Concall AI

Emerald Finance — Q3 FY26 earnings call

Call held 29 Jan 2026

Management summary

Emerald Finance reported strong Q3 and 9M FY26 results, with consolidated net profit growing 73% to INR10.7 crores for the nine months. The company's asset-light model and effective cost management contributed to a PAT margin of nearly 51% in Q3. A recent credit rating upgrade to BBB- is expected to facilitate further fund-raising and reduce costs, supporting ambitious growth targets for AUM and EWA disbursements while maintaining a cautious approach to credit quality.

Highlights

9M FY26 Stand-alone net profit jumped 104% to INR8.7 crores.
9M FY26 Consolidated net profit grew 73% to INR10.7 crores.
Q3 FY26 PAT margin was close to 51%.
Credit rating upgraded to BBB- from BBB+ by CRISIL.
EWA disbursements targeted at INR11.5-12 crores by March 2026.
AUM expected to grow 20-25% from current INR103 crores.
INR17 lakhs of INR26 lakhs NPA recovered in January 2026.

Key financials

3 periods

Headline

AUM
₹103 Cr
Debt Equity Ratio
0.2
Cost of Funds
10.9%
NPA Recovered (Jan 2026)
₹17 lakh
Jan 2026 Gold Loan Syndication
₹115 Cr
Jan 2026 EWA Disbursement
₹8 Cr
EWA Revenue % of Consolidated
4.5%
Gold Loan % of Fee-based Income
60%
EWA Active Users
2,900 users
EWA Users % of Total Employee Base
13%

Q3 FY26

PAT Margin
51%
NPA (Gross)
₹26 lakh

9M

FY26 Stand-alone Net Profit
₹8.7 Cr
YoY +104%
FY26 Consolidated Net Profit
₹10.7 Cr
YoY +73%
FY26 EPS
₹3

What they filed

Q1 FY27: revenue up 40.7%, net profit up 53.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	5	6	6	7	7 +38%	8 +36%	10 +51%	9 +41%
Expenses	2	2	2	2	1	2	3	2
EBITDA	4	4	5	5	5 +55%	—	—	—
Margin	70%	71%	70%	73%	79%	—	—	—
Other income	0	0	0	0	0	0	0	0
Interest	1	1	1	1	1	1	1	1
Depreciation	0	0	0	0	0	0	0	0
Profit before tax	3	3	4	4	5 +75%	5 +61%	6 +65%	7 +53%
Tax rate	25%	25%	26%	25%	25%	25%	27%	25%
Net profit	2	2	3	3	4 +76%	4 +61%	4 +64%	5 +53%
EPS	0.63	0.73	0.74	0.92	1.04	1.11	1.17	1.33

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 10.9%
- New borrowing Engaging with State Bank and other banks for new funding post rating upgrade.
- Rate reset SBI expected to revise MPLR downwards, impacting cost of funds positively.
The debt equity ratio is only 0.2%. There is ample scope for taking the -- raising further debt. Already we will talk with now State Bank and other banks also now. Once we have now got the investment grade rating, now a lot of other banks should also open up. We are approaching we are forwarding for a couple of more banks both in the private and the public sector and we should raise funds from there.
Liquidity Cash ₹5.46 Cr Sufficient funds available and ample scope to raise more debt post rating upgrade.

5.46 Crores we have that money with us. The payment keeps coming. ... Just to summarize the discussion, we have adequate funds at our disposal, plus we have the ability to raise more. Given our debt equity ratio only sits at 20% and NBFCs are allowed as per the RBI guidelines to go up to 600% in terms of debt-equity ratio, we have ample margin on us. And given the recent rating upgrade, now we are getting offers from all avenues, including banks, NBFCs, debentures, private markets to raise more funds.

Guidance & targets

EPS

EPS EPS · FY26 · High confidence INR4-plus

And I think we should close this year on a INR4-plus EPS.

— Sanjay Aggarwal

EPS Growth

EPS Growth EPS Growth · next year · Medium confidence 7% to 8%

I think hopefully, we should touch anywhere with 7% to 8% next year.

— Sanjay Aggarwal

Overall Growth

Book Size Growth Overall Growth · next three, four years · Medium confidence 8x to 10x

We are already given that we're going to 8x to 10x in next three, four years.

— Sanjay Aggarwal

EWA Profitability

EWA Profitability EWA Profitability · future · High confidence 6% to 7%

Going forward, we actually expect that EWA's profitability will increase to anything between 6% to 7%.

— Talin Aggarwal

Distribution/Syndication Volume

Distribution/Syndication Volume Distribution/Syndication Volume · this year (FY26) · High confidence INR1,200 crores to INR1,300 crores

This year, we're projecting to do about INR1,200 crores to INR1,300 crores.

— Talin Aggarwal

EWA Disbursement

EWA Disbursement EWA Disbursement · by end of March (FY26) · High confidence INR11.5 crores to INR12 crores

Previously INR8-8.5 crores (Jan 2026) → INR11.5 crores to INR12 crores

So the idea is that by the end of March, we should be between INR11.5 crores to INR12 crores.

— Talin Aggarwal

AUM Growth

AUM Growth AUM Growth · next year (FY27) · High confidence 20% to 25%

And the idea going forward into the next year is to, one, increase our AUM from the current INR103 crores by about 20%, 25% being on the prudent side.

— Talin Aggarwal

NPA Recovery

NPA Recovery (INR26 lakhs) NPA Recovery · by end of February · High confidence complete recovery

And I think we'll be able to do the complete recovery of the outstanding amount by the end of February.

— Gurmeet Kaur

EWA Revenue % of Consolidated

EWA Revenue % of Consolidated EWA Revenue % of Consolidated · future · High confidence 6% to 7%

Previously 4.5% → 6% to 7%

About 6%, 6% to 7%.

— Talin Aggarwal

NSE Listing

Eligibility for NSE Listing NSE Listing · after FY26 and March '27 balance sheets · Medium confidence eligible

After this '26 balance sheet and the March '27 balance sheet, we should be eligible for NSE listing that also.

— Harsh

Profitability Margin

EBITDA and PAT Margin Profitability Margin · future · High confidence 75-80% for EBITDA, 40-45% for PAT

And for margin guidance, last quarter, you had given around 75% to 80% for EBITDA and PAT should have been around 40% to 45%. Is that the guidance that we are maintaining? Yes, yes, absolutely.

— Sanjay Aggarwal

What to watch in Q4 FY26

Remaining NPA Recovery

by end of February 2026

Current INR9 lakhs outstanding from INR26 lakhs NPA

Target Full recovery of INR9 lakhs

Why it matters

Verifies the company's ability to fully recover stressed assets and maintain strong asset quality.

And I think we'll be able to do the complete recovery of the outstanding amount by the end of February.

Risks & concerns

Market Turbulence and Economic Situation
medium

Company is adopting a cautious approach to credit underwriting due to market turbulence and overall economic situation, especially in the MSME space.

Management acknowledged
EWA Market Awareness and Competition
low

Low market awareness for EWA product in India, but management expects market to grow with increasing competition.

Management acknowledged
NPA from a single corporate
low

INR26 lakhs NPA from one corporate due to liquidity issues, with INR17 lakhs already recovered and full recovery expected by February 2026.

Management acknowledged

Q&A highlights

6 direct, 1 evasive

EWA Client Addition Guidance Miss Direct

Yes. There is one thing we received a lot of applications in the last quarter, but there were a lot of rejection from our side. So given the market turbulence, we are very careful on the credit part. So there is a lot of rejections that time see rather than achieving 250, we are more focused on the credit quality, what we are underwriting the corporate that should be good.

Explains why the company missed its EWA client addition target (180 vs 250), highlighting a strategic focus on credit quality over quantity amidst market turbulence.

Asked by Rohit Arora

Market Scope, Differentiation, and Long-term Blueprint Partial

So I'll just expand the horizon a little. So we're not only into gold loan sourcing and EWA... we have an entire suite of financial services... Now going forward, the idea is to increase the book size of Emerald from INR100 crores to another INR200 crores to INR300 crores in the next about five to six years... Yes. Sure, sure. We've noted it from the next probably in the next analyst call, we will take care of it.

Analyst pushed for a clear long-term vision and differentiation in a crowded NBFC space, which management acknowledged but deferred providing a detailed roadmap until the next analyst call.

Asked by Abhi Jain

NPA from a specific corporate Direct

So in the Q3, we had an NPA of about INR26 lakhs, and that was driven by one corporate, who underwent fundamental liquidity issue... out of INR25 lakhs to INR26 lakhs that we had reported to RBI as an NPA, the collection is on. And I think we'll be able to do the complete recovery of the outstanding amount by the end of February. So they don't have any... INR17 lakhs is already recovered.

Provides specific details on the NPA event, its cause, and the progress of recovery, reassuring investors about asset quality control and expected full recovery.

Asked by Pratik

EWA Delinquencies and Collection Process Direct

One we have recovered, other is still pending. ... I think some the gentlemen is hospitalized I think for medical this thing problem. He said once I join some business -- join some company, I will pay you off.6,000 we have recovered. So the purpose was to ask about how efficient we are in the collection process.

Clarifies the status of small EWA delinquencies and demonstrates the company's collection efficiency even for minor issues, with one case related to a medical problem.

Asked by Chirayu

Eclat not being a wholly-owned subsidiary Direct

See, Emerald was about 81%. It has been since day onelike that only, 81% was held by Emerald and 12% is the family, rest is withHNI. So maybe going forward -- I cannot promise, but I think maybe going forward, when we make it 100% subsidy.

Addresses the ownership structure of a key entity (Eclat) and hints at a potential future move towards 100% subsidiary status, which could simplify operations or improve transparency.

Asked by Ankit

Why smaller DSAs need Emerald Finance as an intermediary Evasive

Sir, there is a lot of disturbance in your voice. Whatever the question was asked was not loud and clear to us. ... Right. I think if you can just write to us maybe if you can just write to us, we'll reply on mail. I think that would be more convenient for everyone.

This question touches upon the core business model of how Emerald Finance leverages smaller DSAs, but a clear answer was not provided during the call due to technical issues, deferring it to an email response.

Asked by Daljit Singh

Impact of RBI rate cuts on Emerald Finance Direct

See, cost of borrowing will go down with that, and it should positively affect our profit margins. It will be good for us if RBI cuts rates further, our cost of borrowing will go down with that.

Explains the positive impact of potential RBI rate cuts on the company's cost of funds and profit margins, indicating a favorable macro environment.

Asked by Shubham Gupta

Delay in earnings call Direct

Because the management was traveling, the management was traveling internationally. Hence, the -- what do you say, the time zones weren't matching. So hence, we had to push it till the management was back in the country.

Addresses a minor operational concern about the timing of the earnings call, providing a transparent reason for the delay related to management's international travel.

Asked by Raj

2 min read 6 chapters

Detailed narrative

Q3 & 9M FY26 Financial Performance Overview

Emerald Finance reported robust financial growth for Q3 and 9M FY26. On a stand-alone basis, total income grew by 68% and net profit surged by 104% to INR8.7 crores for the nine months. Consolidated figures also showed strong performance, with total income increasing by 42% to INR21.4 crores and net profit growing 73% to INR10.7 crores. The company achieved a PAT margin of nearly 51% in Q3 FY26, reflecting its asset-light model and effective cost management.

Digital Adoption and Lending Initiatives

The company highlighted steady progress in its digital and lending initiatives, including the launch of a mobile app and becoming one of the few finance companies in India to disburse via WhatsApp. The EWA (Earned Wage Access) and gold loan syndication businesses continued to gain traction, supported by rising digital adoption. EWA active users reached 2,900-2,950, representing 13-14% of the total employee base of 24,000, with a target to increase EWA revenue to 6-7% of consolidated revenue.

Asset Quality and Risk Management

Emerald Finance maintained a strong focus on credit quality, especially amidst market turbulence. The historical NPA has been consistently low at 0.4-0.5%. In Q3 FY26, an NPA of INR26 lakhs was reported from one corporate due to a liquidity issue, but INR17 lakhs has already been recovered in January 2026, with full recovery expected by February 2026. Management emphasized prioritizing credit quality over aggressive growth, leading to rejections of applications to maintain portfolio health.

Business Verticals and Growth Strategy

The company operates primarily through two verticals: loan sourcing/syndication for 40+ banks and NBFCs (including gold loans) and its own NBFC operations (business loans, MSME, EWA). The syndication business is projected to reach INR1,200-1,300 crores this year, with INR400 crores achieved in Q3 FY26. EWA disbursements are targeted to grow from INR8-8.5 crores in January to INR11.5-12 crores by March 2026. The company aims to increase its AUM from INR103 crores by 20-25% in the next year and achieve 8x-10x overall growth in 3-4 years.

Funding and Capital Adequacy

Emerald Finance's debt-equity ratio stands at a low 0.2%, providing ample scope for raising further debt. The company's credit rating was upgraded to BBB- from BBB+, which is expected to reduce the cost of funds (currently 10.9%) and open up new funding avenues with various banks and financial institutions. Management is actively engaging with State Bank and other lenders to secure additional funding to support its growth ambitions, with SBI expected to revise its MPLR downwards soon.

EWA Business Outlook

The EWA product, while still a small portion of consolidated revenue at 4.5%, is expected to see its profitability increase to 6-7%. Management acknowledges the low market awareness and nascent competition in India but sees significant growth potential, aiming for the market itself to grow at a decent rate in the next 2-3 years. The company's in-house technology and asset-light model are key differentiators in this segment, enabling efficient operations and scalability.

This is an AI-generated summary of a publicly available earnings call transcript.

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