Emerald Finance Ltd (BSE: 538882) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Sanjay Aggarwal — Managing Director
Gaurmeet Kaur — Chief Risk Officer
Talin Aggarwal — Head, Business Development
Analysts:
Ronak — Analyst
Rohit Arora — Analyst
Abhi Jain — Analyst
Pratik — Analyst
Ankit — Analyst
Chirayu — Analyst
Harsh — Analyst
Daljit Singh — Analyst
Shubham Gupta — Analyst
Raj — Analyst
Rohit Juneja, — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Q3 and 9M FY26 results conference call of Emerald Finance Ltd. As a reminder, all participants lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rauner. Thank you. And over to you.
Ronak — Analyst
Thank you. On behalf of Caden Advisors, I welcome. You all to the conference call of. Imran Finance Limited from the management team we have Mr. Sanjay Agarwal, Managing Director, Mrs. Gurneet Kaur, Chief Risk Officer and Mr. Kalan Agarwal, Head of Business Development. Over to you sir. Thank you.
Sanjay Aggarwal — Managing Director
Earnings call for Emirates Finance Limited with me is Ms. Kurmeet, our chief Risk Advisor Anne Tale who is Chief Business Advisor and heading the tech Tech team. On behalf of the management team, extend my sincere appreciation to all our stakeholders, investors, analysts for joining us today. We have concluded first nine months of the year FY26 on a decent note and with a healthy financial growth, operational progress and expansion on all the three verticals in which we are operating in our EVA as well as gold loan syndication business has continued to gain more attraction supported by our rising digital adoption in our company.
For the first nine months our total standalone income grew by 68% and our net profit jumped by 104% to increase 8.7 cr. On consolidated basis our total income has increased by 42% to 21.4 cr and our net profit grew by 73% to 10.7 cr. The results highlight the strength of our asset light model and effective cost management. Operationally, our quarter reflected a steady progress in our digital and lending initiatives. We have launched our mobile app plus we have become one of the few companies in India finance companies in India to do disbursement via WhatsApp. Also we have done a syndication of more than 105 crore in gold loans only in the month of December.
In the previous quarter we were solely audited by Crystal for the annual review. And I’m glad to inform you that Crystal has updated investment grade to BBB minus from the previous BBB retained. This will help us in further easing of funds at reduction in the cost of our funds. Before I conclude, I would like to thank all our shareholders, customers, partners, employees for the continued trust and support. And lastly, I would like to point out in the last year we had deposit total tax of 2.2 to CR. And for the first nine months we had already made a provision for 3.63 crores as well as the CSR front.
Last year we did a CSR of 18.46 lakhs. This for the first nine months we have done already done 28 lakhs. With this strong foundation and disciplined execution we are constantly a component of sustaining our growth momentum and building embed finance into scalable and more importantly relevant financial enterprise. I will now open for question and answer please.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rohit Arora, an individual investor. Please go ahead.
Rohit Arora
Hello sir, am I audible? Yeah, Mr. Go ahead. As previously, at the start of this financial year our guidance was to add around 250 PWA clients. Yeah. And currently we have reached 180.
Sanjay Aggarwal
Yeah, 180. If you look at the guidance short.
Rohit Arora
Yes, 70. And are we still comfortable to achieve?
Sanjay Aggarwal
Yeah, that is one thing. We received a lot of applications in the last quarter but there was a lot of rejection from our side. So market, given the market turbulence, you are very careful on the credit part. So you know there are a lot of rejections that time. You know, rather than, you know achieving 250, we are more focused on, you know, the credit quality. What we are underwriting the corporates now. That should be good. Come again.
Rohit Arora
We are looking to add corporates of size of almost.
Sanjay Aggarwal
No, what way? Like normally we undertake corporates of 101 plus. Okay. A lot of applications and if you continue to receive lot of applications, you know, but we’re tightening our credit norms given the surveillance in the market now and the overall coming situation. You know we have been careful in approving onboarding the corporates. So that is why, you know, we just onboarded 30 corporates in the last quarter.
Rohit Arora
Yes, that’s why I was asking the question.
Talin Aggarwal
Yeah, pitch in here. Sorry. So actually we revised our underwriting and credit policy on 1 October 2025 given the market situation. So you know, as I mentioned that we indeed received a lot of application interest from companies but given the tightening of our own study tools, a lot of them were rejected. Right. So we are actually now focusing on the quality of properties we’re getting rather than the quantity alone. If you actually see towards the business front, our business has increased at a much faster pace than the corporate, than the pace at which we’ve onboarded new corporates. The idea is to now focus on the quality we are onboarding. You know, given the turbulent or market conditions, given it especially, especially in the MSME space.
Sanjay Aggarwal
But if you see in spite of the tight credit norms over both the top line and the bottom line have grown in the last quarter.
Rohit Arora
Yes, that is, that is very good. And are we looking to a different corporates which are working in different, different businesses.
Sanjay Aggarwal
They’re open to all types of business lines.
Rohit Arora
And are we spend expanding to more geographies?
Sanjay Aggarwal
Yeah, we are already operating Pan India. We are operating as far as Chennai, Chennai, this is Calcutta. We are already operating the Surat Pune, Hyderabad.
Rohit Arora
And what are the qualities that we are looking in the corporates because before acquiring them as a NEVA customer.
Talin Aggarwal
So. So before we partner with any company we essentially are looking at two major things. One is the cash flow statement and financial position. Second is the credit history. So as the corporate effect will be defaulted on any trade lines or has any outstanding DPTs. 1. Second, is the corporate cash rich or is the corporate profitable that they can meet salary for the next three months? So these are a major criteria. Then we of course have you know further underwriting which we do on the corporates.
Rohit Arora
And energy related ipp. Independent power producers are doing very good. Are we adding them as a client? So electricity renewable related projects, related companies.
Talin Aggarwal
If we get them, if we get an opportunity to partner, you know, we’ll follow our underwriting and definitely partner with them.
Rohit Arora
Okay, thank you.
operator
Thank you. The next question comes from the line of Abhijain from AJ Capital. Please go ahead.
Abhi Jain
Hello. Am I audible? Yeah, yeah. Hi. So I’m new to the company so I just wanted to understand one in terms of this crowded market, this whole NBFC space that you are in, given that you know the two main product lines that I understand you operate in, in the Gold Loan and EWA space, can you help us understand and can you help the broader investing community understand what is the scope and what is the, you know, breadth of the market that currently are operating in. I mean how much in this market grow, what is your penetration and whether you would need to diversify into other products and just give us a five or seven year blueprint to help understand what is the ambition of the company and where can it go from here.
Talin Aggarwal
So let me, let Me? Sure, let me take this. So I’ll just expand the horizon a little. So we’re not only into gold, home sourcing and eva. So again just to go back. So we incorporated back in 94, 95. You know, we started as a loan sourcing agent for Citi Finance back then. And in 2015 we received a BSE license, BSE listing along with our NBFC license. So if you essentially see our balance sheet today. So we have two major verticals. One, we are a loan sourcing agent for 40 plus banks and NBFCs for whom we do retail loans, wholesale loans.
So Gold loan is part of the syndication business itself within the subsidiary. Second, we are an NBSE. So we have roughly 103 crores in AUM. Now the majority of this is made of business loans, MSME business loans and EVA is a very small portion of this. So essentially we have an entire suite of financial services which we cater to, you know, whenever we onboard a corporate or to its employees in general. So combined both the entities, you know, we have a breadth of product which we have and a good suite of technology. I would say there going forward, the idea is to increase the book size of emerald from 100 crores to another 2 to 300 crores the next 5 to 6 years.
But while simultaneously increasing the syndication business. From the syndication business, we receive a healthy fees without any risk and we see a good pool of customers being sourced through our DSAs.
Abhi Jain
All right, next session in two parts. On the syndication side, how what is the current month on month growth that you are witnessing? And secondly, again coming back to the question since on the NBFC side, within that it’s a crowded space, right? And the ambition right now is to grow the book from 100 crores, 200, 300 crores in the next five to six years. I mean there is a plethora of NBSC which are, you know, at a much larger scale, growing at a much faster pace. So what differentiates you? And just to understand, I mean, what is the differentiator and how does an investor understand how well the company understands and analyzes and underwrites risk? Because I mean, you know, risk calibrated growth is something that stands out in nbsp. So can you just throw some light around that also? And secondly, on the distribution side, what is your month to month growth?
Talin Aggarwal
Sure. So I’ll just start maybe with the risk part here. So our historical risk in the past 11 years, since the NBFC has been in operation, you know, since we’ve Received a license. Our historical NPA has been lower than 0.4, 0.5% historically. Right. So I think in terms of our underwriting slash, basically very, very prudent there. And that reflects with our NPA numbers as well. Now coming to the distribution growth. So last year we did close to 900 crores worth of distribution or about a thousand crores worth of distribution combined for all the banks and NBSCs.
This year we’re projecting to do about 1200 to 1300 crores. So last quarter in fact we did 400 crores in totality as indication. And this quarter we are expecting it to grow up by a bit. Now where the mode here comes is, is our distribution, right? Because again if you’re doing 400 crores a quarter for other banks, we see the kind of quality clients are getting. So it’s not very difficult for us to Maybe source even 10% of that into our own books. Right. So our distribution is very much sorted from that end. And again the distribution business as we mentioned is growing decently.
We did about 115 crores of GL last month itself which is, which has been growing tremendously for us. And thirdly, being we are a technology company, we have an entire in house technology team and the entire EVA stack is built in house. A lot of our processes are built in house. So I think that allows us to leverage technology at a much larger scale. So even if you see our pat margins, our pat margins have been growing quarter on quarter. So last quarter we had a pat margin of close to 51%.
Sanjay Aggarwal
So in India only three companies are, you know, right now, you know, focused on the eva. One is us, other is refined, third is DC in Bombay refine its Chennai based. And if you look at EVA companies worldwide, they’ve been going at a tremendous speed. And you know there’s no doubt in India such a huge market that Vishud in the coming years grow at a much faster speed. And it’s a lot of you have taken checks and balances and that’s why you know, NPS numbers are very low.
Abhi Jain
Right? No, that was helpful. But you know, since the company is still new to the investor as what would help and if I could forward, our suggestion is that if you could lay out as part of invested X or going forward, you know, just as a presentation, a five year, ten year kind of a roadmap just to understand, I mean where do you see yourself going? What are the sectors that will grow? How will your growth will be, you know, risk, agitis, calibrated, because that really gives an insight into what can be expected and then people can track you down from there as to whether the organization is going in the right direction. Currently it’s blue ocean in terms of understanding the company. There’s so many companies, it’s such a crowded space. So to give valuation premium or just to understand the company better, you need much more insights into the company. That’s what my position would be.
Sanjay Aggarwal
Absolutely true. You know two years back our total EPS was 1.37. Last year it was 2.57 and for the first nine months we have crossed 3. If you just expedite, you know I think we should close this year on a four plus EPS and you know, on a quarter year on year basis almost going 70 to 80%. Now if we close a 4 plus EPS this year, I think hopefully we should touch anywhere with seven to eight next year.
Abhi Jain
Oh man, that’s, that’s what interests me. The growth interests me. I just, you know, for the long term investors it helps to have a vision and a roadmap so that you know we can also understand and align ourselves to that document would really help.
Talin Aggarwal
Yeah, yeah, oh sure, sure. We’ve noted it from the next.
Sanjay Aggarwal
We already given, you know that is going 8 to 10x next to 4 years. I think they’re on track a year or two if you look at almost having 70% year on year basis.
Abhi Jain
I wish you all the best and you know from whatever I hear from your comments and so I wish you all the best and I’ll be tracking your journey.
Sanjay Aggarwal
Is there huge scope in IBN now? You have not even felt the surface. India is such a huge market. If you look at companies in Philippines or Indonesia, they have grown so big in Ivan there’s no reason why companies in India will not grow.
Abhi Jain
Thank you. That’s it from my side and hoping to attend more calls and understand the company better. Thank you.
operator
Thank you. The next question comes from the line of Pratik from Code Advisory llp. Please go ahead.
Pratik
Hello, I’m audible. Yes sir, you are audible to us. Yeah, I just wanted to understand how much of the interest income that we generated in this quarter three comes from eva. And for the fee based income, how much of that revenue comes from gold?
Talin Aggarwal
Sure, sure, I’ll take that. So only on the EVA front. So EVA may don’t charge any interest. You need to have a processing fee. So it’s booked under the processing fee income. Okay.
Pratik
So when we are seeing fee based income was around 4 crores for quarter three, Eva would be included in this.
Talin Aggarwal
Correct. So I just give you the revenue. Revenue split altogether between all the three verticals. Yeah. Four and a half percent of the consolidated revenue was from EVA. About 47% was interest income. The balance was previous income.
Pratik
And gold as a percentage of fee based income would be.
Sanjay Aggarwal
65% of that.
Pratik
60 to 65% of the fee based was from gold. Right. The gold loans that it.
Sanjay Aggarwal
See there’s a lot of cross selling also a lot of gold loans which are sourcing are from EVA clients. Right. So we already done, you know, a lot of cross selling from the existing database. You know, a lot of EVA clients, employees, we are giving them gold loans also.
Pratik
Got it. Any delinquencies on the eva front for Q3 that we saw?
Sanjay Aggarwal
Yeah, yeah, yeah, yeah. Would you like to take that?
Gaurmeet Kaur
Yeah. Yes. So in the Q3 we had an NPA of about 26 lakhs. And that was driven by one pulp rate who underwent fundamental liquidity issues. That particular pulse rate we had forced operations with them. And out of 26 lakh from that particular. Out of 25 to 26 lakhs that we had we had reported to RGIs and NCAA. 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 covered.
Sanjay Aggarwal
17 lakhs is already recovered out of the 26 lakhs.
Gaurmeet Kaur
Yeah. And then we do have. So, so that is. That is the only NPA that we had and that was mainly driven by one corporate who started facing some liquidity issues.
Pratik
So in that particular case do we block them or do we give them an additional time to make the payments? Like what happens in that case with that corporate.
Gaurmeet Kaur
So they cannot avail further disbursement. So any further outflow of the money is false. And then selection efforts, then the collection processes are kick started and that is what is exactly happening with them now.
Pratik
Okay, understood.
Sanjay Aggarwal
But there’s nothing to worry about in this particular company because Tata and IBM also, their representatives are also on their board. They have a tie up with them. TATA and the IBM. So order 26 what we reported to as on 31st December to RBI. Something we have already recovered in the month of Jan.
Pratik
Okay, got it. Another question I had was the current run rate for EVA. Earlier it was I think 4 crore a month and then we had gone to 6 crores and the guidance was to get to 13 to 15 crores by FY26. So could you just give some clarity on where we are Right. Now.
Talin Aggarwal
Also in the last month we did about 8, 8 and a half cr worth of disbursements. Okay. With 180 corporates. So the idea that by the end of March we should be between 11 and a half to 12 cr.
Pratik
Okay, understood.Last question from the borrowing cost and balance sheet growth. How much of it can be supported without further equity dilution? If you can give some guidance on that, that would be really helpful. And what is the cost of funds for us currently? And post this rating upgrade, how do you see that, you know, helping us.
Sanjay Aggarwal
Debt equity ratios would be 0.2%. Right. You know, we are ample so for taking raising further debts already, you know, we’re in talks with now State bank and other banks also. Now once we have now got the investment grade reading now a lot of other banks should also open up. Okay. And we’re already providing a promoter to. A couple of more banks, both in. The private and the public sector. And we should restaurant from there. All right, thank you so much. After the meeting, I have a meeting with the general manager of State bank, you know, at 6:00′.
Pratik
Clock. Okay. I’m going to the CN. So in terms of as you mentioned when you said about revenue breakup, you said there’s a lot of cross sell income. You know, how should we look at when we look at like the revenue breakup going forward in terms of the mix, like I have tracked it historically, we have around 49, around 50, 50 mix between interest income and fee based income going forward, how do you see this split going? And like will it always remain at this level with the growth rates that you have projected? As an answer to the previous question.
Talin Aggarwal
Also going forward, we actually expect that Eva’s processing fee will increase to anything between 6 to 7%. So that would be our target going forward, you know, as all the segments increase or grow together rather and the cross sell is again booked as a processing fee or interest. Given the status of the loan, whether we have financed it on our own books or we’ve sourced it to other banks.
Pratik
Right. But in terms of our aspirations and growth, do you think that then the interest income would become a larger share? In terms of the mix, would it still be 5050 or we would have like a 70, 30 kind of a mix.
Talin Aggarwal
So again as we mentioned, we’re trying to group both our segments. Right. So if you say the interest income becomes 70%, my processing fee becomes close to 30% then so again that means my syndication business is not growing. Right. Which is, we think of it as both of them Growing both correct, Got it. Very correct. So I think the ideal mix here would be about a 46. 46 for both and another 8 for Eva.
Pratik
Okay, thank you so much. Thank you.
operator
Thank you. The next question comes from the line of Ankit, an individual investor. Please go ahead. Mr. Rankit, are you there?
Ankit
Yeah, hello? Am I audible? Yes sir, you are audible. Yeah. Hi, good evening. My question was on the follow up question on the NPA what went wrong with the company and like is, was it outstanding for a single month? The entire 26 lakh rupees.
Gaurmeet Kaur
I just explained that. So since it is an eva, since it is an EVA product, this was dispersal that was done in one particular month and when that particular whatever that we have disbursed, they could not pay on the required due date in the following month. The limits were false for them. They had some internal, they had some internal operational issues and which led to some financial crisis and they kind of told us in advance that they will take about two to three months to fix that up. So given that it is a very credible corporate and which has got some known names on their board, they took some time to do an internal reshuffling and internal rejig of their processes and their management.
And as committed by them, you know, once, once they are, they are able to stabilize their processes completely. They started to pay us. So out of 26 lakhs which is due, 17 lakhs has already been received and the remaining 9 lakh is expected to come anytime in February.
Ankit
Okay, so like they are not paying. Salaries even to their employees.
Sanjay Aggarwal
I think they’re paying their salaries also. That’s not an issue.
Gaurmeet Kaur
You know like, like I, like I said that they had a temporary issue which they had to sort and so the, so the organization is running. Well, it is still running. The employers are getting paid now this is a bulk payment which the corporate was supposed to do, you know, you know, post deduction from the salaries of the employees. This is, this is what is what is going to be coming to us now. So we no longer kind of do any, any more dispersals to the organization employees.
Ankit
Yeah, that’s correct. But like my question was on that EAGA model because if they are paying a salary, if they have money to pay the salary to the employees, then they need to first clear up the EAGA loans. Right? In the case they are not paying salary, it’s fine. If they are paying salaries and they are saying we will block this EVA loan payment, that is not.
Gaurmeet Kaur
Let me just, let me just answer it in A slightly different way. You know, when we, when you do a lending business, we are in the, in the business of, of taking calculated risk. And during the journey with any of the corporates or with the employee or with any individual lender, there can be opportunities where there is an inability to pay or there is inability to pay because of a temporary hiccup. So I’m sure that during that particular period they did have an issue in doing the full payment to their employees as well. According, you know, we are in constant touch with them.
They have, you know, they have already confirmed to us about the reorganization and getting the organization back on track. So my intent is as a lender, I look at two things. One, can I proactively, can I proactively ensure that I don’t lose more money and that we are able to do. As soon as there was a delay of more than five days and after talking to them, we understood their current situation, we blocked any further dispersal. The second thing is my capability to be able to collect the overdue money. Now since the group is renowned and they have intent to pay, they just asked us that they will take some time to make the complete payment.
Ankit
Okay. Okay, got it. Yeah, that was helpful. So like can you briefly tell what is current EVA run rate monthly and like where are we going in this financial year.
Talin Aggarwal
Also as mentioned earlier, so last month we did about 8 crores in disbursements in EVA and by the end of this financial year, by that is by March 26th, we should be anywhere around 11 and a half to 12.
Ankit
With the last question, with the gold loan increasing, with the value increase. So like would you focus more on gold loan as well or. We are.
Sanjay Aggarwal
Our mortgage business also doing pretty well. Mortgage syndication business is also picked up well. So all the three lines, we are focused on all the three lines. You know, some quarters, one particular product translates better than the other other two products that will keep on changing, you know.
Ankit
Okay, I’ve been following. Sorry. Yeah, yeah, yeah.
Sanjay Aggarwal
So we are looking at a steady growth in the top line as well as meeting bottom line. We’re on track for both. Now if you look at for the last seven, eight quarters, we are steadily growing our top line as well as the bottom line. You know, it’s the market. You know, thanks to the entire management team, you know, you know, my colleagues, you know, they have maintained steady growth both as the top line as well as the bottom line.
Ankit
Yeah, yeah, I have been following the company. So like when we were at 4 crore pad, there was a discussion future outlook, like around 8 to 10x. Then next year we did nine corrodes. Right. And this year we are a bit less on track or are we still on that path to reach.
Sanjay Aggarwal
Or if you look at it, you know, we already done top line because of 21 PR for the first nine months and you know, ECs also cross three. And I think that we should be, we should be crossing for any, you know, this thing is by this number four years we should be talking four plus. Okay. Yeah, yeah. It’s very important now we should be, you know, keep our delinquencies in control. We not get berserk, you know, in this particular market.
Ankit
So like do you see headwinds to grow or like, like because of a constrained like growth or like are we not in a. Come again, come again. Like my good micro. Properly. So like we are looking at growth and while controlling npa. Right. So is it we are not in a good overall environment to grow or are we just keeping additional checks?
Sanjay Aggarwal
You know, we have to be careful while you know, onboarding any clients. As I told you last month there was a lot of rejections. Hello. Yeah, yeah. Hello. Last month there were. Last quarter there were a lot of rejection. So we have to keep it, you know, in our kind of business, I think bottom line is much more important going the top line, top end. But to collect that money, Artisan collecting that money. I think the research got disconnected now. Right. Can you take that again? I think she’s got the disconnect. No, no, yeah, I’m, I’m on. No, no, I think. I’m getting her. I’m getting her. Yeah. But you know, in this particular speech of, you know, I’m on this line for the last 30 years, one thing I’ve learned not to run in this particular market, you know, our benchmark also, you know, we want to make a grow a company on the business. Like what Kotak and HDFC have done. They have been doing strategies, you know, keeping the, you know, very tight control on the NP and the portfolio which. They built, you know. It’s not. Yes, Yeah, yeah. Correct, sir. Thank you. And all the very best for the. Ethic Life model. You know, next month we receive our payments back. And this is the huge scope. If you look at Worldwide, there’s no reason why we shouldn’t go. In India, people don’t even know this kind of product can exist in the market. You know, where it’s like somebody else third person is even part of your salary.
Ankit
Yeah. In the West I think there is a weekly salary concept as well. So India is I think with picking up for this EVA thing.
Sanjay Aggarwal
Yeah, yeah. See us they pay you the salary after every two weeks here. Here we get once in a month. So you have to concept. You know I’ve had onboarded one pharma company. My boys have gone there to give the presentation. Employees were shocked over there to the extent of 20, 30%.
operator
Ankit, are you there on the call? Yes, yes, yes, yes. Hope you got your answers.
Ankit
Yeah, yeah, that was it from my side. Thank you and all the very best for the. Now.
operator
The next question comes from the line of Chirayu from CB Investment. Please go ahead.
Chirayu
Hello sir. Hope I’m audible. Hi. Yes. In last quarter we had two small. Delinquencies in Ewa I think 10,000 and 6,000. So what is the status on those?
Sanjay Aggarwal
One we have recovered, other is still pending. Others. Okay. I think the gentleman some is hospitalized. I think some medical distance problem. He said once I joined some business, some join some company. I’ll pay you off. 6,000 we have recovered.
Chirayu
Okay. The purpose was to ask about our how efficient we are in the collection. Come again, come again, come again please. Yes, yes, yes. We’ve 6,000. We’ve recovered. But balance 10 is NPA. But we do follow up regularly with them. Despite being an NP account we do keep up our collection efforts and we. Don’T have any further small delinquencies in this quarter in Q3.
Sanjay Aggarwal
Come again. Mr. Chirayu, we cannot hear you properly because your volume is very very low.
Chirayu
Okay, okay. Hope I’m audible now. Hope I’m audible now. Yeah, yeah. So any small delinquencies in quarter three apart from this big delinquency of operating
Sanjay Aggarwal
major is this. You know with the university only almost 70% we have recovered.
Chirayu
Okay. Okay. So no small delinquencies for many individual.
Sanjay Aggarwal
I think about three or four. Are there small ones actually when in case if the employee lives in Midway now then we recover directly from the employee. That’s not an issue. There’s a small one.
Chirayu
Okay, okay. Now sir, my next question is what is out? We have 180 active. 180 clients. So how many of them are active at the moment? 150. 150. Perfect. Also my third question is mainly for a bit long term. What is our vision for say next year and how are we targeting to improve the return on equity for the shareholders?
Talin Aggarwal
Also the idea is to one increase our debt. So as I mentioned currently a debt equity ratio sits at about 20% giving us ample Room to increase our debt leverage. And given that we have just been upgraded to BBB minus that improves our cost of debt as well. So as we pick more debt and deploy the same that will hence you know, help in improving our return on equity. And the idea going forward into the next stage to 1, increase our AUM from the current 103 crores to buy about 20, 25% being on the prudent side. And the idea is to then again increase the number of profit partnerships we have so that two things happen. One, the income increases. Second the cross sell increases.
Chirayu
Right. So sir, actually I’m asking this question that we have the option to increase the leverage. But as you mentioned that we are seeing the turbulence in the market so we are being cautious. So I mean, I mean so how aggressive or how cautious are we in this case? Because one side we need to increase more debt to increase the return on equity. But we also need avenues to deploy it so that our and our and want to keep our delinquencies under the target. So what is the vision of the management?
Talin Aggarwal
Correct, Correct. So as you mentioned, so again 103 crores is the current area as of the last quarter. So the idea is to increase it by 20 to 25% on a prudent, on the prudent side given the market conditions and accordingly we’ll pick up debt. Okay. Okay.
Sanjay Aggarwal
So we already have State bank is. The main lender and there are a. Lot of other lenders also we had done a debenture issue also and we already said to you we are already in touch with couple of more banks now. So that should not be an issue with us. Sure sir. Sure sir. Right. Right. 1.37 same. Look, you know, after we already reached 4, we reaching 4 plus this year, next year if all goes on, everything goes on track. We should be anywhere between seven to eight. You know, by these current standards only, you know, we don’t. Our top line has already reached 21cl in the first nine months.
Chirayu
Yes, yes, yes. Actually the business model is new in India now. So I think if you are cautious and it’s always better.
Sanjay Aggarwal
Doesn’t make sense. Let’s move on to other participants.
operator
Mr. Harsh. Mr. Hirsch, you are audible to us. Yeah, yeah.
Harsh
Okay. No, I. I didn’t hear you. Sorry. So, so. Hi sir. Thanks for the opportunity. So the growth seems to be good. We are, you know, progressively getting better, improving top and bottom line. But just wanted to understand like we have three business verticals, right. So we basically do msme lending we have. We are in EWA and then we have this thing. Gold loans. You were also talking about some mortgage loan. What was that? Exactly? So let me, let me take this.
Talin Aggarwal
Let me let. So let me, let me take this. So basically we have two verticals. Debt syndication plus lending. Under lending we have multiple products. MSME loan, EVA under syndication, we have multiple loans, Gold loan, personal loan, mortgage for other banks. The two major verticals happen to be debt syndication and lending. Now under these and multiple products and.
Harsh
Debt syndication accounts for fee based revenue, the fee based earnings and. Correct. And for the interest based, the. The revenue is bifurcated into two parts. Right.
Talin Aggarwal
So major because in lending we transfer cessn fee as well. Right. When dispersing the loan so that books gets booked on the fee based income.
Harsh
Okay, okay, understood. Also yeah, I think the, the space is really gaining, you know, traction now this the EVA state. Even though it is not a very huge opportunity if you calculate in terms of spam. But yeah, I mean I think Sandra sir said that Refine and GC are the only players right now in this space. But I would like to add a few more players that have recently come up, you know, in the EVA space, especially their salary. Say there’s five or fiddly.
Sanjay Aggarwal
I don’t know how they pronounce it but it was common. They are into personal loans.
Harsh
Yeah, they were formerly known as early salary.
Harsh
Now they’ve changed their rebranded funding the employees.
Sanjay Aggarwal
But in our case, repayment comes from the employer. They take directly from the employee. I think what, what sir wants to say. I think, I think,
Talin Aggarwal
yeah, I think what sir wants to say is the early salary and your salary. We have studied their model thoroughly. So what these guys do is they give a loan against salary wherein the repayment is made by the employee itself. By the employee themselves. Essentially the payment is not coming from the employer.
Harsh
But this is, this is highly risky. Right. So I would look back to Ankit’s question previously one of the two investors here, right. So he asked about if this thing is payroll linked, EVA is payroll linked and it is the employer who has to pay us. Now then then how are their delinquencies? Right, because. Because unless and until there are some solvency issues on the employer front, only then can we have this. But if they are giving out salary to their employees, they should actually first pay us. Right. Since we have rolled out loans to their employees on their behalf. So basically it’s just a salary. So. So I didn’t understand that part clearly. Pardon me, but if you would please take some pain to explain that.
Gaurmeet Kaur
I’ll just take it here. So they did have a temporary operational issue where it’s more than the solvency. They also delayed the payment of salaries. To their own children. Okay. So they had about two months where they have to. They had to do some internal recalibration and post that they had been able to kind of get it back on track. So they did have a temporary issue and that is why there was a. Delay in clearing the, you know, whatever was being.
Harsh
Okay, sure. No, thanks. Thanks for. Thanks for the clarity. One more question is related to the related party transaction. So. So I mean, why is Eclat. I mean, I’ll put it very simply. You can answer this. Why is Eclat not a wholly owned subsidiary of Emerald?
Sanjay Aggarwal
See, Emerald was about 81%. It has been since, you know, they were like that. Only 81 was held by Emerald and 12% is the family. Rest is with HNI. Yeah. Yeah. So maybe, maybe going forward. I cannot promise, but I think maybe because, you know, maybe going forward may make it 100 subsidy. But as of next, only 81 is by held by the MHULT and 12 is with the family and the balance 7 is with HNI.
Harsh
Yeah, yeah. You know, I’ve seen that. Seen the shareholding pattern, sir, I’ve seen that split. I was just trying to understand because this is a public company, right. So it makes more sense in order to, you know, operate through subsiding. Then there are.
Sanjay Aggarwal
Facing on that I think maybe going forward something, you know, in my curate. Yeah, yeah, yeah. Sure, sure. No, thanks. 27Th we’ll become eligible for NFP listing. Also after this 26 balance sheet and the March 27th balance sheet, we should be eligible for MSC listing or after that also.
Harsh
Awesome. That. That sounds great. Thank you so much for the opportunity once again. And I hope that we keep growing at the pace we are. Right. Thank you.
operator
Thank you. The next question comes from the line of Daljit Singh from Shishan. Please go ahead.
Daljit Singh
Good evening, sir. Hi. Good evening. Dalichi, Can you speak loudly? Yeah. I am asking why the smarter DSS need us as intermediaries. They can directly read the banks or NBSS.
Sanjay Aggarwal
So again, I can’t. Your voice is cracking. Please.
Daljit Singh
550. Why do smart DSS need us as intermediaries?
Daljit Singh
Why? Why what? You say why?
Sanjay Aggarwal
Mr. D, can you just increase your volume from your end?
Daljit Singh
Okay, okay, okay. Am I audible now? Yeah, it’s better. It’s better. Yeah. So I was asking why do DSS need us as Intermediary to connect with the banks.
Gaurmeet Kaur
What do you mean? You mean by. I will. Let me just answer this. We. We are one of. We are one of the biggest. The largest BSA to multiple banks as part of our acquiring business for these banks we deploy sub dsa. So given the size of these particular subds and quite a few of them are individual contributors. I don’t think they qualify directly as per the qualification criteria of the bank. To tie up direction. Employees of BSPs for sourcing corporates for business also span India.
Daljit Singh
I have one more question that normally the DSS at local level they are there dealing with customers they don’t earn more from. They earn more from the. They take commission directly from the customer. And we are not engaged in that kind of activity. We are just engaged in assessing of their own. Is my understanding correct?
operator
So there is. There is a lot of disturbance in your voice. Whatever the question was asked was not loud and clear to us.
Talin Aggarwal
Right? I think 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. Yes, Mr. Dasi. Okay. Thank you.
operator
The next question comes from the line of Shubham Gupta, an individual investor. Please go ahead.
Shubham Gupta
Hello. Yes. Okay. Hello sir. So just wanted to check like with this RB with RBI cutting down the rates, how will this impact Emerald Finance? Like how will it impact the growth journey of Emerald Finance?
Sanjay Aggarwal
Yeah. Cost of. Cost of borrowing will go down with that now and it should possibly affect our profit margins. Will be good for us. Further our cost of borrowing go down with that. Okay, okay.
Talin Aggarwal
Okay. Given the current. If I may just stay extended. I think given the current report rate which sits around 5.25 I don’t think the RBM will reduce it further. It is on a historic low given India’s rates. You know, pre covered.
Shubham Gupta
Okay.
Talin Aggarwal
Okay. So this is like if it reduces. More then it will be only positive for you. Okay. Okay. Okay. Thank you.
operator
The next question comes from the line of Rohit Arora, an individual investor. Please go ahead.
Rohit Arora
Hello. Yes, you are audible. My question has already been answered. Sure. Thank you.
operator
The next question comes from the line of Pratik from Code Advisors llp. Please go ahead.
Pratik
Yeah, I had a follow up question in terms of our monthly transacting users for eva. I think it was historically like. Should we get an update on that? I think last quarter we were at 2400 or 2500 monthly transactions just growing at 10 15%.
Talin Aggarwal
Yeah. Correct. So we reported 2400. Right now we are close to 2900 to 2950. Okay. So. So it equivates to roughly 13 to 14 of our entire user base.
Pratik
So the entire employee base was around 17 to 18,000 across employers for Q2 if I’m not wrong. So that would be roughly. You’re saying.
Talin Aggarwal
That is right now sitting at about 24,000.
Pratik
24,000. Okay. Another question in terms of cost of fundraising, I asked this but I think it got missed. What is the borrowing rate for us? I think it was 10.95% historically.
Sanjay Aggarwal
Yeah, yeah, it’s a 10.9. I think it’s a downward vision six months. So I think in a month or two they’ll be revising it onwards. Okay. You know we send upgrade in our meeting also. We should go down. Understood. And waiting for fresh meeting. I’ll be meeting them to today evening. So I think I’ll speak to them both for increase and as well as increase in the interest rates.
Pratik
All right. And last question on the gold loan, the numbers, if you could just give an updated number. I think I missed in your opening remarks you had mentioned. If you could just repeat that.
Sanjay Aggarwal
Come again, Come again. Can you repeat again please?
Talin Aggarwal
Yeah. So in the last month we did 115 crores in gold loans indication alone. And in the last quarter we did 300 crores in gold loan. 400 crores overall. So 400 overall last month was 150.
Sanjay Aggarwal
Good loans. Actually we had Reform Exchange 105 crores. Once we did the, you know, the first of Jan. I think after that you will get the updated figure. It was 115. Around 115 crores. Okay, got it. This month also is my track for that. Maybe there’ll be a slight increase only in this month also in Jan. Okay. We already cost 115crores in this month in Jan for gold loans
Pratik
and for. The 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?
Sanjay Aggarwal
Yeah, yeah, absolutely. Absolutely.
Pratik
Okay. Okay. Thank you.
operator
Thank you. The next question comes from the line of Raj and individual investor. Please go ahead.
Raj
Hi, good evening. Actually I just wanted to ask like how much from the revenue, like how much Percentage is of EVA product currently?
Talin Aggarwal
4 and a half percent on a consolidated basis.
Raj
Okay. And how much you are planning to do in like let’s say after a. Year, about 6%, 6 to 7%. Okay. So actually like we are doing this EVA stuff since I think one year and still you know, after a year it will be around only 6%. So any plants on you know, rapidly expand.
Talin Aggarwal
Oh so the idea here is there have been two reasons for this. One, the entire company is growing its own. So all our verticals are going so the denominator keeps increasing. Second, the idea behind launching EVA was to not only generate remain from EVA but to cross sell. Now the entire cross sell revenue gets poked under processing fee. Under the processing fee mix. So standalone from EVA itself the target is always about 6 to 7%.
Raj
Okay. And if you look at a gold loan business also a lot of the cost is coming from that EVA business only. Okay. And we have like some unlisted competitors right. For the SIVA product in the. Yeah. So like how much is you know market share for the product in India?
Talin Aggarwal
The numbers are not you know, publicly available. Given that all of these are private limited companies. So they’re not mandated to give the exact revenue split or the numbers as we are mandated by the SEBI guidelines. But as per our last estimates we were close to 15%. 10. 15% in pure EBA. Okay. Yeah. And, and everything part are like we do this con call after I a day or two right after the result. But this time I think we have delayed it more than two weeks. So any because the management was traveling. The management was traveling internationally. Hence the you know the. What do you say the time zones weren’t magic. Hence we had to push it till the management was in back in the country.
Raj
Okay. And we are planning to do the Conquer site in the future. Like let’s for another one or two years. Right?
Talin Aggarwal
I mean absolutely. We don’t see any reason, we don’t. See any reason not to. Okay. Yeah. However. However, if you have any. Yes only please continue.
Raj
Yeah. Currently like how much fund we have unutilized and how much like FBI we. We had raised the request to limit some to raise the limit of debt right. From SBI.
Sanjay Aggarwal
And check up with them applying for other banks also. Now this is only we received the updated this thing from. So we are talking to other banks also. We’re looking looking at one or two more options also you know other than bank line. Okay. Let you know.
Raj
Okay. Yeah. So how much percentage of funds are unutilized currently? Yeah. I think the sir wants to know what is our cash in bank.
Sanjay Aggarwal
Yeah. We have. Yeah. Because you know to grow we will have like we will require more funds. Right. To grow. That’s not an issue. That’s not an issue. That’s not an issue. That’s not an Issue. Yeah. Okay. Monthly income. Discussion. We have adequate funds at our disposal. Plus we have the ability to raise more. You know, given our debt equity ratio only sits at 20 and NBFCs are allowed as per the RBI guidance to go up to 600%. You know, 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 fund. So as, as and when we have the need to raise funds, we can do it very easily in. In the form of debt.
Yeah. And comparatively also gives confidence to the market. Now Christine was there almost a one and a half month, you know, dotted it. They checked the entire system. They checked our books also. And you know, on all the parameters. That gives a lot of confidence to the market also. Once they agree upgrade.
Raj
Right, right. So this EVA business is very less risky, right. Compared to other loans. So why are we not you know like rapidly, like too much rapidly increasing this thing. We have only like 24,000 employees, right?
Talin Aggarwal
I think there’s better. Again just to add to that, there are two issues now. So one is customer awareness. So as I mentioned earlier that you know, within the Indian market there are only three to four competitors. So again the market awareness is not much. So one is market awareness. And we are expecting that in the next two to three years as the competition will increase and including us and our current competitors, the market awareness will. The market itself rather will grow at a decent rate. Second, the market’s very turbulent in. In the current time and we have string. We have tightened our credit policies as well just to avoid any risk.
Raj
And how is this public sector companies are responding to this. Your product.
Gaurmeet Kaur
I think, I think. Please. You have to understand that a lot of public companies, the bank, the armed forces, the state government and the central government is outside the preview of the India product. The public sector companies have their own robust internal employee loans and funding ability. There are multiple privileges that run to them. And since they are also governed through different company compliances, that is also not our target set. So a person like Itakkas and exit rows and accentures on the world. They do have their own internal line of budget which is available today.
Raj
Okay, okay. Okay. Thank you.
operator
Thank you. The next question comes from the line of Rohit Junaija, an individual investor. Please go ahead.
Rohit Juneja,
Hi sir, I just wanted to understand. Are we on plan to onboard 250260 year companies by the end of this year?
Talin Aggarwal
Rohit, we are really working hard on that, you know, but you may not maybe miss, you know, by 2030 corporates Mr. Target. But you know, as far as the volume is concerned, you know we are almost on track for that and overall growth is there. So overall growth target we should meet maybe, you know, 250 may not be able to reach maybe in next quarter of the next financial year. But as far as the overall top line, as the bottom line growth is concerned, we should be I think on target.
Rohit Juneja,
Okay. Okay, sir. I think that’s the only question I have. Thank you and congratulations. Thank you.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. Ronak for closing remarks.
Ronak
Thank you for joining the call of. Emerald Finance Ltd. Should you have any queries you can drop in email to Research. Thank you all for joining the call. Thank you.
operator
Thank you on behalf of Kirin Advisors Private Limited. That concludes this conference. Thank you for joining us. And now you may disconnect your lines. Thank you very much. Bye bye. It.