💰 Financial Performance

Revenue Growth by Segment

Total Interest Income grew by 51.37% YoY to INR 64.77 Cr in H1FY26 compared to INR 42.79 Cr in H1FY25. This growth is primarily driven by the LAP/SME segment and a 54.80% YoY increase in total Assets Under Management (AUM) which reached INR 767.46 Cr.

Geographic Revenue Split

The portfolio is heavily concentrated in North/West India with Rajasthan contributing 63.88% of AUM as of FY25. Other regions include Gujarat (12.15%), Madhya Pradesh (11.73%), and Maharashtra (10.50%).

Profitability Margins

Net Interest Margin (NIM) improved to 11.24% in FY24 from 10.26% in FY23. Return on Average Assets (RoAA) stood at 5.35% in H1FY26, while Return on Average Net Worth (RoNW) was 10.03%. Profit After Tax (PAT) for FY25 grew 79.3% YoY to INR 33.23 Cr.

EBITDA Margin

Core profitability is reflected in the ROTA which improved to 4.58% in FY24 from 3.88% in FY23. The cost-to-income ratio was significantly rationalized to 34.86% in FY24 from 46.49% in FY23 due to improved operating efficiencies.

Capital Expenditure

As an NBFC, capital is deployed into the loan book. The company raised INR 132 Cr through an IPO in June 2024 and is raising INR 45 Cr through convertible warrants to support AUM growth toward a target of INR 950 Cr by FY26.

Credit Rating & Borrowing

The company holds an IVR BBB+ / Stable rating from Infomerics and a similar rating from Acuité. Interest expenses increased by 54.88% YoY to INR 24.44 Cr in H1FY26, reflecting the increased scale of borrowings to fund the expanding loan book.

⚙️ Operational Drivers

Raw Materials

Not applicable as AFIL is a financial services provider; however, its 'cost of goods' is the Cost of Funds, which accounts for approximately 37.7% of total interest income in H1FY26.

Import Sources

Not applicable. Capital is sourced from domestic equity markets (IPO), warrants, and domestic lenders like SIDBI.

Key Suppliers

Capital providers include Small Industries Development Bank of India (SIDBI) and various domestic banks/NCD investors.

Capacity Expansion

Current physical presence includes 29 branches across 5 states. The company plans to expand its dealer network and leverage its 'AASAANLOANS' digital platform to scale from 200,000 current customers to 5 million by 2030.

Raw Material Costs

Interest expenses (cost of capital) rose 54.88% YoY to INR 24.44 Cr in H1FY26. Procurement strategy involves diversifying into NCDs and ECBs to optimize borrowing costs.

Manufacturing Efficiency

Operational efficiency is measured by the cost-to-income ratio, which improved to 34.86% in FY24. Branch productivity is a key driver for the 'Hub and Spoke' business model.

Logistics & Distribution

Distribution is handled through 29 physical branches and a digital lending platform to reduce customer acquisition costs.

📈 Strategic Growth

Expected Growth Rate

53.70%

Growth Strategy

Growth will be achieved by scaling AUM from INR 618.61 Cr in FY25 to a guided INR 950 Cr in FY26 through geographic expansion beyond Rajasthan, increasing the dealer network for vehicle loans, and cross-selling gold loans and insurance products to the existing 200,000+ customer base.

Products & Services

Two-wheeler loans, four-wheeler loans, commercial vehicle financing, Loan Against Property (LAP) for SMEs, and newly launched Gold Loans and Insurance distribution.

Brand Portfolio

Akme Fintrade India Limited (AFIL), AASAANLOANS (Digital Platform).

New Products/Services

Gold Loans and Insurance sales are expected to diversify revenue streams starting Q4 FY26, leveraging the existing branch network for higher fee-based income.

Market Expansion

Expanding footprint across Tier II and Tier III markets in Gujarat, Maharashtra, and Madhya Pradesh to reduce Rajasthan-specific concentration risk.

Market Share & Ranking

AFIL is a niche player in the Rajasthan NBFC market, specifically targeting the underbanked SME and rural vehicle finance segments.

Strategic Alliances

Partnerships with vehicle dealers across five states to act as primary origination points for the 2W and 4W financing portfolio.

🌍 External Factors

Industry Trends

The 2W financing market is expected to grow 18-19% in FY26. AFIL is positioning itself to capture this through digital transformation and a shift toward multi-product financial services (Gold/Insurance).

Competitive Landscape

Faces intense competition from traditional banks and emerging fintech companies that offer faster digital processing and lower interest rates.

Competitive Moat

Moat is built on 20+ years of local market expertise in Rajasthan and a robust in-house collection mechanism that maintains GNPA at 2.77%, which is better than the industry average of ~3.5% for vehicle loans.

Macro Economic Sensitivity

Highly sensitive to rural demand and monsoon patterns, as favorable monsoons boost the repayment capacity of the rural borrower base in Rajasthan and MP.

Consumer Behavior

Increasing shift toward digital loan applications and rising demand for personal mobility in Tier II/III cities driving the vehicle finance portfolio.

Geopolitical Risks

Minimal direct impact, though national regulatory shifts for NBFCs regarding risk weights on consumer credit affect capital adequacy requirements.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI norms for non-deposit taking NBFCs. Recent regulatory pressures include higher risk weights on certain loan categories which could impact liquidity and capital allocation.

Environmental Compliance

Not applicable for financial services; however, the company is expanding 'sustainability financing' as part of its H1FY26 strategy.

Taxation Policy Impact

Effective tax rate is standard for Indian NBFCs; Profit Before Tax (PBT) grew 36.20% YoY to INR 26.15 Cr in H1FY26.

Legal Contingencies

The company handles all recovery activities in-house to mitigate legal risks associated with external collection agencies; no specific high-value pending court cases were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Asset quality in the vehicle loan segment is a key monitorable, as it accounts for 30% of total GNPA despite being only 22% of the portfolio. Impairment of financial instruments rose 236.78% YoY in H1FY26.

Geographic Concentration Risk

63.88% of AUM is concentrated in Rajasthan, creating a high vulnerability to state-specific economic or regulatory changes.

Third Party Dependencies

High dependency on the promoter, Mr. Nirmal Kumar Jain, for day-to-day operations and strategic direction, though a new professional management team was recently inducted.

Technology Obsolescence Risk

Risk of being disrupted by fintechs; mitigated by the launch of the 'AASAANLOANS' digital platform and adoption of new lending technologies.

Credit & Counterparty Risk

GNPA improved to 2.77% in FY25 from 3.63% in FY24. However, the LAP portfolio remains the primary source of GNPAs, accounting for ~62% of total defaults.