💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment of finance. Revenue from operations decreased by 37.57% from INR 46.64 Cr in FY24 to INR 29.12 Cr in FY25, primarily due to lower interest income from loans.

Geographic Revenue Split

Not specifically disclosed by percentage, but the company is headquartered in Ahmedabad, Gujarat, and the parent Khandwala Group has a presence across 132 cities/towns in India with over 700 franchises.

Profitability Margins

Net Profit Margin significantly improved from 15.26% in FY24 to 27.70% in FY25. This 81.52% relative improvement was driven by a substantial 39.68% reduction in finance costs, which fell from INR 35.18 Cr to INR 21.22 Cr.

EBITDA Margin

Profit before interest, depreciation, and tax (EBIDTA) was INR 32.53 Cr in FY25, representing an EBIDTA margin of 111.7% of revenue from operations (boosted by other income/adjustments), compared to INR 45.43 Cr in FY24.

Capital Expenditure

As an NBFC, the company does not have manufacturing plants. Fixed assets are minimal, with depreciation of only INR 0.47 Cr in FY25 compared to INR 0.51 Cr in FY24.

Credit Rating & Borrowing

The company previously held a CARE BBB+; Stable / CARE A2 rating (2019) for INR 25 Cr facilities, which was withdrawn in August 2020 at the company's request as it did not avail the bank facilities. Borrowing costs are reflected in the finance cost of INR 21.22 Cr.

⚙️ Operational Drivers

Raw Materials

The primary 'raw material' for this NBFC is capital/debt. Finance costs represent 72.87% of total revenue from operations in FY25.

Import Sources

Not applicable as the company is a financial services provider sourcing capital domestically through group inter-corporate deposits (ICDs) and internal accruals.

Key Suppliers

Major funding is sourced internally from Khandwala group entities via Inter-Corporate Deposits (ICDs), specifically from KIFS Commercial Private Limited (parent) and KIFS Trade Capital Pvt. Ltd. (KTPL).

Capacity Expansion

The loan portfolio stood at INR 199.07 Cr as of March 31, 2020. Growth is driven by the expansion of the group's broking clientele and the ability to leverage a combined group net worth exceeding INR 600 Cr.

Raw Material Costs

Finance costs (cost of capital) decreased by 39.68% YoY to INR 21.22 Cr in FY25, which was the primary driver for the 11.29% increase in Profit Before Tax despite falling revenues.

Manufacturing Efficiency

Not applicable; however, operational efficiency is high due to shared resources and Risk Management Systems (RMS) with the group's broking arm, KTPL.

Logistics & Distribution

Distribution is handled through the group's network of 700+ franchises across 132 cities.

📈 Strategic Growth

Expected Growth Rate

7%

Growth Strategy

Growth is targeted through the integration of financial services within the Khandwala group, focusing on underserved retail sectors and leveraging growing digitalization. The strategy involves using the group's established brand and 30-year track record to expand the Loan Against Securities (LAS) and margin funding portfolios.

Products & Services

Loan Against Securities (LAS), Margin Funding, and Inter-Corporate Deposits (ICDs).

Brand Portfolio

KIFS, KIFS Financial Services, Khandwala Group.

New Products/Services

Focus on expanding digital-oriented financial products and addressing the underserved retail sector, though specific revenue contribution percentages for new launches are not disclosed.

Market Expansion

Expansion is focused on increasing penetration in the 132 cities where the group already has a presence, targeting the low retail penetration of financial products in India.

Market Share & Ranking

Not disclosed; classified as NBFC - Base Layer (NBFC-BL) under RBI regulations.

Strategic Alliances

Strong operational and financial linkages with KIFS Trade Capital Pvt. Ltd. (KTPL) for client sourcing and KIFS Commercial Private Limited for funding.

🌍 External Factors

Industry Trends

The NBFC sector is transitioning under RBI's Scale Based Regulations (SBR). Current trends include headwinds in funding costs and a shift toward robust digital-first lending models.

Competitive Landscape

Stiff competition from both large NBFCs and the banking sector, particularly in the retail and working capital segments.

Competitive Moat

The moat is built on 'Strong Parentage' and 'Group Synergies.' Access to KTPL's established client base and the group's combined net worth of INR 600+ Cr provides a sustainable cost and distribution advantage over standalone small NBFCs.

Macro Economic Sensitivity

Highly sensitive to GDP growth (estimated at 6.5-7% for FY25) and capital market performance. Economic slowdowns directly reduce the demand for margin funding and LAS.

Consumer Behavior

Increasing preference for digital financial services and growing retail participation in equity markets are positive demand drivers.

Geopolitical Risks

Indirect impact through global economic slowdowns affecting Indian equity markets, which in turn affects the company's loan portfolio demand.

⚖️ Regulatory & Governance

Industry Regulations

Regulated by RBI as an NBFC-ICC (Investment and Credit Company) under the Base Layer (BL) category. Compliance includes adhering to Scale Based Regulations (SBR) and capital adequacy norms.

Environmental Compliance

Not applicable for an NBFC; no material ESG compliance costs reported.

Taxation Policy Impact

The effective tax rate is approximately 25.5%, with a tax expense of INR 2.77 Cr on a PBT of INR 10.84 Cr in FY25.

Legal Contingencies

The company confirms that no penalties or strictures have been imposed by stock exchanges, SEBI, or any statutory authority regarding capital markets in the last three financial years.

⚠️ Risk Analysis

Key Uncertainties

Market fluctuations and interest rate volatility are the primary risks. Since 73% of the portfolio is market-linked, a significant market correction could lead to a 15-20% impact on the loan book value.

Geographic Concentration Risk

High concentration in India, specifically leveraging the group's 132-city network, with a likely heavy concentration in Gujarat.

Third Party Dependencies

High dependency on the Khandwala Group for 100% of its LAS/Margin funding client origination and a majority of its debt funding via ICDs.

Technology Obsolescence Risk

The company is addressing this by investing in digitalization and analytics to remain competitive against fintech-led NBFCs.

Credit & Counterparty Risk

Credit risk is mitigated by collateral (securities) for LAS, but 20-25% of the portfolio consists of unsecured ICDs to group entities, posing a concentration and recovery risk.