I went through the company, but I don’t have full conviction yet. Here are some key points:
Positives:
- Management is projecting 8-10x profit growth over the next 3 years.
- EWA loans have grown from ₹2 crore to ₹3.5 crore QoQ, according to management.
- They charge only processing fees with no interest on loans.
- Almost zero NPAs in the EWA category.
Negatives:
- Larger companies already have internal infrastructure for EWA, limiting market potential.
- Management struggled to recall key figures for the EWA and business loan divisions and didn’t provide a breakdown in their presentation.
- The EWA market in the USA is only $22 billion, which might indicate the market isn’t that large.
- Management claims NBFCs and banks aren’t interested in ₹25,000 ticket size loans, which I don’t believe is entirely accurate.
It’s an interesting new product, but there are some unclear aspects, which is typical with microcaps. I’ve taken a small position for now.
| Subscribe To Our Free Newsletter |
