RNFI Services FY26: Higher Margins, Regulatory Headwinds, and a Bigger Expansion Bet

/# RNFI Services FY26: Higher Margins, Regulatory Headwinds, and a Bigger Expansion Bet

RNFI Services Limited, operating under the relipay brand, ended FY26 with a clear divergence between revenue growth and profit growth. Consolidated revenue for FY26 stood at INR 968.6 crore, up 6 percent year on year. But profitability expanded far faster. EBITDA rose 46 percent to INR 63.2 crore and profit after tax increased 61 percent to INR 32.4 crore. The company also reported gross profit of INR 184.9 crore, up 42 percent, with gross margin expanding to 19.1 percent from 14.2 percent.

That combination tells a specific story. FY26 was not a smooth, linear growth year. It was a year of business mix change, where a regulatory shock hit a high-volume product line, and the company leaned harder on higher-margin services to protect and even expand earnings.

The operating engine: a last-mile network with cross-sell momentum

RNFI positions itself as a distribution-led fintech platform. It reported a network of 2.4 lakh active Sahayaks, or merchant touchpoints, serving 130 partners. Of these, 95 are BFSI partners. The platform claims to offer 26 products and reported an ARPU of 1108 per Sahayak per month in FY26, up 4 percent from 1066 in FY25.

The company’s FY26 network growth remained visible. Active Sahayaks rose from 215,314 in FY25 to 240,694 in FY26. More importantly, cross-sell intensity improved. The number of Sahayaks using four or more products increased to 33,584 in FY26, a 39 percent year-on-year rise. This kind of product density matters because RNFI’s model emphasises capacity building upfront in distribution, with revenue following at near-zero marginal cost. In theory, that sets up operating leverage once throughput rises.

What went wrong: DMT disruption from RBI guideline changes

RNFI explicitly highlighted the key setback in FY26: regulatory-driven slowdown in domestic money transfer volumes. The presentation states that DMT volumes declined 69 percent, falling from INR 3,580 crore in FY24-25 to INR 1,112 crore in FY25-26 due to revised RBI guidelines.

A second disruption was the discontinuation of PPI DMT. RNFI says the PPI DMT business was discontinued effective 31 December 2025 due to revised RBI guidelines. The company reported INR 402 crore of GTV in PPI DMT business during Apr to Dec FY25-26, before the shutdown.

While DMT is not presented as a high-margin line, it clearly impacted throughput. RNFI also notes that revenue remained largely flat because the decline occurred in a high-volume, low-margin business, and was offset by growth in higher-margin lines.

The profitability story: non-forex expands, forex stays low-margin

RNFI breaks its performance into non-forex and forex businesses. The contrast in unit economics is sharp.

In non-forex, FY26 revenue rose to INR 478.7 crore from INR 426.8 crore in FY25. Gross profit increased to INR 179.0 crore from INR 123.4 crore, taking gross margin up to 37.4 percent from 28.9 percent. PAT rose to INR 32.7 crore from INR 19.6 crore, and PAT margin improved to 6.8 percent from 4.6 percent.

Forex remained a very large revenue contributor, but profitability weakened further. Forex revenue was essentially flat at INR 489.9 crore in FY26 versus INR 490.0 crore in FY25. But FY26 forex PAT turned negative at minus INR 0.3 crore, compared with positive INR 0.5 crore in FY25. Gross margin stayed around 1.2 percent, underscoring how sensitive that line is to spread compression and cost absorption.

Quarterly numbers also support the same pattern. In Q4 FY26, RNFI reported revenue of INR 239.3 crore, gross profit of INR 50.8 crore, EBITDA of INR 17.2 crore, and PAT of INR 8.4 crore. The company highlighted margin-led growth and credited automation-led efficiencies for the expansion in gross margin, EBITDA and PAT.

Strategy and execution: tech push, regulated businesses, and near-term cost uplift

Management commentary in the presentation is heavily oriented toward technology and automation. The company states it has embedded AI and advanced technology into the core of its business and that many AI capabilities and automation tools have been developed in-house. A notable operational claim is that RNFI’s AI-powered merchant support chatbot resolves 99 percent of customer queries autonomously, enabling 24x7 support at scale.

The presentation also outlines new product and regulatory opportunities. RNFI launched UPI cash withdrawal as a new growth product and commenced UPI QR based cash withdrawal service in partnership with Jio Payments Bank Ltd. On the forex side, RNFI Money Pvt Ltd received an AD-II license approval from RBI. Management states this now enables foreign trade transactions up to INR 25 lakh per transaction, which was not permitted earlier. The company also reported empanelment of RNFI Money Pvt Ltd with Canara Bank for sale and purchase of foreign currency.

Diversification into distribution-led wealth products is also visible. RNFI incorporated a wholly owned subsidiary, RNFI Asset Distribution Pvt Ltd, for mutual fund distribution. Management also mentions ARN registration for mutual fund distribution.

The clearest forward-looking statement comes from the CEO. The company calls FY2026 the beginning of a strategic expansion cycle across distribution and product capabilities. It expects a major portion of these investments to be expensed through the P&L, leading to elevated near-term operating costs. Despite that, the CEO states an expectation that profitability will improve by 40 to 45 percent in FY2027, driven by operating leverage, scale benefits, and deeper penetration.

Governance and balance sheet notes

RNFI also highlighted governance initiatives. It states that promoter group family members owned 12.7 percent of shares in subsidiary Paysprint Private Limited and have decided to relinquish these shares in favour of RNFI Services Limited free of charge. The presentation also mentions the company has started declaring quarterly results despite being SME listed.

On balance sheet indicators, FY26 net worth rose to INR 169.7 crore. Debt remained low in absolute terms, but borrowings increased to INR 27 crore, a 71 percent year-on-year increase. Debt-to-equity is reported at 0.2 in FY26, with a current ratio of 1.7.

Takeaways from FY26

RNFI’s FY26 results are best read as a profitability and mix-improvement year rather than a pure topline acceleration year. Regulatory changes reduced DMT volumes sharply, and the company had to lean on higher-margin lines to sustain growth. The reported margin expansion across gross profit and EBITDA indicates that the business is finding operating leverage, particularly in non-forex lines.

The FY27 setup, as described by management, involves a deliberate rise in P&L-expensed investment to expand distribution and product capabilities, with an explicit expectation of 40 to 45 percent profitability improvement in FY2027. The key monitoring variables will be whether new products like UPI cash withdrawal scale meaningfully across the 2.4 lakh Sahayak network, and whether forex remains a low-margin drag or stabilises as the AD-II license-led opportunities expand.

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