Chennai, India – January 28, 2025: Kreon Financial Services Limited (NSE: KREON, BSE: 530139) has announced its unaudited financial results for Q3 FY2024-25, reporting ₹645.79 lakh in revenue and a net loss of ₹(371.71) lakh. This was primarily due to a revised debt write-off policy reducing the days past due (DPD) from 360 days to 180 days. This policy change led to increased bad debt write-offs, impacting profitability.
Key Financial Highlights – Q3 FY2024-25 (Standalone)
- Revenue from Operations: ₹645.79 lakh (YoY increase of 48.3% from ₹435.39 lakh)
- Total Income: ₹660.56 lakh
- Profit Before Tax (PBT): ₹(396.35) lakh
- Net Profit (PAT): ₹(371.71) lakh (compared to a loss of ₹(147.45) lakh in Q3 FY24)
- Earnings Per Share (EPS): ₹(1.84) per share.
Nine-Month Performance (April – December 2024) (Standalone)
- Total Revenue: ₹1,611.34 lakh (YoY increase from ₹1,123.29 lakh)
- Profit Before Tax (PBT): ₹(332.75) lakh
- Net Profit (PAT): ₹(335.28) lakh
- EPS: ₹(1.66) per share.
Key Business Highlights
- Revised Debt Write-Off Policy Impact:
- The company reduced the days past due (DPD) for debt write-offs from 360 days to 180 days.
- This change led to an additional ₹3.71 crore in bad debt expenses, increasing losses.
- Significant Growth in Fees & Commission Income:
- ₹557.20 lakh earned in Q3 FY25, reflecting 41.3% YoY growth from ₹394.10 lakh.
- Higher Operating Costs Due to Business Expansion:
- Employee expenses surged to ₹136.26 lakh (YoY increase of 93.7%).
- Marketing expenses accounted for ₹88.25 lakh in Q3 FY25.
- Collection charges rose to ₹122 lakh, reflecting growth in the lending portfolio.
Strategic Developments & Key Announcements
- Equity Investments & Fair Value Adjustments:
- Investment in equity instruments led to a loss of ₹61.41 lakh due to fair value adjustments.
- Recovery of bad debts contributed ₹61.24 lakh to other Income.
- Interim Dividend:
- No interim dividend was declared for Q3 FY25.
- Regulatory Compliance & Financial Transparency:
- As per SEBI guidelines, investments are measured at fair value through other comprehensive Income (FVOCI) or profit and loss (FVTPL).
- Figures from previous quarters have been reclassified for better comparison.
Management Commentary
Jaijash Tatia, Managing Director, Kreon Financial Services, stated:"The revised debt provisioning policy aligns with our commitment to conservative financial management. Despite the short-term impact on profitability, we believe this strategy will strengthen our balance sheet and risk management framework in the long run.".
Market Outlook & Investor Takeaways
- Revenue growth remains strong, driven by higher lending and fees from financial services.
- The shift to a 180-day debt write-off cycle may result in long-term improvements in asset quality.
- Higher operational costs reflect ongoing expansion and increased collection efforts.