PC: Business Standard
Personal loan and digital lending platform, CASHe, headquartered at Mumbai, has announced its financial performances for the fiscal year concluded in March 2024. For a company that has seen significant surges in revenue, the fall in profits is dramatic enough to be alarming. The business showed a 16.1 per cent increase in operating revenues, which stood at ₹650.9 crore, and is up from ₹560.6 crore in the previous fiscal. The growth demonstrates the sustained momentum for CASHe in this increasingly competitive space of digital lending, specifically with millennials and Gen Z consumers in India.
As income from operations rose, CASHe did face some significant headwinds for the profit to take an amazing 95% drop into the red. Its net earnings fell to ₹1.44 crore, down from ₹26.33 crore in FY23. The increase in the former has been attributed primarily because the same accounted for a sharp 63.5% jump into ₹40.38 crore as of now. The increasing expense is reflective of how more intensification continues there and less customer acquisition and retention through attracting their attention and holding on also becomes costly.
CASHe offers personal loans and “buy now, pay later” options – a range of financial products that have become increasingly popular amongst the younger consumers. Even so, the company reported a drop of 6.2% in its largest source of revenue: the sale of services, a source that accounted for 75.66% of operational revenue. This decline was balanced by an impressive four-fold hike in income from other operational activities, which reached as high as ₹158.4 crore.
On the cost side, CASHe’s total expenses rose by 22.4% to ₹665.8 crore, from ₹544.1 crore in FY23. The impairment loss on financial assets was a major cost, which rose 26.9% to ₹256.84 crore and accounted for 38.58% of total costs. Finance costs also rose 20.8% to ₹147.39 crore.
The financial landscape for CASHe is becoming increasingly challenging. As the digital lending market matures, factors such as heightened regulatory scrutiny and increasing operational costs are placing pressure on lenders across the board. CASHe’s ability to navigate these challenges will be crucial for its future sustainability and growth.
Despite these challenges, the cash and bank balances jumped by an impressive 92.3% to ₹95.22 crore and the current assets stood at ₹718 crore. This indicates that though profits declined, CASHe retains a solid liquidity position that could be beneficial when it strategizes for the next fiscal year.
Looking ahead, CASHe has raised about $38 million in funding so far, including an equity round of $19 million from its Singapore-based holding company, TSLC Pte Ltd, in January 2022. However, with its last major fundraising round over two years ago, the company may be challenged to raise further capital in a tightening market.
Industry analysts expect that in the current economic climate, CASHe, along with other lenders, will face increased costs and find it harder to raise equity capital. With increasing competition and regulatory pressures, CASHe will have to innovate and probably change its strategy to stay ahead in the market and remain viable in the long term.
Therefore, while CASHe has enjoyed an encouraging increase in revenue in FY24, a sharp decline in profit highlights deep issues that the company needs to fix. The new fiscal year will be very crucial because CASHe will be looking for an equilibrium between growth and profitability while being in a competitive marketplace.
