Detailed Narrative
Q3 FY25 Performance Highlights
Akme Fintrade reported a robust Q3 FY25, with Asset Under Management (AUM) growing by 30% year-on-year to ₹523 crores. Quarterly Profit After Tax (PAT) saw a significant increase of 110% year-on-year, reaching ₹8.93 crores, and a 9.69% quarter-on-quarter growth. Disbursements for the quarter were ₹70.12 crores, marking an impressive 185% year-on-year and 18% quarter-on-quarter growth, primarily driven by the vehicle loan segment which grew by 37%.
Asset Quality and Risk Management
The company demonstrated improved asset quality, with Gross Non-Performing Assets (GNPA) reducing to 2.86% from 3.13% in Q2 FY25, and Net Non-Performing Assets (NNPA) decreasing to 1.27% from 1.47%. Management emphasized their focus on 100% secured lending for both vehicle loans (GNPA 2.96%) and MSME business loans (GNPA 2.82%), which insulates them from the stress seen in unsecured MFI segments. They also highlighted a stringent credit policy that rejects or reduces loans for customers with a Fixed Obligation to Income Ratio (FOIR) exceeding 60%.
Funding and Capital Adequacy
Akme Fintrade successfully raised ₹65 crores in term loans from various financial institutions during the quarter, including ₹10 crores from Shriram Finance and ₹25 crores each from Maanaveeya Development & Financial and Indian Overseas Bank. An additional ₹35 crores were raised through convertible warrants to support expansion plans. The company's Capital to Risk-weighted Assets Ratio (CRAR) stood at a strong 65% as of December 2025, with a target to close FY25 at around 55%. A recent rating upgrade from BBB Stable to BBB+ Stable is expected to further reduce borrowing costs.
Strategic Growth Initiatives
The company is actively pursuing digital transformation, aiming for full-scale digital operations by the end of the financial year to streamline processes and enhance customer experience. A significant new initiative is the foray into Electric Vehicle (EV) financing, targeting two-wheelers, three-wheelers, and solar rooftops, with a product launch anticipated in February 2025. They are also expanding their physical footprint, operating 14 branches in Rajasthan, 3 in Maharashtra, 6 in MP, and 5 in Gujarat, enhancing local presence and operational efficiency.
Future Outlook and Long-term Targets
Management projects AUM to reach ₹600 crores by the end of Q4 FY25. For the long term, they aim for AUM of ₹1,000 crores by March 2026 and ₹1,500 crores by March 2027, representing 60% and 50% growth in FY26 and FY27 respectively. Profit After Tax (PAT) ratio is targeted at 35% for FY26 and 30% for FY27. The company remains committed to its earlier FY25 PAT guidance of ₹35 crores, expecting ₹10 crores in Q4, and anticipates a new CARE rating by March.
Share Split Rationale
The company announced a stock split from ₹10 to ₹1 face value. The rationale behind this decision is to increase accessibility for a broader base of investors and enhance liquidity in the overall capital of the company. Management believes this will attract more investors and make the shares more accessible, thereby increasing overall market participation.