Radiant Cash Management Services Limited

Radiant Cash Management Services reported a stable performance for FY25, with consolidated revenue growing 10.6% to ₹4,334 million. Consolidated EBITDA saw a 12.5% increase, and PAT grew by 5.8% over the previous year. Despite muted top-line growth influenced by macro factors, the company improved its consolidated EBITDA margins by 31 basis points, reaching 17.91% in FY25, primarily due to stringent cost control measures and improved performance from subsidiaries.

The company's strategy to enhance direct business has yielded significant results, with its contribution to standalone revenues increasing to 15% in FY25, up from 5.2% last year. This growth is complemented by a robust 40% revenue increase in the Cash Van Operations segment. Management emphasized targeting nationalized banking sectors that have not yet outsourced cash management, leveraging existing infrastructure and a wide array of service offerings to expand this direct client base.

Radiant Acemoney, the fintech subsidiary, achieved a significant turnaround within 18 months of acquisition. It reported ₹219 million in revenue for FY25, a substantial increase from ₹34.8 million in the previous year, and achieved EBITDA margins exceeding 20%. The company installed 64,228 POS machines in FY25 and aims for an ambitious target of 90,000 machines in the current financial year, focusing on increasing transaction volumes in rural, untapped markets.

The Radiant Valuables Logistics (RVL) segment showed improved performance, although it is yet to achieve breakeven. Management views RVL as a long-term strategic growth area, targeting 20-22% of overall revenue contribution within three years. They anticipate RVL to reach breakeven in the current or early next quarter, leveraging existing cash logistics infrastructure and focusing on the diamond, bullion, and jewelry markets.

Radiant continues to focus on operational efficiency through cost reduction measures and improved cross-functional collaboration. The company added 86 new clients, 456 new end customers, and 8,048 new retail touch points in FY25. Despite the rise of digital payments like UPI, management noted that cash in circulation remains healthy at ₹36-37 lakh crores, indicating continued demand for cash management services, especially in rural areas where digital payment penetration is still low.

Management expressed confidence in achieving mid-to-high teens revenue growth (15-18% CAGR) over the next three years. This growth, combined with the company's high operating leverage, is expected to drive further improvements in EBITDA margins. The company's healthy ROCE of 17.1% and ROE of 17.2% underscore its strong balance sheet and effective working capital management.