Emerald Finance Q4 FY25 earnings call

Emerald Finance delivered robust financial results for Q4 and full year FY25. Consolidated total income for Q4 FY25 grew by 66.6% year-over-year to Rs. 6.5 crores, with net profit surging 132% to Rs. 2.65 crores. For the full fiscal year, consolidated total income reached Rs. 21.63 crores, a 61.9% increase from the previous year, and net profit more than doubled to Rs. 8.89 crores, up 114%. The company also reported zero Non-Performing Assets (NPA) for the year, reflecting strong asset quality.

The flagship EWA product demonstrated significant momentum, with 62 partnerships successfully onboarded as of March 31, 2025. Monthly disbursements for EWA exceeded projections, reaching over Rs. 3 crores in March 2025 against a target of Rs. 2 crores, with an average ticket size of Rs. 25,000. Management aims to scale EWA partnerships to 250 during the current financial year and targets Rs. 15 crores in EWA disbursements by March 2026.

Emerald Finance announced a strategic partnership with Baya PTE Limited Singapore for invoice discounting, targeting suppliers of large corporates like JSW Steel and Haldiram. This initiative is seen as a lucrative cross-sell opportunity for existing EWA clients, leveraging pre-existing underwriting and reducing customer acquisition costs. The company also confirmed that its mobile application has been approved by the Play Store, with a launch for listing clients imminent.

A key highlight was the achievement of zero NPAs for FY25, a significant improvement from previous years where NPAs were less than 0.5%. Management emphasized a cautious approach to growth, particularly in EWA and personal loans, prioritizing robust collection mechanisms over aggressive disbursement. They acknowledged the challenge of collecting small-ticket loans and stated a preference for 'slow and steady' growth to maintain asset quality.

The company successfully raised Rs. 17 crores through a preferential allotment in Q4 FY25, with Rs. 10.2 crores received by March 31, 2025, and Rs. 14 crores utilized, leaving Rs. 3 crores in the bank. As of March 31, 2025, the total loan book stood at Rs. 80 crores, comprising Rs. 77 crores in business loans and Rs. 3 crores in EWA. The company's net worth closed at Rs. 75.10 crores for FY25, meeting the first year's eligibility criteria for potential NSE listing, which requires maintaining Rs. 75 crores net worth for three consecutive years.

Emerald Finance positions itself as a technology-driven non-deposit taking NBFC, with its entire technology platform developed in-house by a 5-person IT team. This in-house capability ensures strong data security, privacy, and business continuity, with a stated recovery time of less than 12 hours for critical events. The company differentiates itself by owning the entire supply chain from distribution to lending and offering a one-stop financing solution through its subsidiary, ShubhBank.com, leveraging its 30-year market presence.