Lendingkart, the Ahmedabad-based fintech firm, posted a 36% increase in revenue from operations in FY24, reaching ₹1,090 crore. However, profit after tax (PAT) slipped by 6% to ₹174.92 crore, highlighting challenges despite growth. The firm, recently acquired by Temasek’s Fullerton in a distress sale, saw its valuation plummet from $690 million at its peak to $100 million in the deal.
Revenue Growth Fueled by Co-Lending
Lendingkart’s revenue surge was driven largely by its co-lending business. This segment contributed 54% to the operating revenue, growing by an impressive 88% to ₹591 crore in FY24. The co-lending model, designed to share risks and benefits with partner financial institutions, has been pivotal in expanding Lendingkart’s reach among MSMEs.
However, not all revenue streams shared the same upward trajectory:
- Interest on Term Loans: Declined marginally by 2.86%, totaling ₹407.81 crore.
- Commission Income: Skyrocketed 34 times to ₹22.58 crore, showcasing the company’s diversification efforts.
- Other Operating Activities: Brought in ₹69.15 crore, rounding out operational revenue streams.
Non-operating activities added ₹127 crore, taking Lendingkart’s total revenue for the year to ₹1,217 crore.
Expenses on the Rise
The company’s expense sheet tells a story of rising costs across key areas:
- Finance Costs: Increased by 16.82%, amounting to ₹293.53 crore.
- Employee Benefits: Spiked 75.70% to ₹199 crore, reflecting higher workforce investments.
- Legal Charges: Jumped 58.25% to ₹125.62 crore, possibly due to compliance and restructuring efforts.
Altogether, total expenses ballooned by 49.4% to ₹1,022.7 crore, compared to ₹684.4 crore in FY23. These rising costs, especially in employee benefits, have pressured profitability, with impairment losses excluded from calculations for a clearer view.
Expense Breakdown: Highlights
- The company’s expenditure per rupee earned stood at ₹0.94 in FY24.
- Impairment losses of ₹171.67 crore in FY24, though excluded, signal challenges in asset quality management.
Key Metrics and Profitability
Despite revenue growth, profitability metrics took a hit. Lendingkart’s PAT dropped to ₹174.92 crore, down from ₹185.93 crore in FY23.
- ROCE: 23.33%
- EBITDA Margin: 44.39%
The firm’s current assets stood at ₹2,110 crore, while cash and bank balances totaled ₹768.5 crore, indicating adequate liquidity to navigate short-term obligations.
Funding and Valuation Challenges
Lendingkart has raised ₹3,217 crore ($452 million) in funding to date from marquee investors like Temasek, Bertelsmann, Mayfield, and Saama Capital. However, the distress sale to Temasek’s Fullerton reflects a steep decline in investor confidence. Its valuation, once a formidable $690 million, now rests at a mere $100 million.
The reasons for this sharp drop are speculative but may be better understood when FY25 numbers emerge. For now, the rising operational costs and slipping profit margins paint a picture of a company in transition, balancing growth with financial sustainability.
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