Eps is 1.04. Cash flows will be negative as they give out loans
2 Likes
I think most of us are in this company for their EWA product. Itâs true that unlisted EWA companies had got stupendous valuations by VC firms. We need to look at this company as a mix of an NBFC as well as a Fintech company.
That being said, the most important metric is to see how their EWA product is ongoing. Are they meeting their expectations? They had guided for 15 Cr per month disbursements in the near future, so how is that going? Q to Q comparisons are quite futile. Hopefully the upcoming concall, presentations and transcripts prove handy.
Secondly we must also account for the fact that Emerald Finance has derated quite a bit and atleast according to me it does not deserve traditional NBFC valuations given itâs tech focus and low NPAâs
5 Likes
But since they had given ambitious targets for their EWA vertical as well it would be worth tracking how they are doing on that front as well
In the end EWA is just a customer acquisition tool, they have mentioned it in concall as well. Itâs all about cross selling. I believe now the scrip will grow as per the EPS. Will stay invested.
1 Like
Yup. But cross selling will take time. See EWA is special in the sense that it is almost compleyely risk free with the risk falling only on the corporate failing rather than an employee not paying. The will want to scale their ewa first and validate the various employees before wanting to cross sell. So for now, priority is scaling their ewa
2 Likes
They announced Q2 results yesterday and on the same day the companyâs internal auditor resigned citing âpersonal reasons"
The timing feels a bit unusual.
2 Likes
We would like to inform that the said conference call for Quarter 2 of the Financial Year 2025-26 has
been rescheduled to Friday, October 24, 2025, at 4:00 P.M. due to certain unavoidable
circumstances
Also this, all speculation now. There has been tremendous selling pressure as well for past few weeks, someone offloaded.
Personally Iâm not a fan of the management. EWA is a fantastic customer acquisition tool but so far their execution has been sub par. In the hands of a good management the company would have been in a hyper growth phase by now. Emeraldâs acquisition by an enthusiastic management is my fantasy 
2 Likes
Itâs unlikely they will give up stake or get acquired. From their previous concall, its clear they have big ambitions- calling Kotak and HDFC as their role model, listing on NSE in 2 years, etc
Family run business, with succession plan already in place. Son of the promotor, Talin, has done BBA from NMIMS, and PGP(FB) from ISB. That dude sits in concalls, itâs like he being given live lessons how to manage the company.
But i still believe they should bring in some experienced people of the industry who can help them scale in time. Sooner or later other NBFCs would also roll out their EWAs, they should not loose this first mover advantage of being a full stack fintech company+NBFC. Although they did reel in some industry veteran during their overpriced preferential issue at Rs 131 ( Rajesh Jain, founding partner KPMG in India and Africa and Vishnu Sultania, rich corporate experience and Saint Capital Fund). Also they have board of just 4 members, with no independent director.
2 Likes
Emerald disbursed a total of 115+ Cr of Gold loans in Q2 FY26 (31Cr in July, 40Cr in Aug, 44Cr in Sep).
I was going through this recent article regarding the changes made by RBI with regard to gold loans. New RBI gold loan rules: What borrowers need to know about repayment, auctions & valuation - RBI amends gold & silver lending rules with effect from Oct 1, 2025 | The Economic Times
Can someone please elaborate how this affects Emeraldâs business? Thanks!
hi, in the latest concall the management said theyâre using EWA to cross sell, but theyâre cross selling loans to their partner banks, and not taking it up in their books.
Does anyone know why this is?
the only advantage of EWA is cross selling, and theyâre passing on the benefit to the partner bank instead of taking advantage of it themselves.
I think Iâm missing something here, can anyone point it out ?
TIA
1 Like
Taking advantage of it themselves also entails taking risk on their balance sheet. Emerald Finance strength over other NBFCâs is their tech first approach. I feel they should keep it this way. Market always loves certainty and keeping risk off balance sheet sure helps and that is how you can get those premium tech valuations over nbfc valuations
4 Likes
Sure this is less risky..but my investing thesis was the operating leverage that would kick in in their lending business for customers acquired through EWA.
Any other NBFC would have to shell out a good sum of money setting up offices and staff in different parts of the country to acquire customers, while Emerald could make this happen by just onboarding customers to EWA.
Getting commission from their partner banks wonât go very far imho.
I guess Iâll wait a year or two and see how this pans out.
3 Likes
Concall q2 intesting stuff-
âDebt-to-equity is 0.2. So we can easily sustain 0.5 to 1x of the equity. Currently, itâs only 0.2.â â ROE comment.
âOur return on capital employed, as shown, is 18.4%, and ROE is around 14%.â (Earlier values were 18% and 13.8%, respectively.)
Investor Changes:
Investec Global has completely sold out. They were restructuring their corporate setup in Mauritius, which is why they liquidated all holdings. They are now fully out. There are now two foreign investors remaining after Investec Globalâs exit, with only one holding more than 1%.
ESOPs:
Some KMPs hold 80,000 ESOPs.
Shareholding Changes:
Individuals holding nominal share capital in excess of âš2 lakhs increased from 81 in the last quarter to 83.
The number of shares in this category rose by 5,74,519 â meaning, on average, both of these new investors loaded up almost âš2.3 crore worth of shares at an average market price of âš80 in Q2.
The average holding of the other 81 investors comes to around 57,849 shares (~âš46 lakh worth at âš80 per share).
There has also been an appearance of Vishal Sudhir Kampani in the shareholding pattern â most likely an existing investor who bought more this quarter, taking his holding above 1% (345600 worth 2.76 cr @80 ). Kampani is the Vice Chairman and MD at JM Financial (âš16,000 crore market cap) and is probably the same âMumbai bankerâ Sanjay mentioned in the previous concall â the one he showed the app to and received positive feedback from.
There was intense selling by Investec Global, which was decently absorbed around the âš80 levels â most probably by these investors.
Notable Concall Attendees:
Gaurav Didwania (Qode PMS)
Saptarshee Chatterjee (Groww AMC)
Akash Jha (Fin influencer)
One of the investors cheekily remarked, âThere are already three Aggarwals on the board â any non-Aggarwal joining anytime soon?â
Sanjay replied that the third Aggarwal isnât from the family, lol.
They reiterated their role models: HDFC Bank and Kotak Mahindra Bank. An additional interesting comment: âThis particular product (EWA) is to us what consumer durables are to Bajaj Finserv.â
At the start of the concall, the MD summarized results saying, âWe are confident of sustaining our growth momentum and building Emerald Finance into a scalable and, more importantly, resilient financial enterprise.â
If they play their cards right, this script can be good wealth creator
TAM (Total Addressable Market):
He mentioned that couple Indonesian companies have an active customer base of about 100,000, while Emerald is just at 2,400, despite India being a much larger market.
Operational Update:
They incurred a single time cost for setting up their EWA office (how were they operating without it till now, lol). They also said that their sales connections and referral networks are now maturing, which explains the higher onboarding rate of corporates compared to the previous quarter.
Talin was quite vocal and well-informed during this concall; good prep done.
(invested, formatted with chatgpt)
7 Likes
Emerald Finance Limited has entered into a
partnership with Muthoot Fincorp Limited, under which Emerald Finance Limited will act
as a Lead Sourcing Agent for Gold Loans and Personal Loans across India (PAN-India).
This strategic partnership is aimed at strengthening the Companyâs presence in the financial
services sector and expanding its reach across the country.
This is BIG
4 Likes
6 Likes
Key points from the Q&A ( https://www.youtube.com/watch?v=2AWbpgHn4gE )
- capable of 20k transactions per second
- Robust data analysis
- HDFC wont give DSA ship easily, thatâs how Emerald becomes middleman between big banks sub DSAs
- 1.5 to 2% fees for EWA are mainly based upon the risk profile of the employer. The higher the risk, higher the fees
- Edge over other fintech is that Emerald is an NBFC. This complete integration of the supply chain allows EWA to be offered at lower rates of 1.5 to 2%. Other fintechs wonât be able to sustain lower fees. It was 2.5% 4% when emerald finance tied up with Rainpay (US fintech) as an NBFC.
- 12% engaement rates from the entire empoylee base who are using EWA at any given point, started with 8% should stablize eventually at around 15%.
- EWA is famous in US because of inherent spending nature of the people, whereas in India it is very conservative and savings type.
- the Indonesian companiy has 7,50,000 employees onboarded. And India has âmuch much much bigger market, we havenât even scratched the surfaceâ
- After signing up with the companies, they do host many info sessions for the employees.
- MSME loan book is mostly from North India, 90% of the loanees are businessmen with ticket size of about 30-40 lakhs and giving yields of an average around 18%.
- One of the dudes interestingly pointed out that we report our NPA in absolute terms, whereas other NBFCs give % NPA. The risk for this vertical is quite less, because of stringent employer assessment which is based on many factors such as stable, at least 3-year-old, profitable, CIBIL profile of the comapny itself that means no defaults, write offs and settlements in past 1 year, empolyee turnover (they have rejected many coporates with high employee turnover even if their finanacials were very good- example hopitality sector) paying salaries on time, working capital needs are met regularly, sizable population, and less attrition rate. Also, the risk of non-repayment is from the company, not individual employees (25:00 risk assessment strategy)
- Going forward, they want to target 150 200 corporate tie-ups every year, till they reach 1000 1500 corporates.
- They have teams in Mumbai, Delhi, and Chandigarh, and major sourcing is from here only. Their expansion strategy for the EWA is to focus on 130 cities and tier 1 cities that already have their DSA base, an easier sales pitch, and operations. Other than these areas, an expansion call would be taken within 1-1.5 years. Someone recommended a region-wise breakup in the concall presentation. They mostly include SMEs to mid-sized companies having employees less than 1000. They prefer 10 '1000 employee companies vs '1 10000 employee company as risk is diversified and sales cycle is much faster. There is also a funding cap for a single corporate (25 lakhs) for risk diversification. They have certain no-go industries (example collection firms, brokerage, stock trading ) as well as some restricted industries.
- Salary range of active transacting customers - 50,000 to 70,000 per month. Even the employee is earning way higher, they only provide up to 1,00,000. So there is per per-employee cap as well.
- SRMS platforms, they need to check with whom they are integrated (Talin should have known this, at least some top-of-the-head names)
- The growth pace has moderated due to a growing base. Their major growth driver would be cross-selling, especially from their own book or Shubhbank. Also, their technological know-how is great for evaluation.
- They are open to the market of gig workers such as zomato, swiggy guys. They need to partner up with the parent company first and set up some guardrails for their product before partnering up with them.
- Tech costs and development are debited monthly in the books, operational expenses.
- 49:05 The CRO herself admits the book size âis not really hugeâ (although was in context of segregation in different sectors)
- Long term goals FY 28 29, 30-40 Cr/month disbursements leading to 5-6 crore revenue from cross-selling (51:50). More focused on 150 corporate objectives as they should be. Hinted at something new coming up regarding their tech soon (52:20)
- Shubhbank hits on the site? âwill have to check with analyticsâ
- Their workforce of full-time employees comes to around 50-60 (including subsidiaries as well), such low number owing to their tech. The EWA withdrawals are all in real time, loan origination system to the management system to the bank, everything is API based and end-to-end integrated. After a withdrawal request, it hardly takes 10 seconds for the money to get transferred to the customer. Operational and technological leverage, and keeping their balance sheet as asset-light as possible, is their focus. They outsource some of their work which is not core to their operation to experts outside the company to keep the books asset-light. Only 7 employees have done 50 crore gold loan business, the highest efficiency in the industry.
- Random fact - NBFCs can borrow up to 7 times their net worth, current borrowing in 14 cr (0.2x of market cap). They can raise upto 35 cr debt (D/E of 1) but no problem even if have to go beyond. CRO stated they have laid out a systematic plan for the next 3 years, and utilization of equity/debt would be based on that.
- They have internal quarterly and annual targets in place; they donât want to share any numbers. ballpark number for reaching 1 D/E is 3 years, provided they donât raise more equity. That means they donât need so much debt as of now, it wonât get used, and will just rack up interest costs in PNL. (80cr equity, 14 cr debt) They are also aiming for a rating upgrade. I hope the market conditions get better so they reach their goals faster.
- Shubank is housed under its subsidiary Eclat. It is 81% owned by Emerald Finance, 12% promoters, and 7% outside.
- 1:06:00 Eclat and reliable companies are used for short-term funding, acting as middlemen between big institutions.
- Invoice discounting came up; it will act as an additional product they can offer to corporates. They focus on products that synergize with EWA as they wonât have to do DD of corporates again and again before offering them other products- more margins.
- Some decline in promoter holding was due to equity dilution, as new shares were created
- Saint global, mnievra capital, rajesh jain, vishnu sultania (heading Cadbury in Russia, heading big tech company in Israel, good port) not mentioned Vishal Sudhir Kampani (JM financial promotor and vc) as he popped up in shareholding pattern
- professional fee basis for referral and bringing in businesses, they pass on some part of the revenue earned to people who bring in corporate for tie-ups.
(Pardon the formatting, invested and biased)
7 Likes