Paul Merchants - Paul Merchants

📊 BSE: 539113 🏢 Other Financial Services 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations declined 48.8% YoY to INR 3,328.58 Cr in FY25. Segment performance: Travel Division (Hotel/Packages) grew 45.93% to INR 4.90 Cr; Air Ticketing grew 6.68% to INR 1.61 Cr; Domestic Money Transfer grew 0.93% to INR 0.097 Cr; MoneyGram (International) declined 6.10% to INR 0.26 Cr. The primary Forex segment saw a massive decline due to lower migration volumes.

Geographic Revenue Split

Canada is identified as the key market for the company's forex and remittance business. Other significant regions include Europe and the USA, which have seen reduced student and worker migration impacting revenue by approximately 48.8%.

Profitability Margins

Net Profit Margin declined from 0.40% in FY24 to 0.18% in FY25, a 55.87% drop. Operating Profit Margin turned negative at -0.28% in FY25 compared to 0.11% in FY24, a 354.55% decline, primarily due to the trading nature of the forex business and high fixed costs against lower volumes.

EBITDA Margin

Operating EBITDA (excluding other income) fell to a loss of INR 4.735 Cr in FY25 from a profit of INR 11.38 Cr in FY24, representing a 141.6% year-on-year decline in core operational profitability.

Capital Expenditure

No major capital expenditure is planned for the short-to-medium term. The company maintains a tangible net worth of INR 481.95 Cr as of March 31, 2025, to support its liquidity needs.

Credit Rating & Borrowing

Long-term rating downgraded to IVR BBB/Negative in August 2025 from IVR BBB+/Negative in June 2025. Short-term rating reaffirmed at IVR A3+. Interest coverage ratio declined 66.81% YoY to 8.83x in FY25.

⚙️ Operational Drivers

Raw Materials

Forex inventory and travel stock (97.6% of total revenue), employee benefits (0.73% of revenue), and other operating expenses (1.8% of revenue).

Import Sources

Not applicable as a service/trading entity; however, forex inventory is sourced globally based on migration corridors to Canada, USA, and Europe.

Key Suppliers

EBIX Money Express (P) Ltd (Principal for inbound money transfer), MoneyGram (International remittance partner), and various airlines/hotels for the travel division.

Capacity Expansion

Current operations span 351 employees across a nationwide branch network. Expansion is focused on diversifying revenue streams into new business areas to offset the 48.8% decline in traditional forex income.

Raw Material Costs

Purchase of stock-in-trade (forex/travel inventory) was INR 3,249.55 Cr in FY25, representing 97.6% of total revenue. Purchases reduced significantly YoY in line with the 48.8% revenue drop.

Manufacturing Efficiency

Not applicable; service efficiency is measured by Debtors Turnover which slowed from 5.43 to 4.82 (11.33% decline) and Inventory Turnover which dropped from 82.92 to 50.2 (39.46% decline).

Logistics & Distribution

Distribution costs are reflected in 'Other Expenses' of INR 59.81 Cr, which decreased from INR 112.04 Cr in FY24 due to lower business activity.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Diversification into new business areas to reduce dependency on Canada-centric forex revenue; leveraging the 45.93% growth in the travel division (hotel/packages); and anticipating policy shifts following the April 2025 Canadian elections to restore migration-linked forex demand.

Products & Services

Foreign exchange, international and domestic money transfers, air ticketing, hotel bookings, holiday packages, and prepaid forex cards.

Brand Portfolio

Paul Merchants, PAUL Group.

New Products/Services

New business ventures in allied financial services; current contribution is not yet meaningful but intended to boost future revenue.

Market Expansion

Focusing on Tier 2 and Tier 3 cities for travel services while monitoring international migration policy changes in Europe and the USA for forex expansion.

Market Share & Ranking

Flagship company of the Paul Group; holds Authorized Dealer Category II license from RBI and is an IATA accredited travel agency.

Strategic Alliances

Sub-agent agreement with EBIX Money Express (P) Ltd and partnership with MoneyGram for international remittances.

🌍 External Factors

Industry Trends

Industry is shifting toward digital fintech platforms (Wise, Revolut) which eliminate pricing opacity. While travel demand is rebounding post-COVID (Travel segment grew 45.93%), traditional offline forex models are facing disruption.

Competitive Landscape

Faces intense competition from digital platforms (BookMyForex, Revolut) and other traditional money changers, leading to margin compression.

Competitive Moat

Moat includes a 30-year track record, RBI AD-II license, and extensive promoter experience. However, sustainability is challenged by fintech competitors and regulatory shifts in key migration destinations.

Macro Economic Sensitivity

Highly sensitive to global migration trends and geopolitical tensions; FY25 revenue fell 48.8% due to these external factors.

Consumer Behavior

Shift toward app-based solutions and instant transfers is threatening the traditional offline distribution network.

Geopolitical Risks

Ongoing tensions and policy changes in Canada, USA, and Europe regarding unemployment and migration are the primary risks to the forex income profile.

⚖️ Regulatory & Governance

Industry Regulations

Strict adherence to RBI Authorized Dealer Category II guidelines, FEMA regulations, and AML/KYC norms. Subject to SEBI (Prohibition of Insider Trading) Regulations.

Environmental Compliance

Not applicable for service-based forex operations.

Taxation Policy Impact

Effective tax provision of INR 2.33 Cr in FY25 on a standalone PBT of INR 8.24 Cr.

Legal Contingencies

Not disclosed in available documents; internal controls are reviewed by independent chartered accountants and the Audit Committee.

⚠️ Risk Analysis

Key Uncertainties

Uncertainty over the improvement of the operating profile in the near term due to Canadian policy changes, which could lead to further rating downgrades if profitability does not recover.