DCCL - Dar Credit & Cap

📊 NSE: DCCL 🏢 Non Banking Financial Company (NBFC) 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total operating income grew 26% YoY to INR 41.39 Cr in FY25. Segmental AUM contribution as of March 31, 2025: Personal loans to municipal employees (45%), Unsecured MSME/Micro loans (38%), and Secured MSME loans (17%). Retail portfolio grew 16% in FY25, while overall AUM growth slowed to 3.48% due to the replacement of Hiveloop clientele loans.

Geographic Revenue Split

Highly concentrated with 50% of the portfolio in West Bengal and 29% in Rajasthan as of March 31, 2025. The remaining 21% is spread across Gujarat, Madhya Pradesh, Chhattisgarh, Bihar, and Jharkhand.

Profitability Margins

ROMA improved significantly from 1.70% in FY24 to 2.90% in FY25, and further to an annualized 3.78% in H1FY26. Yield on advances increased from 19.38% in FY24 to 20.97% in FY25 (22.62% excluding Hiveloop impact) due to a higher-yield product mix.

EBITDA Margin

Not standard for NBFCs; however, PAT grew 91% YoY from INR 3.69 Cr in FY24 to INR 7.04 Cr in FY25. Interest coverage ratio improved from 1.30x to 1.46x in FY25 and reached 1.51x by Q1FY26.

Capital Expenditure

Not disclosed in absolute INR Cr; however, the company is investing in digital transformation including AI/ML-driven credit assessment and automated KYC systems to support its 36-branch network.

Credit Rating & Borrowing

Credit Rating: CARE BBB-; Stable (Reaffirmed August 2025/January 2026). Borrowing costs are approximately 12% for bank facilities and 14-15% for the investor/NCD sector.

⚙️ Operational Drivers

Raw Materials

Debt Capital (100% of lending resources), sourced through bank facilities and NCDs.

Import Sources

Domestic sources across India, primarily through banking channels and capital markets.

Key Suppliers

ICICI Bank, Bandhan Bank, and various NCD investors.

Capacity Expansion

Currently operates 36 branches across 7 states with a team of 250+ employees. Management intends to expand the branch network and employee base to drive business growth while maintaining stable opex ratios.

Raw Material Costs

Interest expense is the primary cost. IPO proceeds of INR 23.05 Cr in Q1FY26 provided zero-cost capital, which significantly improved net interest margins.

Manufacturing Efficiency

Operational efficiency improved in FY25 through stable opex costs despite geographical expansion into 35+ locations.

Logistics & Distribution

Distribution is handled through 36 physical branches and a digital loan origination system for seamless processing.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be achieved by deploying INR 23.05 Cr of IPO proceeds into the lending system, expanding the branch network beyond the current 36 locations, and implementing AI/ML-driven credit assessment for faster approvals. The company is also shifting from third-party (Hiveloop) clientele to self-originated retail loans.

Products & Services

Unsecured personal loans to municipal employees (cleaners, sweepers, peons), unsecured MSME micro-loans, and secured MSME financing backed by property mortgages.

Brand Portfolio

Dar Credit & Capital Limited (DCCL).

New Products/Services

No new product categories planned; focus remains on scaling existing municipal and MSME loan segments.

Market Expansion

Expanding financial access to underserved segments in rural and semi-urban areas across 7 existing states (Rajasthan, Gujarat, WB, MP, Chhattisgarh, Bihar, Jharkhand).

Market Share & Ranking

Small-sized NBFC with AUM of INR 200.75 Cr; positioned as a niche lender to low-income segments.

Strategic Alliances

Equibridgex Advisors (Investor relations/Advisory).

🌍 External Factors

Industry Trends

The NBFC sector is shifting toward digital-first lending and AI-based risk assessment. DCCL is positioning itself by automating KYC and loan origination to compete with larger MFIs.

Competitive Landscape

Competes with other NBFC-MFIs and small finance banks in the unsecured micro-lending space.

Competitive Moat

DCCL's moat is its 31-year legacy and specialized relationship-based lending to municipal employees, a niche segment with specific collection dynamics that are difficult for new entrants to replicate.

Macro Economic Sensitivity

Highly sensitive to the rural and semi-urban economy and the financial health of municipal bodies, as 45% of borrowers are municipal employees.

Consumer Behavior

Increasing demand for fast fund disbursement and financial accessibility in underserved rural areas.

Geopolitical Risks

Limited to domestic regional risks in West Bengal and Rajasthan.

⚖️ Regulatory & Governance

Industry Regulations

Regulated as a Base Layer NBFC by the RBI. Complies with MFI guardrails by not lending to customers with more than three existing lenders.

Environmental Compliance

Not applicable for NBFC sector.

Taxation Policy Impact

Standard corporate tax rates apply; deferred tax assets stood at INR 0.58 Cr as of Sept 2025.

⚠️ Risk Analysis

Key Uncertainties

Asset quality in the recently originated MSME portfolio is a key monitorable due to rising delinquencies. GNPA above 3.00% would trigger a negative rating action.