Emerald Finance Limited (538882) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q2 FY '26 Results Conference Call of Emerald Finance Limited hosted by Kirin Advisors Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Samiksha Ramteke. Thank you, and over to you, ma'am.

Thank you. On behalf of Kirin Advisors, I welcome you all to the Conference Call of Emerald Finance Limited. From management team, we have Mr. Sanjay Aggarwal, Managing Director; Ms. Gurmeet Kaur, Chief Risk Officer; and Mr. Talin Aggarwal, Head of Business Development. Now I hand over the call to Mr. Sanjay Aggarwal. Over to you, sir.

Good evening, everyone, and a very warm welcome to the Q2 FY '26 Earnings Call of Emerald Finance Limited. On behalf of the management team, I extend my sincere appreciation to all of our stakeholders, investors and analysts for joining us today. I am joined today by Ms. Gurmeet Kaur, our Chief Risk Adviser; and Mr. Talin Aggarwal, Head of Business Development. We concluded the first half of FY '26 on a decent note with a healthy financial growth, operational progress and expansion across various verticals. Our EWA and gold loan syndication business has continued to gain traction, supported by rising digital adoption of -- in our company. In Q2 FY '26, we reported an performance -- all round performance that reflects a consistent operational momentum and financial discipline. On a stand-alone basis, our total income rose by 66% on a year-on-year basis to INR 5 crores and our net profit more than doubled to INR 3 crores on a year-on-year basis. On the consolidated level, total income increased by 38% to INR 7 crores and net profit jumped by 75% to almost INR 4 crores. For the first half year of FY '26, our total stand-alone income grew by 77% to INR 10 crores and our net profit jumped by 121% to INR 6 crores. On a consolidated basis, our total income increased by 45% to INR 14 crores and net profit grew by 81% to INR 7 crores. These results highlight the strength of our asset-light model and effective cost management. Operationally, the quarter reflected steady progress in our digital and lending initiative. We have launched our own mobile app by the name of Emerald EWA on Google Play. Also, we have done a syndication of almost more than INR 115 crores of gold loan in this quarter vis-a-vis INR 80 crores in the previous quarter. Plus, I would like to bring to acknowledge that we have deposited last year almost INR 3 crore plus as income tax. And for this current year, we have already made a provision of INR 2.27 crores for income tax for both the companies combined together. Plus, although we were not required, we did CSR in the previous year of INR 31 lakhs. And this year till date for the first 6 months, we've already done CSR about what INR 30 lakhs. This is mainly to cancer patients and for the education and girls education. Before I would conclude, I would like to thank all our shareholders, customers, partners and employees for their continued trust and support. With a strong foundation and disciplined execution, we are confident of sustaining our growth momentum and building Emerald Finance into a scalable and more importantly, resilient financial enterprise. With that, I now invite questions from all the participants and would be happy to address them one by one. Thank you all.

[Operator Instructions] The first question is from the line of Gaurav Didwania from Qode Advisors LLP.

He is not audible.

Yes, sir, we will move to next question. The next question is from the line of DS India from Finvestors.

Sir, congratulations for putting good numbers, sir, and sir, till date, as I have seen, you have onboarded 145 corporates. And we are on the course for our target to 250 in FY '26. In regarding to this, my question is that how many of them are actively involved as it might be possible that a few of them may be offboarded?

Yes, yes, yes. Talin, could you take that question?

Yes. So we have basically 120 corporates which are active. So we essentially maintain an engagement ratio of 80% roughly at any given time.

Okay, sir. And in this line, my next is further, how many users are involved from these 120 corporates or 145 are availing this facility, sir?

So last month, we had close to 2,400 unique borrowers, unique people making transactions.

With the run rate of?

Last month, we had 2,400 people making the transactions.

Okay, sir. And sir, my second question is regarding NPA. And in this respect, as I didn't see anything in the PPT. And sir, I am talking specifically for gold loan and small token loans?

Come again? Come again? Come again, please?

Yes, sir. My second question regarding NPA. As I didn't see anything in EWA as you have earlier told, but you have opened a new loan, gold loan and a small token loan as you're giving. So sir, any NPA...

We're getting a [ PP ] activity for us. Gold loan is not booked in our books. That's a fee-based activity for us. So there's no question of NPA in that gold loans.

Okay. And any NPA in any of the segments, sir?

Yes. In business loans, we have one NPA and EWA, there were 2 NPAs.

Okay, sir, for how much...

We are hopeful of recovering that.

Okay. Sir, roughly numbers, sir, please?

For the business, it was about INR 30,000. We have written off -- we have written off that money. And in the EWA, I think one case of INR 8,000, other is of INR 6,000 something. See, there's not customer, they have left the jobs, but we are in touch with both these customers. I think it should come in a month or 2. That money should come.

Sanjay, if I may add.

Yes.

So in EVA, there are 2 employee accounts, which are in default, they are yet not NPA. They are in DPD 30 plus. They have not become 90-plus. And in business loan only, we have got 1 NPA that is INR 30,000.

Okay, madam. And sir, my third question...

Customers, they have left the job, so we have to recover from directly from them, not from the employer.

Okay. Okay, sir. Good, sir. Sir, my third question is that as I can see, sir, reducing number in other expenses with respect to last Q2 FY '25 and H1 FY '25. Is there any specific reason for that?

Other expenses majorly include commissions we paid to the sub DSAs. So a lot of business we are getting directly. So that commission part is saved. So a lot of business comes from the sub DSAs. All our employees directly sourced. In case our employees directly sourced from the customer, you don't have to pay any sub DSA commission. So that part is getting reduced and more or less, more business are being sourced by our employees. That keeps on fluctuating. In some quarters, some employee source more business. In some quarters, we get more business from the DSAs that keeps on fluctuating.

The next question is from the line of Mr. Akash Jha from A.J. Wealth.

A couple of questions from my side. I mean, first question is regarding our margins. We are at 78%. So is this level sustainable. And lastly, on our earlier guidance of growing PAT 8 to 10x by FY '27. So I mean, since our current growth rate is slowing compared to the targeted trajectory. So are we still confident about achieving this guidance?

See, the year when we gave this guidance, we were almost at 1 plus EPS. Next year, we were at 2.57. And if we continue with this, I think hopefully, we should close at 4 plus this year. And next year, I think we should -- with the increasing more and more corporates are planning as our business is growing, we should be able to achieve our target, subject to 1 or 2 quarters here or there, not more than that.

Okay. And on margins -- on margins, margins, we are at 78%. So is this level sustainable?

Correct. So our EBITDA margin is more or less sustainable. So because, again, we are leveraging technology now to expand the business here forward. So our EBITDA should more or less remain stagnant between 75%, 80%. The PAT, we -- I think this quarter, the PAT came to close to 52%, if I'm not wrong. So the PAT might take a bit of a hit as we lever up and our interest expenses go up. But in the longer term, we plan to stabilize the PAT between 40% to 45%. Okay.

We received a lot of -- more and more technology based. So with the increase in business, we don't have to recruit more employees. So our operational costs don't increase in that ratio.

The next question is from the line of Mr. Ankit Saha from Fusion Capital.

So my question was on our EWA vertical. So like what is the current run rate for it and future outlook on the run rate for EWA.

So last month, we did INR 6 crores in disbursement, and it's growing by close to 15% to 20% month-on-month. So we expect to touch INR 13 crores to INR 15 crores by the end of this financial year. By then, we would have 250 corporates as we are projecting, more is favorable. So going in the long run, again, we -- the idea is to keep adding corporates and keep increasing the engagement with our customers.

Okay. Got it. And secondly, like initially, we were thinking to give the personal loans, small ticket personal loan to the EWA customers, right? And then we are also thinking on cross-selling opportunities. So how it has been and what is the way forward for like cross-selling?

So cross-selling, we're already doing. So cross-sell, maybe again, we sell the models, all sorts of loans through our subsidiary, including personal loan is being cross-sold to them. So in fact, in last quarter, we did close to INR 4 crores of cross-sell only through EWA, only to the EWA customers. And as of today, most of these loans are being booked by our partner banks. But going forward, we estimate to book a few of those loans in our own books as well, be it across products. So we're just building the capabilities and technology for that.

So what are we exactly cross-selling, like the small ticket personal loans?

Everything. So name of product, I think in loan, we're doing literally everything from personal loan, business loan to corporates, vehicle loan, gold loan, home loan because the subsidiary [ Ecilit ] has a partnership with 40-plus banks and NBFCs, wherein we source all these retail loans for them. So we are essentially using Soop Bank's network here and cross-selling all those loans to EWA base.

The next question is from the line of Chirayu from CEB Investments LLP.

First is what is the...

Your voice is breaking.

Am I audible now?

Yes, you are loud and clear now. Please go ahead.

Right. Yes. So sir, what is the contribution of EWA in the revenue? How much percentage.

On a consolidated basis, 3.2% on a stand-alone basis, 4.6% revenue.

That's what I was talking about, direct revenue.

Without including cross-sell.

There's a recommendation if you can give a split in the upcoming PPTs of each vertical and how much contribution that is.

Yes, we've noted the feedback. We'll make the amendments in subsequent quarter.

Previous con call, you -- which part.

Your voice is breaking. We couldn't hear the entire question.

Sir, in the...

Chirayu, your voice is breaking. No, it's still breaking.

I can't hear you at all.

Could you please rejoin the Q&A? The next question is from the line of Raj from Flare Capital.

Actually, in last con call, there was mention of 2 NPAs in business loans, right? So like one is written off and one is paid.

Yes, yes. Yes. One has been paid and one has been written off. But I think we'll recover that also. INR 30,000, we have written off, but I think we should be able to recover it. We already touched with that client. He is working with the central government in a sensitive department. I think money will not go anywhere. It should come. He's facing some short-term problem that money should come. It's a government employee, central government employee.

Okay. And for NPA in EWA program, like earlier, there was a thing like even if employee resigns, they would be given only the amount for which they have worked for the number of days they have worked. So in final settlement, it would be deducted. But like why there's a default this time?

Because the employee did not serve the notice period and it's discounted without informing the company. So the company had internal deductions to make. the company has its policy. If the employee does not serve the notice period and its calls early, there are certain deductions to be made. So therefore, after those deductions, there was not enough in the full and final.

Okay. So this is like a very rare scenario, right?

Absolutely, absolutely.

Yes. And for this EWA disbursement, like currently, it's INR 6 crores disbursement per month, right?

Right.

And are we on the guidance to reach like INR 15 crores per month?

Correct. Correct. So we should be around INR 13 crores to INR 15 crores by the end of this financial year. As mentioned earlier, our disbursements are growing at 15% to 20%.

See [Foreign Language], we have substantial number of companies, and there are a couple of more corporates in the pipeline who want a bigger amount of funding. But just keeping the market scenario in place, we are going on a restricted and conservative basis [Foreign Language].

Okay. And any big names like any large corporates in line for EWA?

We can't disclose that. Unless the MOAs are signed with them, we can't disclose here. But again, as we keep partnering, we are very active with our reporting to the exchange.

Okay. And there is a mention of some CSR activities in this con call. Is it a required one? Or like what's the benefit for that?

No. Previous year, it was voluntarily. We were not required. This year, we are actually required to do CSR of INR 8 lakhs, but already we have done INR 29 lakhs in this half year. Last year, it was totally voluntarily. This year is -- we have to do a provisioning of INR 8 lakhs. But we have already done INR 21 lakhs more than that, what was actually required for the full year.

Okay. And last question from my side, like there was one big fund, right, Investec Global, which was selling these tax. So now they have completely sold off or...

Yes, yes, Investec Global has complete sold. Actually, they are changing some constitution in -- that is why they were liquidating all their holdings. They are fully liquid.

The next question is from the line of Anuj Goyal from AJ Investments.

Sir, I just wanted to understand, is there any change in loans outstanding to related parties since year-end?

Year-end, no, not much, not much. It's more or less 1/10. Majority of the related party transactions through our subsidiary.

All right. And one more question I had is, is there any change in strategy, which has led to a greater number of corporates being onboarded towards the second half of this quarter?

I think our sales network and our referral partner began to kicking in. So we spent the entirety last year building these networks, building the capabilities. Now we are seeing the fruits of that.

We have recently signed up with a very large diamond company in Mumbai. I think this should also start addressing a lot of clients and -- good clients in Mumbai.

The next question is from the line of Gaurav Didwania from Qode Advisors LLP.

Yes. So I had a few questions regarding the fee-based income and the interest income. So the fee-based income has dropped significantly quarter-on-quarter. So could you explain the reason behind that? Also, does EWA form part of the fee-based income line? So that was one question. If you could answer that, I'll ask my follow-up question.

No, fee-based income has not fallen. I think stagnant interest income is going up more. It's almost more or less -- it's not growing much, but it's almost vis-a-vis as compared to interest income. Interest income is going up a little faster speed.

Right. And another thing was that the borrowings have marginally decreased, but the loans have grown sharply. So how is the loan book growth funded? And how would you -- like is it entirely internal accruals and existing cash reserves? And how do we plan to grow further? Would it be debt, equity, if you could just explain in terms of your strategy?

Debt is almost at a similar level. It has just grown by INR 1 crore, but we have raised a lot of equity last year. And plus with internal accruals, we are just pumping those back.

Understood, which is why we see the cash...

PAT is also growing that -- interest expense has not increased substantially.

So another thing observation was that other expenses have dropped like nearly 50%. What is the reason for that? Like could you explain -- is there any onetime cost last quarter or any reason for this kind of a difference?

See, major chunk of the payoffs is either to the employees for sourcing business or to the sub-DSAs. So this quarter, more business was sourced by our employees rather than the sub-DSAs. When we pay to the sub-DSAs, we pay them commission, which come in other expenses. And most of the business last quarter was sourced by our employees. But this ratio keeps on changing. Sometimes in some quarter employees source business and sometimes we get a major chunk of the business from sub-DSAs that keeps on changing. So either we pay to the employees or we pay to the sub-DSAs, either one of them.

And sub-DSAs are part of the other expenses, whereas employee cost that we are doing for the sourcing of the business is not all of that. So that is the ratio keeps changing, which is why this would be...

And commission we pay to the sub-DSAs more than what the additional incremental salary to pay to the employees. It's always better in sourcing...

Understood. Another thing is that provisions had increased. I understand that you mentioned about the NPAs. Could you like -- should we expect provisions to remain elevated? Is there any change in policy in terms of provisions, if you could give some clarity on that?

Provisions for what -- provisions for taxation or which provision.

No, no, no. I'm talking about provisions for nonperforming assets or like write-offs.

No, no, they're not changed. We hardly have any -- we only just booked 2 cases last quarter, one case last quarter. There's not much change.

Understood. So there's no change.

One INR 30,000 case. [Foreign Language] I think by this year-end, we should recover that money [Foreign Language].

One last question. In terms of the interest income and the finance charges, interest income has increased and finance charges have decreased. Could you explain like what the increase in interest income this quarter was due to the higher loan book yields or larger disbursements. At the same time, finance costs have declined. Does it reflect lower borrowing rates or repayment of high-cost debt or any change in the funding mix? Like could you just give some clarity on that?

So we are not borrowing the repayments are continuing every month and our book size in the March, our total book size was INR 80 crores. This year, in September, it is almost crossing INR 100 crores. So interest income is increasing. And our borrowings have not increased in the similar proportion. I think in March, our total borrowings are INR 13 crores and now it's almost INR 14 crores. So they have not increased in the same proportion. -- so funding most of the new book -- or from the internal accruals.

[Operator Instructions] The next question is from the line of Nishita from Sapphire Capital.

Happy Diwali. I'm new to this company. I'm researching about the company for the first time. So I just wanted to understand more about EWA, the early wage access. How does it work? If you can give a better understanding on that?

Sure, Nishita. So I think we just take a step back, just give you a brief of who we are, what the company is, if that's fine with you.

Yes, yes, sure.

Right. we started business back in '94, '95, starting as a direct selling agent for AFCO back then, which then became Citi Finance. In 2015, we received an NBFC license along with the BSE listing. So today, we have 2 major verticals driving the business. One is the loan syndication business, which is driven through our partner banks and NBFCs, wherein we source leads for them for all sorts of retail and wholesale loans. The second is our own NBFC. So wherein we book a majority of business loans. So our current book sits at close to INR 9,500 crores, which is essentially primarily made of medium ticket business loans. And about 2.5 years ago, we launched a small ticket personal loan digital loan called early wage access. So this is essentially a program wherein we partner with corporates to give advances to their employees. So if you go into any manufacturing firm or maybe a services firm, so they essentially have advances on a rotational basis to their employees. So essentially, when we come in, we take over the entire advance policy of the company. And for the same, the employees pay us a certain service fee. So the idea here is that any advance that has to be funded or any employee need for an advance, they do not have to go to their employer, they come to us and we fund the advance and it's a certain percentage of the salary, which we fund. And the repayment of the same is then made by the employer on salary date.

Okay. Okay. Understood. So the employer directly comes to you to take the advances and once the employer receives the salary, they'll pay back to you.

So the employee pays us directly. So the employer pays us directly through salary deduction. So let's say, if I have taken INR 5,000 advance from Emerald, the employee will deduct the INR 5,000 and pay Emerald directly.

Okay. Okay. Understood. So you collect that money from the employer, not the employee.

Correct. Correct. So this secures our repayment to a certain extent.

Okay. Okay. Understood. So in the con call, previously, you mentioned that the 2 employees who are in default from them, you have to collect the money directly to them? So why is that?

Also because the employer -- the employees in question, they left without serving the notice period to the employer. So normally, what our contract with the employer says is that in case someone is gone, the employer pays us through the full and final. But in this case, it was an [ expansion ] case. There was no full and final with the employer. So hence, we are bearing the risk and the onus is on us to collect the money.

Okay. Understood. Also in the presentation, you mentioned that the service fee for this is like for per transaction, it's 1.5% to 2.5%. And annually, it comes up to 30%...

Correct.

So that 30% is of the salary of the employee.

Service fee -- of the service fee. So let's say if someone in any year takes INR 10,000 from me. So I'm essentially earning INR 3,000 in the entire year from the person.

Okay. So the service fees for the amount -- 30% is for the amount that they've taken from you, the advanced amount that they've taken...

Correct. On an annualized basis.

The next question is from the line of Ravi Patel from Star Investment.

Sir, I have a question regarding this ROE. So what is the internal ROE target that you have set? Because we can see that we are growing north of -- in this quarter itself has grown 30%...

Return on equity, you are saying?

Yes, yes, ROE.

See, I was just checking on the screen. Our return on capital employed, they are showing is 18.4% and ROE is around 14%.

No, but I am asking about the outlook. Because you are growing much higher rate as compared to ROE. So in that case, we need the external funding. So what is the ROE outlook? And how do you see the external funding requirement in the future? And how you are planning to compensate for that?

See, we plan to raise more of debt. So right now, vis-a-vis our equity, our debt is quite low to plan to raise more debt from the banks or NBFCs.

Okay. To fund that requirement...

Future growth, yes. We're already applying to a number of institutions for increase in debt.

So what is your target debt-to-equity ratio in this case? I mean, any...

Currently, it's only 0.2. So we can easily sustain 0.5 to 1x of the equity. Currently, it's only 0.2.

Yes, yes. And the next question is regarding this growth outlook that we have said. In this quarter, we have grown PAT by 75% and sales by 38%, if I'm not wrong. So my question is what gives you the confidence to achieve this 100% growth target for the next 2 years in spite that we didn't achieve that in this particular quarter?

[Foreign Language] I repeated in the last con calls also. Market conditions not that really all the major NBFCs and banks are very cautious in lending. That's what we also personally believe -- [Foreign Language] you compromise on the quality of the book. So we are doing it in a very cautious manner. Like we had INR 6 crores of EWA [Foreign Language] Per company allotment what we give the sanction to the company, we keep on a very restricted basis. [Foreign Language] exposure to that particular company. Backup funding is not an issue with us.

But still have confidence to target maybe 1 to 2 quarters late.

Yes, yes. 1 or 2 quarters, we should definitely get First year was 1.37, next year was 2.57. Now already first 2 quarters only, we're almost touching 2 EPS.

And there is no equity funding planned in the future, only debt finance.

As of date, no.

The next question is from the line of Rohit Juneja from KRJ Investment Group.

So I think most of the questions have been asked. So my questions are specifically regarding the guidance that was for this year. The plan is to have 250 to 260 companies onboard. Are we on track to have that for the next 2 quarters?

Correct. Correct. So if you see in the last quarter, we onboarded close to 50, 55 companies. So even if we maintain that level, we will touch 250, assuming no growth.

Okay. And my second question is a lot of companies which are EBIX related are subsidies of EBIX. So if our relation with one company are not going well, does it affect the relation with all other aspects of that same main company, EBIX?

Come again, they are all separate companies.

Correct. So they were evaluated individually.

Okay.

And all of them are performing very well.

The next question is from the line of Saptarshee Chatterjee from Groww AMC.

Congrats for the good results. I'm also new to the company and would like to understand the business model better. For the early wage access, this is only 1 month kind of advances or you are like giving for multiple months, let's say, 3, 4 months also is the tenure of the early wage access.

So right now, it's only 1 month. So the idea is to manage cash flows for the employees. So essentially, if an employee is running short on cash towards the end of the month or there's a financial emergency, right? So they can withdraw the money instantly from our system from our portals and the same is deducted in the following month. So for this, we do not charge any interest. It's only the processing fee or the service you can call, which we charge based on the amount used. So as of now, it's only 1 month. Although we do sell -- cross-sell personal loans from other banks and NBFCs, which can again go up to 12 months, 24 months depending on the amount and product.

Got it. And when we are signing up with these corporates, what is typically our pitch. Who are the competitors like versus them? What is our pitch? How do we win the contract?

So the idea here is that every company or the majority of companies have advances ongoing. So this advance is essentially unproductive working capital for them. [Foreign Language] They say they are paying interest on this INR 10 lakhs, right? Whereas if we come in, they can put this INR 10 lakhs for productive use and again, earn return on that. So the idea here is 2 things. So one, the entire working capital, which has gone for advances gets saved. Second, there is no hassle of giving advances. [Foreign Language] Even if 15 of them come to me, advance, it's a hassle on my HR on my finance. When we are there, it's -- the employees interact directly with us. And it's a completely seamless digital process. And the entire report of it goes to the employer on a daily basis.

Right, sir. Because this is beneficial for the company as well as employees also. But what I'm seeing is it is a good profitable economic and it's a large economic pool of profit. So my question is that why the larger banks or larger NBFCs are not penetrated in this segment too much and how we are getting?

Gurmeet, would you like to take that?

Yes, sorry. So where the larger banks are concerned, which are regulated by RBI, they typically do not kind of offer a 0% interest product. So they cannot offer that. Second thing is that for the bigger banks, it does not make an economic sense given the scale at which they currently operate. So this product is not really lucrative for them in terms of the interest. The second thing is that the same thing also goes for majority of the NBFCs in the country. Their first focus has been on a big ticket size or the small ticket size personal loans and mortgage loans. This particular product requires a great deal of operational and tech savviness and also a lot of patience for growth. So this particular product is what consumer durable is to Bajaj Finserv. So each of the banks and the NBFC has a different expansion model, and this particular product does not fit into already existing NBFC and the bank's landscape. So the competition from them per se does not exist. Then there are -- this particular concept took -- this particular concept came into India from about 2018, and it's a replica of what happens in the U.S. where the earned wage access is a program offered by multiple fintechs. So this program came into India with the fintechs because fintech which now have become the LSP for various banks came with a lot of operational and tech savviness. Hence, there is very less competition because it does not make the unit economic sense to a lot of NBFCs and the banks in their current business model.

Plus, Gurmeet, on a stand-alone basis, EWA companies worldwide is going very big now. I was reading somewhere that some a couple of Indonesian companies, they have 10 lakh-plus customers now. We are sitting at 2,400 and India is such a huge, huge market compared to Indonesia.

It is not well penetrated at this point of time, and I think we have the movers advantage in this space, the trust is getting established. And there is operational savviness. And quite a lot of fintechs had gone out of business because it is also kind of a cash guzzler for them, and they have been getting the capital at a very, very high rate. So -- and they have not been able to kind of control their losses. But we have got a model which is extremely right where the employer is assessed. The first assessment is primarily of the employer. So just to give you kind of a positive anecdote is that we have got the movers advantage. We are just on the tip of the iceberg. And I'm sure that in a few years, if there are other companies who become more tech savvy and they may want to explore this particular space. So of course, competition can come.

If I may just add to that, essentially in India you see, there are only a handful of companies, single-digit companies providing this product. So even if competition comes in, that's good for us because that will help expand the market more. That will help spread customer awareness much faster than all of us combined can do right now.

Got it. Got it. Very, very helpful. Just last thing. Can you please reiterate your plan like how many corporates or what is your plan for this year, next year that way?

So we are -- we currently have 145 corporates onboarded already. Last month, we did close to INR 6 crores worth of disbursement. So the target for March of FY '26 is to have 250 corporates and do about INR 13 crores to INR 15 crores in monthly disbursement. And going forward, we like to maintain a monthly onboarding of close to 20 to 25 corporates a month and increase the MOM by anywhere between -- increase the disbursement by about 10% to 12% month-on-month.

The next question is from the line of Chirayu from CEB Investments LLP.

Hope I'm audible now, sir?

Yes, loud and clear.

Right, sir. So Talin, you told that you -- future. I remember our previous cost of funding was around 10.5%. Are you expecting a similar range in the future. 0.5...

10.95%...

10.95%, yes. So in future, are we expecting a similar rate of interest on funding or with the rate cuts, we are hoping to gain some advantage there?

We are hoping to get 0.5% advantage.

Only 0.5% advantage. Okay. Okay. And sir, second question, you said there have been 2 rare cases, NPAs and EWA program. So I mean, these scenarios can happen in the future as well. So what is our foolproof action for these? So...

I mean if you see the total amount at risk is INR 18,000 crores on a disbursement of INR 6 crores. So that's less than 0.01% as well. And we've only baked in these risk parameters. And I think that's the risk we must take, especially in the lending business.

No. And also, Talin, just to -- if I may just add, apart from that we have covered it through contract with the employer, we also have got a robust telecalling, SMS and e-mail system for collection. And we also have tie-up with the collection agency that even where the customer is not contactable, then we can do a field visit and we can also collect. But majority of our risk gets covered because our contract is with the employer, wherein they are responsible for reduction in paying us. So as long as we continue to do our employer assessment correctly, which means we onboard those employers, which has an established stability in the market over a certain period of time and do not have any working capital issues, I think our model will be working fine.

Sure, one follow-up question. How big can we think that EWA program can be part of our revenue in the next, say, 2, 3 years? What is our internal target?

So given the growth rate of the company, because the company -- our other products, even syndication is growing very quickly. So it's not only EWA that's growing, right? So currently, in the last quarter, EWA's contribution to consolidated revenue was about 3%, 3.5%. Going forward, we would like to, in the next about 2 to 3 years, increase it, try to increase it between 8% to 10% just from the service fee of EWA. But the real money taker is the cross-sell, what the loan, the retail loans we sell to EWA customers. So as I mentioned here that in this case, we do not have to pay any sub-DSA. The entire money is us because we have already paid the cost of acquisition of the customer through EWA. And that cross-sell portion once combined with EWA's revenue, that should be a money -- big money maker for us.

[Operator Instructions] The next question is from the line of Anuj Goyal from AG Investments.

I just wanted to understand what led to the increase in PPE from INR 68 lakhs to about INR 1.2 crores from year-end?

Which increase?

Property, plant and equipment at the consolidated level.

No, no. We have constructed a new office for EWA. Cost of construction, I would put in that.

So this is a onetime increase we can...

That's a onetime increase. Yes, we have established a separate office for EWA team. So it was a onetime increase.

The next question is from the line of Raj from Flair Capital.

Across like 145 employers, like how many total employees are there currently?

So total, we have an employee base anywhere between 17,000 to 18,000, out of which close to 2,500, 2,400 transact on a monthly basis, growing at about 10% to 15%.

Okay. And currently, our ROI on this EWA product is 30% per year?

That's the annual [ API ] we charge.

The next question is from the line of Chandan Mishra from Fin Investor.

Sir, my question is related to EWA. What is disbursement trend rate currently?

So last month, we did INR 6 crores worth of disbursements. It's growing at about 15% to 20% MOM.

Okay. Next, sir, question related to the gold loan segment. Sir, what is revenue share from this segment and what we are targeting from this segment?

See, here this is only a fee-based activity. We normally get anywhere between 1% to 1.3% from the various institutions.

And what we are targeting, sir?

So we are targeting more and more growth. There's a lot of scope in this, and we'll make a couple of 1 or 2 more announcements also next week.

Sir, my next question related to, sir, out of 145 clients, we have 120 active. Still, sir, last quarter, sir, we have blocked 3 clients due to late payment. Did this number increase after that quarter?

No.

Yes. Two more. Talin, we blocked 2 more, yes?

Sir, one last question. Actually, more than a question, it is a suggestion, sir. We are NBFC, sir. I suggest, sir, if we -- if you put a presentation like other NBFCs, we get more clarity on revenue share from different segments. So our questions will be more pointed towards any segment, sir.

The next question is from the line of Ranvir Kumar Singh, an Individual Investor.

Sir, my question is, may I speak in Hindi. [Foreign Language]

See, these things will keep on changing. See, we have to keep in mind the current market situation also. And we can't go and disburse money. [Foreign Language] Our role model is HDFC, and Kotak Mahindra Bank. We want to go in a step by step manner. [Foreign Language]

As there are no further questions, I now hand the conference to Ms. Samiksha Ramteke. With that, we conclude today's Q&A. Thank you.

Thank you for joining the conference call of Emerald Finance Limited. If you have any queries, you can write to us at [email protected]. Once again, thank you for joining the conference call. Thank you, Sanjay, sir, Talin, sir and Gurmeet ma'am. Thank you.

Thank you very much.

Thank you very much...

Good evening.

On behalf of Kirin Advisors Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you very much.