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📉 Moneyboxx Finance: Profitability Under Pressure Amidst Rising Costs and Covenant Breach
Moneyboxx Finance Limited's Q3 FY26 results unveil a stark picture of deteriorating profitability, primarily exacerbated by a significant escalation in finance costs and a critical breach of its Non-Convertible Debenture (NCD) covenants.
🟢 The Financial Deep Dive
The Numbers: For the third quarter ended December 31, 2025, Moneyboxx Finance reported a stated total income of ₹248.77 crore, which the company claims is a 10.0% year-on-year increase. However, the base figure provided for Q3 FY25 (₹2262.06 crore) appears to be a significant typo, as it would imply a massive revenue contraction, contradicting the stated growth.
Profitability took a severe hit. Profit After Tax (PAT) for Q3 FY26 plunged by a staggering 92.29% year-on-year to ₹76.36 crore, a sharp decline from the ₹989.33 crore reported in Q3 FY25. The company's own reporting of a 22.8% decline to ₹76.36 crore from ₹989.33 crore is mathematically inconsistent. This significant drop was driven by a 67.5% YoY surge in finance costs to ₹910.37 crore and a 13.3% increase in impairment charges for financial instruments. Basic Earnings Per Share (EPS) stood at ₹3.62, reportedly an increase from ₹3.13 in Q3 FY25, adjusted for a bonus issue.
For the nine-month period ending December 31, 2025 (9MFY26), Total Income grew by 9.6% YoY to ₹6656.14 crore. PAT for 9MFY26 saw a marginal decrease of 1.4% YoY to ₹2270.11 crore. Finance costs for the period increased by 32.2% YoY, and impairment charges rose by 28.6% YoY.
The Quality: Margins have come under immense pressure due to the disproportionate increase in finance costs relative to income growth. The company's Gross Stage 3 Assets Ratio was 1.43% and Net Stage 3 Assets Ratio was 0.72% as of December 31, 2025, indicating a manageable level of stressed assets. The Capital to Risk Weighted Assets Ratio (CRAR) remained robust at 26.68%, but the Debt-equity ratio stood at a high 2.48.
The Grill: The most critical point is the non-compliance with financial covenants for listed Non-Convertible Debentures (NCDs). The PAR>90 (Portfolio at Risk >90 days) ratio breached the stipulated limit of 3% of the Gross Loan Portfolio, reaching 4.32% for the quarter ending December 31, 2025. This breach is a significant governance and financial risk. The company is reportedly in discussions with the Debenture Trustee to seek a waiver, the outcome of which is crucial for its future financial stability and borrowing capacity.
🚩 Risks & Outlook
Specific Risks: The primary risks revolve around the NCD covenant breach and its resolution. Failure to secure a waiver could lead to accelerated repayment demands, increased interest rates, or severe reputational damage, impacting access to further debt capital. The continued rise in finance costs, if not managed against revenue growth, will persistently erode profitability. High leverage (Debt-equity of 2.48) amplifies these risks.
The Forward View: Investors will be keenly watching the outcome of the discussions with the Debenture Trustee for the NCD covenant breach. The company's ability to manage its borrowing costs and improve asset quality while continuing to grow its loan book will be key. The recent allotment of bonus shares and increase in authorized share capital signal growth intentions, but these are overshadowed by immediate financial pressures and covenant non-compliance. The company's strategy for managing escalating finance costs will be a critical factor to monitor in the coming quarters.