WE ENCLOSE HEREWITH: - the standalone audited financial results for the quarter for the quarter ended 31st March, 2025 alongwith the statement of Assets and Liabilities and cash flow statements - ....
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Avon Mercantile, a single-segment loan company, reported its FY25 results with total income falling to ₹266.95 lakhs from ₹464.79 lakhs in FY24, a drop of about 43%. Interest income specifically declined from ₹433.64 lakhs to ₹255.22 lakhs. The company swung from a profit of ₹14.26 lakhs in FY24 to a loss of ₹1.41 lakhs in FY25, with EPS turning negative at ₹(0.02). Total expenses rose to ₹258.36 lakhs, driven by higher finance costs (₹161.11 lakhs vs ₹340.47 lakhs previous). The balance sheet expanded sharply, with total assets growing from ₹641.23 lakhs to ₹3,973.15 lakhs as loans and advances surged from ₹540 lakhs to ₹3,709.50 lakhs. However, this was funded by borrowings jumping from ₹80.75 lakhs to ₹3,269.25 lakhs, pushing the debt-to-equity ratio to roughly 6.4x. Operating cash flow turned negative at ₹(37.94) lakhs, and other equity remains negative at ₹(235.36) lakhs. The auditor (Gupta Garg & Agrawal) issued an unmodified/clean opinion.
Despite a clean audit opinion, shareholders should note the sharp revenue decline, swing to loss, and aggressive debt-funded growth that has pushed leverage very high. The negative operating cash flow and accumulated losses in other equity raise concerns about financial sustainability, which could weigh on the stock.