between 11-12% in FY26 and below 10% over the next two years. The focus for the current year is on optimizing existing branches and growing AUM with the current manpower to improve operational leverage.

Funding and Capital Adequacy

Moneyboxx Finance successfully raised INR 185 crores in NCDs during FY25, with INR 165 crores raised in a single month, strengthening its funding profile. The average cost of borrowing for FY25 was 13.1%, with the marginal cost at 12.3%, reflecting benefits from improved credit rating and scale. Management anticipates a further 3-3.5% reduction in borrowing costs over the next two to three years. The company maintains a healthy capital adequacy ratio of 29.25% and a debt-to-equity ratio of 2.44x, supported by INR 270 crores in equity raised since inception.

Economic Environment and Industry Outlook

Management noted that FY25 was a challenging year for the industry, particularly for lenders with rural exposure, due to factors like elections, heatwaves, floods, and RBI's tightening of unsecured lending norms. Despite these headwinds, the broader economic environment in India remains encouraging, with projected GDP growth of 6.5% in FY26 and an optimistic agricultural outlook. The company expects FY26 to be a 'year of recovery' and FY27 to show 'very, very significantly better' results, driven by its strategic shifts and operational improvements.

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