Lendingkart, a leading non-banking financial company (NBFC) with specialization in work capital and business loans to small and medium enterprises (SMEs) in India, today announced its results for the fiscal year 2024 (FY24). The revenue from operations is ₹1,090 crore, which has registered a healthy growth of 36% in FY24 as compared to ₹798 crore in FY23. However, this revenue growth spelt gloom for the bottom line of Lendingkart, which witnessed a 6% contraction in PAT at ₹174.92 crore versus ₹185.93 crore in the previous fiscal.
PC: CXOToday.com
Revenue growth was on account of an exponential jump in co-lending, which now accounted for 54% of the operating revenue. Revenue through co-lending activities rose by 88% to ₹591 crore in FY24. On the other hand, interest income on term loans contracted by 2.86%, standing at ₹407.81 crore. However, the commission income increased very sharply, growing 34 times to ₹22.58 crore. The firm also had ₹69.15 crore from other operating activities. So when the non-operating activities are included, Lendingkart total revenue was ₹1,217 crore for the year.
While the revenue growth has been quite healthy, Lendingkart’s margins did take a hit because of escalating costs. Total cost rose 49.4% to ₹1,022.7 crore in FY24 from ₹684.4 crore in FY23. Some of the prominent contributors here have been increases of 16.82% in the finance costs up to ₹293.53 crore and 75.70% rise in the employee benefit expenses at ₹199 crore. Legal expenses too rose 58.25% to ₹125.62 crore.
The company’s net profit margins are affected by all these increasing costs, especially in the form of employee benefits. Lendingkart’s return on capital employed and EBITDA margin were at 23.33% and 44.39%, respectively, reflecting the problem arising from an increase in the overall cost of operations.
At an operating level, impairment loss other than credit increased significantly at ₹171.67 crore for FY24 compared with ₹67.12 crore for FY23. Such impairment losses are excluded from profit but provide an indication of potential risks and challenges in managing the loan portfolio.
Lendingkart has reported cash and bank balances of ₹768.5 crore along with current assets of ₹2,110 crore in FY24, which is ideal for liquidity as it continues to compete in its lending business.
Lendingkart’s ownership also saw a significant change recently, with Temasek’s Fullerton buying over the company in a distress sale. The company’s valuation thus recorded the most drastic drop with this acquisition, from its peak of $690 million to approximately $100 million. This implies that the company’s future strategies and operational effectiveness will have to be judged heavily as it proceeds to submit its FY25 reports.
While Lendingkart has shown remarkable revenue growth in FY24, the decline in profit underlines the difficulties of challenges in operational cost rise and market pressure. The fortunes of stakeholders will depend on how the new ownership structure at Lendingkart takes this transition and brings stabilization to its financial health through the strategies it executes for the next fiscal year. The focus will lie on how effectively Lendingkart manages expenses to continue expanding its lending operations to SMEs across India.
