InCred Records Stellar Growth, Profit Soars Over 10X in Two Years

InCred, a prominent player in the Indian fintech sector, has witnessed phenomenal growth in recent years. The company’s revenue surged a remarkable 2.6X over the past two fiscal years, reaching Rs 1,267 crore in FY24 compared to Rs 488 crore in FY22. This impressive financial performance was accompanied by an even more significant spike in profits, which skyrocketed over 10X during the same period.

Operational Revenue Climbs, Interest Income Drives Growth

InCred’s operational revenue experienced a robust increase of 48% in FY24, reaching Rs 1,267 crore, compared to Rs 856 crore in FY23. Financial statements obtained from the company’s website reveal this positive trend. Founded by Bhupinder Singh, InCred caters to a diverse range of lending needs, offering loans for businesses and consumers, including home loans, education loans, personal loans, and two-wheeler loans. Interest income generated from loan disbursements forms the cornerstone of InCred’s revenue, contributing a substantial 94%. This key income stream witnessed a significant rise of 45% in FY24, reaching Rs 1,193 crore.

Beyond Interest Income: Diversifying Revenue Streams

InCred’s revenue generation extends beyond just interest income. Fees, commissions, and dividends also play a role in driving the company’s financial performance. Additionally, InCred generated Rs 26 crore from other income sources, bringing its total revenue in FY24 to a noteworthy Rs 1,293 crore.

Managing Growth: Balancing Costs and Expansion

As InCred navigates its rapid growth trajectory, managing operational costs remains crucial. Finance costs accounted for a significant portion (52%) of the company’s overall expenditure in FY24. However, InCred has demonstrated a commendable ability to control cost increases, with finance costs rising by a moderate 27.8% to Rs 455 crore in FY24.

To support its impressive expansion in FY24, InCred strategically ramped up its workforce. This strategic decision is reflected in a 35.9% increase in employee benefit expenses. The company also witnessed an overall cost increase of 37.4% in FY24, reaching Rs 871 crore from Rs 634 crore in FY23. This increase can be attributed to factors such as depreciation, legal expenses, advertising costs, travel expenses, and other operational expenditures.

Profit Surge and Financial Strength

Despite the cost increases associated with growth, InCred’s successful management strategies have resulted in a stellar 2.6X rise in profits. The company’s profits surged to Rs 316 crore in FY24, a significant leap from Rs 121 crore in FY23. This robust financial performance is further emphasized by improvements in ROCE (Return on Capital Employed) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins, reaching 5% and 34%, respectively. Additionally, InCred’s unit-level cost efficiency reflects its financial strength. In FY24, the company spent approximately Rs 0.69 to earn every rupee.

Unicorn Status and Future Prospects

InCred’s impressive performance culminated in achieving unicorn status following a $60 million funding round led by Ranjan Pai’s MEMG Fund in December 2023. This development was exclusively reported by Entrackr. According to TheKredible, a startup data intelligence platform, KKR currently holds the largest external stake in InCred at 31.5%, followed by B Singh Holding.

InCred has successfully carved out a niche in a highly competitive market and appears poised to emerge as a leader in the fintech space. Its strong financial performance should pave the way for access to additional funding opportunities, particularly debt funding, which would facilitate further expansion of its balance sheet. Founder Bhupinder Singh has demonstrably validated his initial premise of a significant market opportunity underserved by traditional banks and financial institutions. While InCred’s future trajectory remains to be seen, a key question lies in the potential impact of the significant stake sale to KKR, considering the growing trend of large conglomerates acquiring established financial firms.