💰 Financial Performance

Revenue Growth by Segment

The company operates as a single-segment investment firm; segment-wise reporting is considered irrelevant. Revenue is highly volatile due to dependence on trading in shares and debt securities, which led to a decline in revenues and profitability in FY22 and 9M FY23.

Geographic Revenue Split

Not disclosed in available documents; the company is headquartered in Mumbai, Maharashtra, and operates primarily within the Indian capital markets.

Profitability Margins

Net Profit Margin improved significantly from 66.65% in FY 2023-24 to 139.97% in FY 2024-25, representing a 209.01% favorable change. However, Return on Net Worth (RoNW) plummeted from 15.76% in FY 2023-24 to 2.98% in FY 2024-25, an adverse change of 81.09% due to lower earnings relative to the equity base.

EBITDA Margin

Operating Profit Margin is listed as N.A. in the MDA; however, the Interest Coverage Ratio declined from 22.02 in FY 2023-24 to 7.74 in FY 2024-25, a 65% decrease, indicating reduced headroom to service interest obligations from earnings.

Capital Expenditure

Historical and planned capital expenditure is not explicitly disclosed; however, the company proposed an increase in Authorized Share Capital and the issuance of Bonus Shares in January 2026 to strengthen its capital base.

Credit Rating & Borrowing

Brickwork Ratings downgraded the bank loan facilities of INR 125 Cr to BWR BBB-/Stable from BWR BBB/Stable in January 2023 and subsequently withdrew the rating. The company maintains working capital facilities of INR 125 Cr (INR 25 Cr from Federal Bank and INR 100 Cr from Bank of India).

⚙️ Operational Drivers

Raw Materials

Not applicable as LKP Finance is an NBFC; its primary 'raw material' is capital used for investment and lending activities.

Import Sources

Not applicable for financial services operations.

Key Suppliers

Not applicable; however, the company utilizes banking partners like Federal Bank and Bank of India for credit facilities totaling INR 125 Cr.

Capacity Expansion

Not applicable in manufacturing terms. In financial terms, the company is expanding its loan book, which grew from INR 56.11 Cr in March 2024 to INR 157.19 Cr in March 2025, a 180% increase.

Raw Material Costs

Not applicable; financial costs are driven by interest on borrowings. Total financial liabilities decreased from INR 56.77 Cr in FY24 to INR 36.74 Cr in FY25, a 35% reduction.

Manufacturing Efficiency

Not applicable; however, the Current Ratio improved from 4.63 in FY24 to 8.86 in FY25, a 91% increase, indicating high liquidity and efficient short-term asset management.

Logistics & Distribution

Not applicable; distribution of financial products is handled through the LKP Group's retail equity and depository services divisions.

📈 Strategic Growth

Expected Growth Rate

15-18%

Growth Strategy

The company plans to achieve growth by leveraging periods of market weakness as long-term investment opportunities. It is also expanding its loan portfolio (which grew 180% YoY in FY25) and strengthening its capital structure through a proposed bonus share issue in 2026 to enhance market participation.

Products & Services

Financial services, trading in shares, debt securities, derivatives, and corporate lending.

Brand Portfolio

LKP Finance, LKP Group (established 1948).

New Products/Services

The company is focusing on expanding its lending activities, with loans and advances reaching INR 157.19 Cr in FY25, contributing to a shift in the revenue mix toward interest income.

Market Expansion

The company seeks opportunities in the capital market, specifically targeting the expected decline in interest rates in FY 2025-26 to optimize its investment portfolio.

Strategic Alliances

The company maintains significant related-party transactions, including a loan of INR 40.07 Cr to Mufin Green Finance Limited and brokerage/guarantee arrangements with LKP Securities Limited totaling over INR 31 Cr.

🌍 External Factors

Industry Trends

The NBFC industry is seeing increased regulatory oversight from the RBI, which acts as a hindrance to smooth functioning but promotes systemic stability. There is a trend toward digital transformation and analytics-based risk mitigation.

Competitive Landscape

Competes with other NBFCs and banks in the finance and investment space, differentiating through quick decision-making and customer orientation.

Competitive Moat

The company's moat is built on its 74-plus year legacy (since 1948) and the deep expertise of its promoters in the Indian financial services sector. This long-standing reputation provides better access to capital and client trust.

Macro Economic Sensitivity

Highly sensitive to capital market movements and interest rate cycles. Management expects a decline in interest rates in FY 2025-26, which would typically increase the valuation of its debt security holdings.

Consumer Behavior

Increased retail participation in capital markets provides more opportunities for the group's distribution and brokerage services.

Geopolitical Risks

Market volatility driven by global geopolitical events impacts the company's trading book and investment valuations.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent RBI norms for NBFCs and SEBI (LODR) Regulations. The company must maintain specific capital adequacy and liquidity ratios as per RBI directives.

Environmental Compliance

Not applicable for NBFC operations; no specific ESG costs disclosed.

Taxation Policy Impact

The company's current tax liabilities stood at INR 0.49 Cr in FY25, down from INR 1.52 Cr in FY24. Deferred tax liabilities also decreased significantly from INR 9.78 Cr to INR 0.60 Cr.

Legal Contingencies

The company has disclosed the impact of pending litigations on its financial position in Note 29 of the standalone financial statements, though specific INR values for all claims are not aggregated in the summary.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of earnings due to high dependency on trading securities. A material weakness in internal financial controls was reported in FY25 due to missing lender confirmations, posing a risk to financial reporting accuracy.

Geographic Concentration Risk

Concentrated in the Indian market, particularly the Mumbai financial hub.

Third Party Dependencies

Dependent on banking partners (Federal Bank, Bank of India) for liquidity facilities totaling INR 125 Cr.

Technology Obsolescence Risk

The company maintains an audit trail (edit log) facility in its accounting software to mitigate data tampering risks and comply with statutory requirements.

Credit & Counterparty Risk

Credit risk is managed through an ECL model; however, the loan book is concentrated with related parties like Mufin Green Finance (INR 40.07 Cr).