Hindon Mercantile Limited

Operating revenue increased from INR 77.7 crore in FY22 to INR 111.06 crore in FY24, representing a 19.5% CAGR

Mechanical EBITDA margin is 64.5%, but EBITDA is unsuitable for lenders; the more relevant pre-provision operating margin is approximately 22.8% PAT of ₹12.90 crore represents a 10.7% margin; the reported INR 18.51 crore includes minority shareholders’ profit

Consolidated debt of approximately INR 683 crore against total equity of INR 269.4 crore produces elevated leverage of 2.5x

Operating cash flow was positive INR 88.8 crore in FY23 but negative INR 402.4 crore in FY24 due primarily to loan-book expansion

The RBI reported 16.1% NBFC credit growth in FY23, including 14.6% vehicle-loan growth

The market is fragmented, with strong competition from banks, established NBFCs and specialised fintech lenders

The group operates across NBFC lending, P2P, account aggregation and prepaid instruments, all subject to extensive RBI regulation

The group reported nil foreign-currency income and remains almost entirely dependent on domestic credit demand

Kapil Garg’s disclosed professional history indicates over 20 years in finance, accounting and fintech-related activities

Three of the six FY24 directors were independent, producing an independent-director representation of 50%

No promoter-share pledge was disclosed, while the auditor reported no pending litigation materially affecting the group’s financial position

Recurring operating related-party dealings remained below 5% of income; advances and warrant subscriptions were separately disclosed as financing transactions

The diluted P/E of 104.19x represents an extreme premium to the median industry P/E of 30

EV/EBITDA is not meaningful for an NBFC because borrowings and finance costs are operating inputs

The 7.5x P/B is substantially high