Emerald Finance - Revolutioning employee finance (EWA)

Stock Opportunities Untested - but worth a good look
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Result out. I was expecting at least 0.7cr increase in revenue from the previous quarter. If they don’t increase their pace of sales growth as well, then the increasing base will decrease their growth rate at some point. Maybe that’s why it’s not being given high PE as of yet. Hoping they comment about their revenue targets in the concall.

Holding and biased

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March results usually has more other expenses. Probably some annual charges. Usually June revenues in the past as well have not been muvh of an improvement as compared to March. You will see degrowth in 2023 and not as much robust growth in 2024 which is like 2025. March 2024 results also seem to be worse than normal (Flay YoY) which would have helped June 2024 looked optically better. So all in all maybe the results are quite decent.

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Emerald Q1 Update.pdf (1.5 MB)

Result press release

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New information from the latest concall, I might have forgotten some points

  • Investors themselves are providing them with new clients. Several CAs who are invested have referred some clients to them.
  • Around 95 corporations have joined till now, 250 targeted this year, 1000 long-term.
  • 85% of companies are active.
  • A few corporations paid late, so they deactivated them — no risk to be taken.
  • 2 EWA NPAs amounting to around ₹50K — not writing off, will recover this quarter.
  • The NPAs are contactable and not AWOL. It has been over 90 days since delayed payments.
  • When asked about their recovery team, the MD said: “2 log hain, free baithe rehte (as no NPAs lol), poore din 2 NPAs ko call karte rehte.” Then their Chief Risk Officer added that they have hired an outside firm, but as of yet, they have not been required to utilize their services. But they have a system ready.
  • Referral system is nice, snowballing, word of mouth (my opinion).
  • ₹2 Cr cross-selling done in the last quarter (or month?)to EWA customers. EWA breakup stands at 5% of revenue and should go up in the future.
  • Currently ₹4 Cr is disbursed per month. Target: ₹15 Cr disbursal/month via EWA when all 250 are signed up.
  • In April 2027 they will list on NSE — this was another reason for dilution to meet the prerequisite of ₹75 Cr equity (for at least 2 years)
  • Debt-to-equity to be maintained at 1:1
  • “Not rocket science lol” — 8x PAT growth expected by FY27. Didn’t change or update their targets. Said they are on track of the projected target. Their role models are HDFC and Kotak Bank. They understand the NBFC market right now and do not want to take undue risks.
  • If they want, they can double their loan book within a couple of days, but they are very risk-averse.
  • Unsecured personal loans given to EWA customers are for 9 months — need more information on this.
  • They are to release new mobile application in next quarter. It is on line with their competitors, and very simple to use. “Praised by a very senior banker in Mumbai”. Whatever is on their webpage, getting on app.
  • ROE will increase slowly — no numbers were given.
  • Need more information on their workforce, offices, geographies, and target cities.
  • They provide up to 50% of salary as EWA and can’t increase it further as per the Wages Act. The 50% is given by the company itself; any upward of 50% will have to be provided by Emerald Finance, which is a risk they don’t want to take.
  • They said mostly the money is lent in the 2nd half of the month, so effectively they lend money for around 15 days only. ( When converted to an Annual Percentage Rate (APR), the cost of the service typically ranges from 18% to 30% - ppt)
  • No plan for further dilution of equity.
  • They also said that other NBFCs acquire their customers at a loss, whereas they are earning on their customer acquisition part as well (EWA).
  • They said that their system is fully vertically integrated (Proprietary tech stack ensures seamless salary validation, KYC, and disbursement - ppt)

PPT-

  • Targeting a transacting customer base of 4000 monthly users by end of FY26 (ppt)
  • Target of 250 corporate clients by the end of FY26
  • 6.5+ lakh retail and MSME borrowers across 200+ cities reflect deep market penetration (ppt)
  • Tie-ups with 40+ financial institutions via subsidiary enhance origination capabilities without direct balance sheet stress. (SBI their biggest partner, lends 10% -concall) (ppt)
  • Focus on tech partnerships and DSA-led model allows growth with minimal capital intensity – asset-light model (ppt)
  • The service has no interest charges; instead, a service fee of 1.25% to 2.5% is applied at the time of the transaction, varying based on agreements with the Corporate Employer. (ppt)
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Why trade of shares of the company is restricted, anybody knows ? And when it could be normal ? No announcements till, by the company

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It’s based on volatility, criteria set up in the ESM framework. I am expecting this script to get out of the restrictions soon, should be out of the framework by end of this month

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Investi Global further sells its stake, now stands at 2.81%

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Where did you see this? Can’t seem to find on screener under recent bulk/block deals.

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exchange filing
EB47DA29_2ED9_4F76_B75B_2E9DB4F75CDC_102948 (1).pdf (1.0 MB)

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It’s out of ESM 2 and now trading under ESM 1

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I was reading about the company, want to know more about promoter quality. Any idea? - looks like the promoters have multiple listed business like indogulf corpscience and SPL industries and other companies, books like big family or am I totally mistaken?.

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Actually if you are going by Screener, then you need to be careful. Thing is Screener matches with names and sometimes they are 2 completely diferent people. Sanjay Aggarwal are also 2 common names so that also contributes. Do refer to the below

https://www.zaubacorp.com/SANJAY-AGGARWAL-02580828

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There are 2 different Sanjays. Emerald is this one: https://www.linkedin.com/in/sanjay-aggarwal-03318548

Not a part of any big family.

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Gold Loans aggregating to ₹40.00 Crores (Rupees Forty Crores only) during the month of August 2025.\

Why disclose this random piece of incomplete information at this time? Data for one month, and that too only for gold loans. I could not even find what fee they charge for gold loan distribution

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Nothing about shubhbank is mentioned in the annual report. Is it really a subsidiary?

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Annual report is out, they earn a revenue of 1.25% on distribution of loans for other banks. They distributed 900cr loans in FY25.

So 40 cr worth gold loans distributed in just one month. Extrapolating that number, 480cr for FY26. And this is just gold loans, which they mention at last of their loan products ( saw in past 4 ppts ), so I am assuming it forms the lowest chunk of their DSA revenue (don’t know the industry norms). So i guess it was a bullish sign from management, to boost investors confidence.

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NOTICE IS HEREBY GIVEN THAT 42ND ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF M/S
EMERALD FINANCE LIMITED WILL BE HELD ON TUESDAY 30TH DAY OF SEPTEMBER, 2025 AT 10.00
A.M. AT REGISTERED OFFICE AT SCO 7, FIRST FLOOR, INDUSTRIAL AREA, PHASE-II, CHANDIGARH
160002

If anyone who lives near Chandigarh could attend the meeting, and share pointers. I don’t think they will do the video broadcast

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Board meeting 15 Oct 2025 to approve results for quarter/half ended 30 Sep 2025; trading window Oct 1–17, 2025.

I am expecting quarterly EPS to be 1.1, anything less would make me sad :(

Also regarding the gold loans information they put out before, it’s the trend- gold loans are doing really well in NBFCs.
Mangement is good, making sure investors know of the tailwinds. Commentaries across the companies is indicating that NBFCs have bottomed out.

Edit 08/10/25-

Disbursed over ₹44.00 crore gold loans in Sept 2025; started sourcing in Andaman and Nicobar Islands

10% growth month on month in gold loans disbursement

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Well Quarterly EPS has grown as has been the case since many past quarters now but it’s still significantly below your expectations of 1.1. It’s 0.862

Cash flow is a concern.

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Consolidated EPS is 1.04, which is still falling short of my expectations. Their rate of sales increase is decreasing, possibly due to an expanding base and management being cautious, not disbursing many loans to avoid bad loans. Even if they increase their margins, I wonder will they even be able to maintain it when they start focusing on sales growth.

TTM EPS is 3.46
so at PE of 28 price comes to be around 97.

Check the quarterly sales growth trend, I dont like it at all. I did not buy this scrip an year ago for this kind of sales growth. I might cut my position, lets see what management say in concall

Quarter Sales (₹ Cr) Absolute Increase (₹ Cr) QoQ Growth (%)
Jun ’22 2.21 — —
Sep ’22 2.39 +0.18 +8.14%
Dec ’22 3.05 +0.66 +27.62%
Mar ’23 3.87 +0.82 +26.89%
Jun ’23 2.78 −1.09 −28.17%
Sep ’23 3.24 +0.46 +16.55%
Dec ’23 3.42 +0.18 +5.56%
Mar ’24 3.89 +0.47 +13.74%
Jun ’24 4.39 +0.50 +12.85%
Sep ’24 5.00 +0.61 +13.90%
Dec ’24 5.72 +0.72 +14.40%
Mar ’25 6.45 +0.73 +12.76%
Jun ’25 6.71 +0.26 +4.03%
Sep ’25 6.90 +0.19 +2.83%

I don’t think the market is going to rerate the scrip again anytime soon, though it will be on the day they report good sales growth.

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