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True Balance’s profit zooms over 2X to Rs 138 Cr in FY24

EntrackrEntrackr · 1y ago
True Balance’s profit zooms over 2X to Rs 138 Cr in FY24
Medial

True Balance, founded by South Korean entrepreneur Cheolwon Lee, started with a mobile and DTH recharge platform. However, the company’s business dynamics changed drastically after FY21 when it started lending (personal or short-term loans). This shift enabled the company to register over 74X growth in its scale in the past five fiscals as its revenue ballooned to Rs 667 crore in FY24 from Rs 8.95 crore in FY19. For context, the SoftBank-backed firm started lending in FY20 through third parties, and a year later it also got its own NBFC —True Balance. On a fiscal to fiscal basis, True Balance’s operating revenue grew 54.8% to Rs 667 crore in FY24 from Rs 431 crore in FY23, its consolidated financial statements sourced from Registrar of Companies show. True Balance’s personal loan platform usually targets borrowers who are neglected by banks and have no credit scores. The service and processing charges on the loans offered contributed 56% of the firm’s total operating revenue. This income spiked 63.2% to Rs 377 crore in FY24 from Rs 231 crore in FY23. Meanwhile, the income from interest stood at Rs 280 crore in FY24. The penalties on dues and non-operating incomes (interest from fixed and current investments) took True Balance’s overall revenue to Rs 673 crore in the fiscal year ending March 2024 from Rs 433 crore in FY23. See TheKredible for the detailed revenue breakup. For the cash loan firm, the bad debts (NPAs) and their provisions formed 36.2% of its overall cost which increased by 26.3% to Rs 202 crore in FY24 from Rs 160 crore in FY23. The fintech firm had written off the bad debts worth over Rs 114 crore while the rest were the provisions related to the bad debts in FY24. The firm’s spending on employee benefits, finance, advertising, information technology, technical, legal, and other overheads took its overall cost up by 51.4% to Rs 557 crore in FY24. Head to TheKredible for the detailed expense breakdown. Over 50% YoY growth helped True Balance to post a 2.3X jump in its net profits to Rs 138 crore in FY24 from Rs 59 crore in FY23. Its ROCE and EBITDA margins improved to 42.24% and 27.64%, respectively. On a unit level, the ten year-old firm spent Rs 0.84 to earn a rupee in FY24. FY23-FY24 FY23 FY24 EBITDA Margin 22.40% 27.64% Expense/₹ of Op Revenue ₹0.85 ₹0.84 ROCE 32.11% 42.24% According to TheKredible, True Balance has raised $140 million across equity and debt rounds including its $28 million led by SoftBank and Daesung Private Equity. The company raised its last round almost three years back. Looking at the numbers, one can’t help but wonder at not just the numbers, but the impressive balancing act True Balance must manage to stay below the radar of regulators and watchdogs including the RBI. With its short tenure, high interest and high processing charges True Balance tries to balance out its high margins with the promise of 24×7 service and higher risk appetite. But as the delinquency numbers indicate, it must be a high intensity gig, balancing out risks versus margins. Even as margins are winning for now, we still believe the risk of sudden regulatory heavy handedness is intrinsic to its otherwise impressive business. It is also at a stage where the other next stage of growth will be fueled by more debt than equity. Considering the large appetite it can be expected to have to maintain its growth momentum, it will be fascinating to see if it has a trick or two for that too up its sleeve.

Drishti IAS posts Rs 405 Cr revenue and Rs 90 Cr PAT in FY24

EntrackrEntrackr · 11m ago
Drishti IAS posts Rs 405 Cr revenue and Rs 90 Cr PAT in FY24
Medial

Drishti IAS posts Rs 405 Cr revenue and Rs 90 Cr PAT in FY24 Offline coaching firm Drishti IAS Institute crossed Rs 400 crore of revenue during the previous fiscal year ended in March 2024. The profits for the Vikas Divyakirti-led firm touched Rs 90 crore in the same period. Drishti IAS’s revenue from operations increased by 30.6% year-on-year to Rs 405 crore in FY24 from Rs 310 crore in FY23. The Delhi-based company's revenue rose from Rs 40 crore in FY21 to Rs 119 crore in FY22, and further to Rs 310 crore in FY23. The 26-year-old educational platform mainly provides offline coaching for Civil Services Examination (CSE). Income from coaching services accounted for 94.8% of the total operating revenue, which increased by 37.6% to Rs 384 crore in FY24 from Rs 279 crore in FY23. The remaining income is generated from the sale of study materials, including pen drives, books, test papers, and other resources. Drishti IAS operates seven institutes, including two in Delhi, three in Uttar Pradesh, and one each in Jaipur and Indore. Its Mukherjee Nagar Institute is the largest revenue contributor, accounting for 58% of the total coaching income. Employee benefits and faculty charges constituted 40% of its overall cost, increasing by 41% to Rs 117 crore in FY24 from Rs 83 crore in FY23. Drishti IAS's advertising spending also jumped 3.4X to Rs 51 crore in FY24. Drishti IAS's overall expenditure increased to Rs 289 crore in FY24 from Rs 197 crore in FY23. Higher spending on employee benefits and advertising resulted in a modest 3.4% increase in net profits, which rose to Rs 90 crore in FY24 from Rs 87 crore in FY23. The company's ROCE and EBITDA margin were recorded at 55.7% and 33.73%, respectively, while the expense-to-revenue ratio stood at Re 0.71. As of March 2024, the company's total current assets were valued at Rs 88 crore, with cash and bank balances of Rs 54 crore.

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