💰 Financial Performance

Revenue Growth by Segment

Consolidated PAT grew to INR 536 Cr in FY25 from INR 528 Cr in FY24 (1.5% growth). Q1 FY26 PAT rose to INR 103 Cr from INR 76 Cr in Q1 FY25, representing a 35.5% YoY increase. The growth is primarily driven by the asset management and insurance segments, which offset the conscious run-down of the wholesale credit book.

Geographic Revenue Split

The company operates a pan-India network with 252 domestic offices and 3 international offices (Total 255 offices) across 136 cities. While specific revenue % by region is not disclosed, the network serves approximately 12 million customers primarily in the Indian market.

Profitability Margins

Return on Total Assets (ROTA) improved to 1.33% in FY25 from 1.26% in FY24. Return on Tangible Net Worth (RONW) increased to 11.85% in FY25 from 8.7% in FY24. These improvements are due to lower credit costs and higher insurance premium income.

EBITDA Margin

Core profitability is characterized by a revival in earnings, with Q2 FY26 PAT reaching INR 175 Cr. However, margins remain constrained by a 'monitorable portfolio' of stressed assets and a declining loan book as the company shifts to an asset-light model.

Capital Expenditure

The group has raised approximately INR 6,000 Cr in capital since 2016 to support its lending, wealth management, and asset management businesses. As of September 30, 2025, the consolidated net worth stood at INR 5,636 Cr.

Credit Rating & Borrowing

The company holds ratings of Crisil A+/Stable and CARE A; Stable. Borrowing costs are reflected in recent NCD issuances offering an effective yield of up to 10.10% per annum to attract retail and institutional liquidity.

⚙️ Operational Drivers

Raw Materials

Debt Capital (80% of operational funding), Equity Capital (20% of funding base), and Insurance Premium Floats.

Import Sources

Sourced from domestic retail investors, High Net Worth Individuals (HNIs), and global institutional investors such as Westbridge Capital.

Key Suppliers

Major capital providers include Westbridge Capital (15% stake in Mutual Fund) and various domestic banks involved in co-lending arrangements.

Capacity Expansion

Current infrastructure includes 255 offices. Expansion is focused on 'digital-first' retail footprint growth to reach 12 million customers rather than physical office expansion.

Raw Material Costs

Interest expenses are the primary cost driver. In FY25, standalone total income was INR 40 Cr net of interest expenses, compared to INR 701 Cr in FY24, reflecting the impact of high borrowing costs and portfolio restructuring.

Manufacturing Efficiency

Transitioning to an asset-light co-origination model for retail lending to improve Return on Assets (ROA) to a target of 2.5% on a sustained basis.

Logistics & Distribution

Distribution is handled through 255 offices and digital channels, focusing on SME lending, housing finance, and insurance products.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

The company aims to generate INR 2,400 Cr by September 2026 through stake sales in NBFC, ARC, and insurance businesses to reduce debt. Growth will be driven by scaling the retail franchise (SME and Housing) using a co-lending model and expanding the Alternative Asset Management AUM.

Products & Services

Secured Non-Convertible Debentures (NCDs), Mutual Fund units, Alternative Investment Funds, SME Loans, Housing Finance, Life Insurance policies, and General Insurance policies.

Brand Portfolio

Edelweiss, Nido Home Finance (Housing), Zuno General Insurance, EdelGive Foundation.

New Products/Services

Public issuance of Secured Redeemable NCDs in December 2025 aiming to raise up to INR 250 Cr to bolster working capital.

Market Expansion

Targeting a retail footprint of 12 million customers by expanding into 135+ cities through the co-origination lending model.

Market Share & Ranking

Established leader in the Indian Alternative Assets and Asset Reconstruction (ARC) markets.

Strategic Alliances

15% stake sale in the Mutual Fund business to Westbridge Capital; multiple co-lending partnerships with domestic banks for retail portfolio building.

🌍 External Factors

Industry Trends

The industry is shifting toward 'asset-light' models and fee-based income. Edelweiss is positioning itself by established leadership in Alternatives and ARC while scaling retail via co-lending.

Competitive Landscape

Faces intense competition in retail lending from Tier-1 banks and in the insurance segment from established private players.

Competitive Moat

Moat is built on a diversified '7-business' model which provides counter-cyclical revenue (e.g., ARC performs well when credit cycles turn negative). This is sustainable due to deep expertise in distressed assets.

Macro Economic Sensitivity

Highly sensitive to Indian GDP growth and interest rate cycles; a 1% rise in interest rates significantly impacts the cost of the INR 11,330 Cr net debt.

Consumer Behavior

Increasing consumer preference for digital insurance (Zuno) and professional wealth management/alternative investments.

Geopolitical Risks

Exposure to global market volatility through international offices and global investor partnerships (e.g., Westbridge).

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by RBI (for NBFC and ARC) and IRDAI (for Insurance). RBI recently lifted business restrictions on ECLFL and EARCL in December 2024, which is critical for operational continuity.

Environmental Compliance

ESG focus through EdelGive Foundation; board includes 4 Independent Directors and 2 Female Directors to ensure governance compliance.

Taxation Policy Impact

Subject to standard Indian corporate tax rates; fiscal policy changes regarding NCD taxation impact retail demand.

Legal Contingencies

The company addressed 222 bondholder grievances; no major pending shareholder litigation reported. Monitorable portfolio of Rs 426 Cr in stage III assets represents the primary financial contingency.

⚠️ Risk Analysis

Key Uncertainties

Uncertainty in the timing and quantum of recoveries from the INR 426 Cr stressed wholesale portfolio could impact net worth by up to 5-10% if recoveries fail.

Geographic Concentration Risk

98% of offices are located within India, making the company highly dependent on the Indian regulatory and economic environment.

Third Party Dependencies

High dependency on banking partners for the co-lending model and on global PE firms for subsidiary stake monetization.

Technology Obsolescence Risk

Risk of digital disruption in insurance and retail lending; mitigated by investments in 'seamless customer experience' platforms.

Credit & Counterparty Risk

Retail gross stage III assets stood at 2.7% as of June 30, 2025, showing a slight increase from 2.3% in March 2025, indicating rising pressure in the retail segment.