Emerald Finance loan book rises 18% as borrowings grow

Emerald Finance Limited increased consolidated loans by 17.95% in the six months to 30 September 2026 to Rs 131.0029 crore, while borrowings rose 86.98% to Rs 31.7146 crore. The loan increase consumed Rs 20.3711 crore of operating cash, and the group reported net operating cash outflow of Rs 8.3195 crore for the half year.

How much did Emerald Finance’s loan book grow?

Emerald Finance’s consolidated loans increased by Rs 19.94 crore from Rs 111.0629 crore at 31 March 2026 to Rs 131.0029 crore at 30 September 2026. The 17.95% rise occurred in the first half of financial year 2026-27 and made loans the group’s largest financial-asset category at the September reporting date.

The balance sheet expanded alongside lending. Total assets rose by Rs 27.9253 crore, or 23.13%, to Rs 148.6529 crore at 30 September 2026 from Rs 120.7276 crore at 31 March 2026. Financial assets were Rs 146.7016 crore, compared with Rs 119.2941 crore six months earlier, while non-financial assets increased to Rs 1.9513 crore from Rs 1.4335 crore.

Emerald Finance reported Rs 5.5795 crore of trade receivables at 30 September 2026, up from Rs 2.9514 crore at 31 March 2026. Bank balances other than cash equivalents rose to Rs 5.0118 crore from Rs 2.3935 crore, while cash and cash equivalents increased to Rs 3.8984 crore from Rs 2.6625 crore. The filing identifies finance as the group’s single operating segment and describes the business as a non-banking finance company.

How did Emerald Finance fund its balance-sheet growth?

Emerald Finance funded part of its asset expansion through borrowings, which rose by Rs 14.7536 crore to Rs 31.7146 crore at 30 September 2026 from Rs 16.9610 crore at 31 March 2026. That 86.98% increase exceeded the 17.95% increase in the loan book over the same six-month period.

Total liabilities increased by Rs 17.7076 crore to Rs 39.6384 crore at 30 September 2026 from Rs 21.9308 crore at 31 March 2026. Other financial liabilities rose to Rs 1.5575 crore from Rs 1.3194 crore, while debt securities reported at Rs 9.23 lakh in March were not shown at September. Trade payables rose to Rs 26.86 lakh from Rs 1.44 lakh.

The consolidated cash-flow statement records Rs 14.7536 crore of net proceeds from borrowings in the half year ended 30 September 2026. This compared with a net repayment of Rs 60.80 lakh in the half year ended 30 September 2025. After Rs 2.0641 crore of interest and finance charges paid and Rs 9.23 lakh of net debt-securities repayment, net cash generated from financing activities was Rs 12.5972 crore, compared with cash used of Rs 1.9006 crore a year earlier.

Equity also rose during the period, but by less than liabilities. Equity attributable to owners increased to Rs 106.2695 crore from Rs 96.6205 crore, and non-controlling interest increased to Rs 2.7450 crore from Rs 2.1763 crore. Paid-up equity share capital remained Rs 34.5403 crore at both dates, while other equity rose to Rs 71.7292 crore from Rs 62.0802 crore.

Why was Emerald Finance’s operating cash flow negative?

Emerald Finance reported net cash used in operating activities of Rs 8.3195 crore for the half year ended 30 September 2026, principally because the increase in loans used Rs 20.3711 crore of cash. That lending outflow was larger than the Rs 16.2882 crore operating profit before working-capital changes recorded in the same period.

Additional working-capital movements included Rs 3.6133 crore used in trade receivables and other financial assets and Rs 24.13 lakh used in non-financial assets. These were partly offset by Rs 49.23 lakh from trade payables and other financial liabilities. Income taxes paid were Rs 87.43 lakh, following cash generated from operations of negative Rs 7.4452 crore.

The latest operating cash outflow was lower than negative Rs 10.6350 crore reported for the half year ended 30 September 2025. However, cash used for the increase in loans rose by Rs 1.8862 crore from Rs 18.4849 crore in the prior-year half. The overall improvement reflected operating profit before working-capital changes increasing by Rs 6.2035 crore from Rs 10.0847 crore.

Cash used in investing activities was Rs 3.0418 crore in the latest half year, compared with Rs 48.52 lakh a year earlier. The 2026 investing outflow included Rs 2.6183 crore for net fixed deposits placed and Rs 42.35 lakh for property, plant and equipment. Combined operating and investing outflows of Rs 11.3613 crore were below the Rs 12.5972 crore financing inflow, leaving cash and cash equivalents Rs 1.2359 crore higher at 30 September 2026.

What happened to Emerald Finance’s income and funding costs?

Emerald Finance reported consolidated profit before tax of Rs 13.5987 crore for the half year ended 30 September 2026, up from Rs 9.0789 crore a year earlier. Total income increased to Rs 19.5053 crore from Rs 13.6455 crore, while total expenses rose to Rs 5.9066 crore from Rs 4.5666 crore.

Revenue from operations reached Rs 19.5046 crore, compared with Rs 13.8150 crore in the corresponding half year. Fees-based income rose to Rs 10.4200 crore from Rs 6.6872 crore, whereas interest income rose to Rs 9.0846 crore from Rs 6.9278 crore. Fees-based income therefore exceeded interest income by Rs 1.3354 crore in the latest half year.

Finance costs increased to Rs 2.0641 crore from Rs 1.2926 crore, an increase of Rs 77.15 lakh. Impairment of financial assets was Rs 50.04 lakh in the 2026 half year; the comparative half-year line was blank in the results statement. The consolidated cash-flow statement also showed an expected credit loss, or ECL, provision adjustment of Rs 43.11 lakh.

Profit after tax increased to Rs 10.1767 crore from Rs 6.7935 crore. Current tax expense was Rs 3.4297 crore, compared with Rs 2.2854 crore, and deferred tax was a credit of Rs 77,000. Emerald Finance said its impairment allowances under Indian Accounting Standard 109 exceeded the provisioning requirement under Income Recognition Asset Classification and Provisioning norms at 30 September 2026, so no transfer to an impairment reserve was required.

Conclusion

Emerald Finance’s September 2026 consolidated statements show that a Rs 19.94 crore increase in loans was accompanied by Rs 14.7536 crore of net borrowing proceeds. Loan expansion was the largest contributor to negative operating cash flow, although higher operating profit before working-capital changes reduced the operating cash outflow from the prior-year half. Borrowings grew faster than loans, while finance costs rose by Rs 77.15 lakh.

The filing discloses no loan-growth target, borrowing plan or scheduled business event after the board approved the results on 4 November 2026. The next reported results will show whether lending growth continues to require comparable financing inflows and whether finance costs, which were Rs 2.0641 crore in the half year, continue to rise alongside borrowings.