Navi posts Rs 439 Cr revenue in Q1 FY24, profit continues to suffer

Navi Finserv posted a flat revenue of Rs 438.7 crore in Q1 FY24 compared to its preceding quarter (Q4 FY23). The Sachin Bansal-led company’s income from operations stood at Rs 412 crore in the said quarter.

Navi’s revenue from operations, however, surged 2.3X when compared to Rs 184 crore in the same quarter of the previous fiscal year (Q1 FY23).

Interest income was the largest contributor to its income, making up 80% of the total collection during Q1 FY24. This revenue decreased 3.2% to Rs 354.1 crore during Q1 FY24 as compared to Rs 366.1 crore in  Q4 FY23.

The rest of the income came from fees and commissions, net gain on fair value, and income from other operating activities which increased 82% to Rs 84.6 during Q1 FY24. Its income from non-operating activities dwindled 97% to Rs 1.56 crore in Q1 FY4 from Rs 56.6 crore in Q4 FY23.

Navi Finserv’s total loan book stood at Rs 6,444 crore out of which the secured portfolio stood at Rs 3,842 crore while it has cash and bank balances amounting to Rs 1,285 crore.

On the cost side, finance costs (read as interest expenses) accounted for 36.3% of the total burn. This expense increased 4.6% to Rs 147.2 crore in Q1 FY24 from Rs 140.7 crore in Q4 FY23.

Navi booked Rs 126 crore against impairment on financial assets which is a non-cash expenditure. The company has carried an impairment provision towards its loan asset to the extent of Rs 471 crore at the quarter ended June 2023. The company added Rs 31.6 crore towards employee benefits which pushed its overall cost by 13.2% to Rs 405.2 crore in Q1 FY24 from Rs 358 crore in Q4 FY23.

The cost of provision of impairment on financial assets and declined other income led the company to post a profit of Rs 26.2 crore in Q1 FY24 as compared to Rs 98.2 crore in Q4 FY23.

Navi filed its draft red herring prospectus (DRHP) in March last year with SEBI to raise up to Rs 3,350 crore. However, the firm had to delay the IPO plan citing the market conditions even after receiving approval from the market regulator.

The past couple of months have been quite eventful for the company. In July, Navi disclosed that it is looking to raise up to Rs 500 crore through the issue of secured and redeemable non-convertible debentures (NCDs). The company also cut its workforce as it fired 150-200 employees across tech, product and analytics among others.

Meanwhile, microfinance institution Svatantra Microfin Private Limited has entered an agreement to acquire Navi Group’s subsidiary Chaitanya India Fin Credit Private Limited for Rs 1,479 crore.