InCred: India’s Fastest-Growing Tech-Driven NBFC Poised for Breakout

Company Overview:

As one of India's fastest-growing financial services groups, InCred is using technology to meet the real needs of borrowers while delivering fast and effective solutions. Strong execution and measurable results have enabled InCred to deliver record revenue growth across all three areas of its business: lending, advisory, and investing.

Its business model is based on an innovative technology-first approach, with a focus on digital underwriting, data analytics and customer-focused technology. This strategy has enabled InCred to maintain the highest level of customer satisfaction in all its products, and it has therefore developed a strong position in the non-banking financial company (NBFC) space.

It is a Diverse Financial Services Platform. InCred Holdings Limited (IHL) is an Indian-based company that operates multiple verticals of financial services. They include:

• Retail and SME lending
• Investment Banking
• Investment Management
• Advisory and Analytics Services

Although IHL's loan book is the primary source of revenue and profit for the company, it is its diversified business model that allows IHL to act as a complete financial services platform for its customers in the retail and MSME segments.

Business Segments 

The operations of InCred span four vertically growing businesses:

(1) Retail Lending

Retail loan, education loan, and consumer credit products, characterised by their robust digital origination process and analytics-driven credit risk assessments, comprise this segment.

(2) SME and Business Lending

This vertical supports India’s rapidly expanding micro, small, and medium enterprises (MSMEs) by offering customers working capital and structured loan solutions.

(3) Advisory, Analytics, and Management Services

This vertical not only supports the provision of back office support, business intelligence services, and financial advisory services but also works to create operational efficiencies for businesses through cross-selling service offerings.

(4) Merchant Banking and Investment Services

The Merchant Banking and Investment Services vertical includes activities conducted through entities registered with the Securities and Exchange Board of India (SEBI). These entities offer investment banking, Alternative Investment Fund (AIF) management, and investment advisory services.

The organisation employs a multi-engine business model that creates stable revenue streams and reduces InCred's reliance on any singular business segment.

Subsidiary Structure

InCred Group operates a disciplined holding–operating company model, allowing for clean regulatory lines of communication and focused execution.

Direct Subsidiary

• InCred Financial Services Limited (IFSL)
  • The IFSL is an NBFC (non-banking financial company) registered with the Reserve Bank of India (RBI).
  • The IFSL is the core lending agent within the InCred Group.
  • Clients for the IFSL include retail borrowers, SMEs, and wholesale credit customers.
  • As of June 2017, 99.7% of the total profit generated by the InCred Group was attributable to the IFSL.

Step-Down Subsidiaries

• InCred Finserv Private Limited — Back-office services to IFSL
• InCred.Ai Limited — Advisory and consulting services, concentrating on data analytics and back-office efficiencies

The above structure is intended to permit InCred to operate a fully integrated, technologically-enabled, and comprehensive financial services organisation, in which the core business operation is lending.

Financial Snapshot

• Over the past four years, InCred Financial has demonstrated strong financial growth and consistently performed well as one of the fastest-growing and most efficiently operated non-banking financial companies in India. Revenue has increased from ₹488 crore for the financial year 2022 to ₹1,874 crore for the financial year 2025, with a compound annual growth rate (CAGR) of around 55% over the past 3 years. Additionally, the growth trend has remained stable, increasing by 77% in FY23, 47% in FY24, and 47% in FY25. This continued growth is attributed to the continued expansion of its loan book, increasing customer acquisition, and product diversification.
• Operational performance has been similarly enhanced, as evidenced by EBITDA growth from ₹237 crore for the financial year 2022 to ₹1,132 crore for the financial year 2025. EBITDA has increased 129%, 55% and 34% over the same period of time, demonstrating that InCred is successfully converting its increased scale into enhanced operating leverage, thus increasing operational efficiency annually.
• Profitability has improved significantly as well; PAT has increased over twelve times from ₹31 crore at the end of FY22 to ₹373 crore at the end of FY25. There has been extremely strong profit growth in FY23 (254%) and FY24 (183%), stabilising at a healthy 21% for FY25. This growth in profitability signifies improved levels of asset quality, strictly controlled expenses and strong margins across all lending verticals.
• Earnings per share (EPS) have been consistent with profit growth, increasing from ₹0.79 in FY22 to ₹5.58 in FY25. The large increase in EPS for FY23 and FY24 represents improving profitability per share and better use of equity capital. This sustained growth is encouraging to shareholders because it signals an increase in intrinsic value over time.
• The return ratios have seen an increase in both cases, with ROE moving from 2.76% in FY22 to 9.81% in FY25, and ROA moving from 0.76% to 2.99% during this time. The continued growth in these two return measures indicates that InCred has begun to operate at a more mature, stable and efficient level, with improved use of both capital and assets.
• In terms of the balance sheet, InCred has improved its debt-to-equity ratio from 2.53 times at the end of FY22 to 1.48 times at the end of FY24, indicating an improvement in its financial stability. The ratio increased to 2.20 times at the end of FY25 due to increased borrowing for growth, to support the increasing size of the company's loan portfolio. This growth led borrowing is indicative of the expected trend for fast-growing NBFCs.
• In terms of valuation, InCred appears to be reasonably valued given the company’s growth rate. At a market capitalisation of ₹10,684 crore, it has a P/E ratio of 29.57 times and a P/S ratio of 5.70 times. Investors have therefore attributed a premium value to the company, which reflects the market's expectation of continued strong earnings growth, a sustainable business model, and significant potential for continued growth in the longer term.

The financial performance of InCred Financial has shown a strong growth trajectory with significantly improved profitability, much improved efficiency ratios, and an overall well-managed balance sheet. These positive trends illustrate that InCred Financial has built a strong foundation from which to continue to evolve, position itself for future growth, and ultimately expand significantly in the Non-Banking Financial Company (NBFC) space. 

Future Outlook

InCred Financial has a high likelihood for growth in the near future because of its significant business momentum and profit improvement, and it can scale more easily across the various lending verticals. Consequently, InCred Financial should experience higher than average growth than many of its larger peer companies. Its smaller size, technology-enabled underwriting and narrow focus on product strategy are expected to help InCred Financial achieve its long-term objective of increased market share. In addition, as the loan portfolio expands and the operating leverage of InCred Financial improves, it is anticipated that InCred Financial will achieve higher profitability margins, along with improved earnings visibility, making it a key player in the NBFC sector going into the fiscal year 2030.

Assumptions for FY2030 Forecast

The projected income statements for FY2030 have been created using conservative-to-aggressive scenarios, with three main assumptions included within those scenarios: revenue growth, PAT margins, and valuation multiples.

• Revenue Growth: InCred’s revenue growth assumptions in the bear case, base case, and bull case are 16%, 17% and 18%, respectively. The average revenue growth assumption is higher than Nuvama’s estimate of 15% for the sector; these higher revenue growth assumptions demonstrate that InCred can grow at a faster rate than larger competitors due to being smaller and more nimble in its operating model.
• PAT Margins: PAT margin projections are projected to remain at a high level, 19.92% (bear), 20% (base) and 21% (bull); those projections reflect future improvements in operating efficiencies, stable credit costs, and recurring revenue streams as the Company matures into a more stable and predictable revenue-producing entity.
• Forward P/E Multiples: Valuations are based on forward P/E multiples of 30x (bear), 36x (base) and 38x (bull); these multiples are consistent with the typically higher price-to-earnings ratios assigned to high-growth, high-profitability NBFCs.
  

Projected FY2030 Outcomes

The expected revenues of InCred range between ₹3,935 crore and ₹4,286 crore for FY2030, while its PAT (profit after tax) is expected to be between ₹784 crore and ₹900 crore under three different scenarios. Valuation outcomes for InCred are expected to range between ₹23,175 crore and ₹34,205 crore, and its share price is estimated to be between ₹358 and ₹528 by FY2030. This potentially represents a return on investment for investors of between 117% and 320% based on current valuations.

Overall, InCred Financial holds a very positive outlook for its future performance. The strong historical growth, increasing level of profitability and improvement in return on capital metrics give InCred a significant opportunity to create value for shareholders over the long term. Incred has a scalable lending model, prudent risk management practices and a growing base of investor confidence, which creates a significant opportunity to more than double or possibly even triple InCred's valuation by FY2030. 

Peer Comparison

InCred uses metrics that compare other companies against them in terms of profitability, growth, and valuation. While Incred's Return on Equity (ROE) at 8.81% and Return on Assets (ROA) at 2.98% place them between SMC and JM (better than JM but below Nuvama), Incred clearly dominates the field when it comes to efficiency with an EBITDA margin of 60.46%, demonstrating better cost control, greater operating leverage and a strong lending portfolio. In terms of competitiveness, Incred also has a competitive net profit margin of 19.82% which is again ahead of most of its competitors.

Although JM Financial and Nuvama are larger revenue companies than Incred, Incred is growing faster than either company, as it continues developing its retail and SME loan portfolios. Incred's reported profit after tax of ₹373.15 Crores exceeds SMC's and has a very robust year-on-year growth of 20.7%. This demonstrates that Incred can scale both its AUM and profitability quickly.

The company's valuation also reinforces the investor's confidence; Incred's market capitalisation of ₹10,884 crore exceeds SMC and is close to JM, despite JM being a larger company. A P/E of 29.57 indicates a growth premium assigned to Incred by the market and places Incred among other high performing companies like Nuvama.

Incred differentiates itself from its competitors by employing a technology-first, AI-powered Non-Banking Financial Company (NBFC) model, allowing Incred to grow faster and operate more efficiently than traditional brokerage or wholesale companies.

Key Strengths 

1. Technology-Driven Underwriting

AI-driven underwriting and predictive analytics, in combination with real-time tracking of an individual's behaviour/usage, have allowed InCred to evolve its processes to be faster, more efficient, and still keep high-quality portfolios. This technological foundation and credit engine will provide InCred with a means to achieve growth in a scalable and efficient manner.

2. Diversified Revenue Streams

InCred operates in five different segments: consumer lending, educational finance, lending to SMEs, wealth management, and AIFs. Having each of these segments helps diversify revenues from any one part of the business and thus ensures an entity’s revenue is less cyclical and more balanced.

3. Strong Revenue Growth and Profit After Tax (PAT) Growth

InCred continues to show strong growth in revenue and profit through investment cycles. This increase in revenue and profit is driven by the increase in the number of loans disbursed to customers, increasing customer acquisitions, and a disciplined cost containment approach to achieve profitability on a larger scale.

4. Growing Retail and SME Credit Opportunity

The Indian market has a large opportunity for the growth of retail consumption and digital adoption (with low penetration levels of credit). InCred is well-positioned to meet the needs of salaried employees/customers, students, and small and medium-sized enterprises who are typically underserved by the traditional banking sector.

5. Improving Returns and Operating Leverage

As InCred's loan book continues to grow, the company will spread its fixed costs over an increasing number of loans, thereby increasing operating leverage. The company's high-quality assets will continue to provide the company with strong returns on assets and equity through the efficient collection of interest payments from borrowers.

6. Scalable National NBFC Platform

The use of a hybrid model that combines the benefits of digital distribution with an established and strong local presence allows InCred to rapidly scale without experiencing the same level of increase in costs that other companies typically encounter when expanding into new markets.    

This enables InCred to build a sustainable, profitable national NBFC platform.

Risks to Monitor

Investors must exercise caution even though NBFCs have robust fundamentals. Four main risks to be aware of:

1) Rising borrowing costs are likely to affect profit margins, as the NBFC sector is sensitive to interest rate fluctuations. Higher borrowing costs may reduce profit margins unless the company can pass higher borrowing costs along to the borrower.

2) Overall credit quality (if consumers, businesses and/or SMEs slow down on consumption, employment, and/or SME activities) will have an impact on repayment behaviours, and the need for continued vigour in underwriting and collection processes remains paramount.

3) NBFCs are subject to new regulations from the RBI, which may dictate how much capital their banks must hold, how much loan loss reserve they must maintain and what their corporate governance standards may look like.

4) Competition from our larger retail banks and new start-up fintech companies that are taking an increasingly aggressive approach in the marketplace means InCred must continue to innovate to remain competitive.

Investment View

Incred has transitioned from an aggressive growth NBFC to a more stable and expansive entity with high profitability. The company has achieved exceptional historical growth, improved cost efficiency for its loan book, greater diversification of its operations, and improved risk management capabilities.

• Outlook for the Company
• Continuing growth for Incred will see continued growth for the company.
• The growth of Incred's loan book is expected to grow substantially over the next few years.
• Incred's margins will remain elevated.
• Return ratios will continue to rise over the coming years.
• The expansion into new verticals (like asset management) will provide another source of earnings.
• If Incred grows conservatively through the next fiscal year (FY30), Incred will likely more than double in size on the strength of its increasing revenue, expanding profitability, and greater investor confidence.
• For long-term, growth-oriented investors, Incred is a great opportunity with a technology foundation, multiple lines of business, and the prospect of high growth.

Conclusion

Incred is an emerging, high-growth, technology-focused NBFC that has a strong base of operations, scalable business models, and long-term upside potential. Incred operates with solid risk management practices and the continued expansion of its product line. As a result, Incred is a strong candidate for investors seeking ongoing, high-growth investment opportunities in the financial services industry. For users interested in tracking or exploring this unlisted share, it is also available on Sharescart.