VAKRANGEE - Vakrangee

📊 NSE: VAKRANGEE 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 14:53

💰 Financial Performance

Revenue Growth by Segment

Consolidated total income grew 6.8% YoY to INR 70.58 Cr in Q2 FY2025-26. The subsidiary Vortex Engineering recorded a 56.6% YoY revenue growth to INR 23.02 Cr in the same period. Historically, Vakrangee Kendra contribution rose from 49% to 64% of total revenue as the company phased out legacy e-governance projects.

Geographic Revenue Split

The company has a presence in 32 States/UTs and 604 districts. Approximately 83% of its 22,927 outlets are located in Tier IV, V, and VI rural and semi-urban areas, which are the primary revenue drivers.

Profitability Margins

Consolidated PBT grew 246.3% YoY to INR 4.11 Cr in Q2 FY2025-26. Operating profit margins were historically 23.60% in FY17, though the shift to the lower-margin Vakrangee Kendra segment from e-governance impacted overall margins.

EBITDA Margin

Consolidated EBITDA margin stood at 12.4% (INR 8.77 Cr) in Q2 FY2025-26, up from 9.1% (INR 6.06 Cr) in Q2 FY2024-25. Subsidiary EBITDA increased 12.5x YoY to INR 2.08 Cr.

Credit Rating & Borrowing

Vakrangee Limited and its subsidiaries are currently debt-free. Previous ratings of CARE A; Stable and ICRA BB+ were withdrawn in 2017-2018 as the company surrendered its bank facilities and cleared all outstanding debt.

⚙️ Operational Drivers

Raw Materials

ATM components and low-power technology hardware for Vortex Engineering ATMs; specific percentage of total cost not disclosed.

Capacity Expansion

Vortex Engineering shipped 562 ATMs in Q2 FY2025-26 (up 43% YoY) and has a robust order pipeline of 5,000 ATMs for FY2025-26. The company aims to increase its Indian ATM market share from 2% to 5%.

Manufacturing Efficiency

Vortex Engineering demonstrated efficiency by shipping 562 ATMs in a single quarter, reflecting a 43% YoY increase in output.

Logistics & Distribution

The company operates a logistics vertical through its Kendra network to support e-commerce and retail distribution; specific costs not disclosed.

📈 Strategic Growth

Expected Growth Rate

6.80%

Growth Strategy

Growth will be achieved through backwards integration via the Vortex acquisition, expanding ATM deployment economics following the RBI interchange fee hike, and diversifying into high-margin financial services like Loans, Insurance, and Mutual Funds. The company is also launching private-label apparel to transform Kendras into multi-category rural commerce hubs.

Products & Services

Banking services (account opening, deposits), ATM services, Insurance policies, Loan leads, Mutual Funds, E-commerce (Apparel), and E-governance services.

Brand Portfolio

Vakrangee Kendra, Vortex Engineering, PERFO (IP software).

New Products/Services

Private-label Apparel Product Line launched in October 2024; expansion into NPA recovery and small-ticket financial products for rural customers.

Market Expansion

Targeting global markets for ATM supply, specifically securing strategic software deals in Africa, Tanzania, and Nigeria.

Market Share & Ranking

Vortex Engineering currently holds a 2% share of the Indian ATM industry, with a near-term target of 5%.

Strategic Alliances

Partnerships with Kotak Bank, Canara Bank, Central Bank of India, Tata AIG, Star Health, and Shriram Life Insurance to provide diversified financial products.

🌍 External Factors

Industry Trends

The Indian ATM market is projected to grow at a CAGR of 6.80%, reaching USD 3.45 billion by 2033. The industry is shifting toward biometric-enabled ATMs and cash recyclers to enhance 24/7 banking accessibility.

Competitive Landscape

Competitors include traditional banks and India Post, which aims to double its ATM network to 2,000 units by FY2026.

Competitive Moat

Durable competitive advantage through a 'Phygital' network of 22,927 outlets and 562 Master Franchisees, creating a high entry barrier for competitors attempting to reach deep rural India.

Macro Economic Sensitivity

Highly sensitive to rural GDP and financial inclusion policies, as 83% of the network serves underbanked Tier IV-VI communities.

Consumer Behavior

Continued relevance of physical cash access points in rural India despite urban digital shifts, supporting the GTV of INR 12,928.7 Cr in Q2 FY2025-26.

Geopolitical Risks

Expansion into African markets (Nigeria, Tanzania) introduces exposure to regional regulatory and political stability risks.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by RBI guidelines for White Label ATMs and interbank interchange fees, which were recently increased to INR 19 per transaction.

Environmental Compliance

Vortex ATMs are designed for low power consumption, supporting ESG goals by reducing the carbon footprint of the ATM network.

Taxation Policy Impact

The company is subject to standard GST regulations; recently faced a demand of INR 6.27 Lakhs due to disallowance of input tax credit.

Legal Contingencies

Pending GST order from the Deputy Commissioner of State GST, Maharashtra, dated November 26, 2025, for Tax, Interest, and Penalty totaling INR 6,26,904.