Forensic Analysis: Findi ASX:FND - Stocks Under The Hood

📅 July, 2025
🌐 Website: https://findi.co/

Here is a forensic financial analysis of Findi (ASX:FND), based on its FY25 Annual Report (year ended 31 March 2025).

📊 Balance Sheet

Risk Indicator	Status	Comments
Goodwill >25% of Assets	🔴	Goodwill = $39.7M; Total Assets = $323M → 12% from Tata/BankIT acquisitions, but intangible assets overall ~$62M (19% of total) and rising rapidly.
Rising Receivables Days	✅	Receivables grew only slightly (to $8.2M from $8.1M) while revenue increased ~13%. No concerning rise observed.
Inventory Growth vs Profit	🟠 Not Applicable	No inventory reported (services business). Not applicable but flagged as 🟠 to note working capital sensitivity to contracts.
High Borrowings	🔴	Total borrowings ~$123M ($85M current), Net Debt rising, finance costs up ~3x ($29.4M), Debt-to-Equity ~1.9x (258M liabilities vs 64M equity).
Loans to Related Parties	✅	No material related party loans disclosed beyond normal intra-group balances.
Idle Cash	🟠	~$115.9M cash balance, but significant earmarked deployment. However, cash held exceeds 18 months of opex without detailed return disclosures.

📈 Income Statement

Risk Indicator	Status	Comments
Revenue vs Profit Divergence	🔴	Revenue up 13%, but NPAT swung from $4M profit to ($12M) loss driven by finance costs and one-off debenture restructure. Underlying profitability questionable.
Capitalised R&D/Interest	✅	No large capitalisation of R&D; most intangible growth is goodwill from acquisitions. No major hidden costs observed.
Extraordinary Items	🔴	$7.2M extraordinary income write-back, improving EBITDA materially. This indicates reliance on non-recurring items.
Tax Rate Drop	✅	Effective tax benefit due to losses. No unexplained low tax rate.
Profit vs Cash Flow	🟠	OCF ($17.5M) materially below EBITDA ($33.3M), indicating large working capital/cost drag.
One-Off Gains Boosting Profit	🔴	Write-back of $7.2M provision plus revaluation gains; without these, EBITDA and NPAT would have been weaker.

🏛️ Governance, Disclosure & Audit

Risk Indicator	Status	Comments
Auditor Changes	✅	Hall Chadwick continues as auditor. No recent changes disclosed.
Audit Qualifications	✅	Clean audit opinion.
Exec Departures	🟠	CEO change mid-strategy: Mohnish Kumar transitioned to Vice Chairman. No major rationale elaborated.
Transparency Issues	🟠	Extraordinary income and significant transaction impacts disclosed but diluted across notes; segment profitability clarity limited.
Board Weakness	✅	Board includes experienced finance professionals and independent directors.
Executive Pay Misalignment	🔴	Chairman remuneration jumped from $150k to $675k amid swinging to losses. Board remuneration >$1.4M while net loss increased.
Promotional Language	🟠	Repeated promotional claims (“transformative milestones,” “unparalleled financial access”) despite poor earnings.

🧠 Strategic Risk Factors

Risk Indicator	Status	Comments
Chronic Unprofitability	🟠	FY25 loss was primarily transactional, but 3-year profitability track record inconsistent. Loss narrowing uncertain.
Revenue < Capex	🟠	~$17M capex + ~$75M acquisitions vs $75M revenue; heavy reinvestment phase with unclear payback timelines.
Funding Dependency	🔴	Equity raises in FY25 ($40M placement + SPP), plus debt refinancing. Repeated external funding critical to operations.
Customer Concentration	🟠	Major contracts with State Bank of India, Union Bank, and Central Bank—customer concentration risk likely >50%.
Pre-commercial Product Risk	✅	Core business operational with revenue streams; no pure pre-commercial dependence.
Short Cash Runway	✅	Cash holdings sufficient for >12 months operations.
Regulatory/Compliance Exposure	🟠	Heavy reliance on RBI licences, acquisition integration risk.
Leadership Turnover During Expansion	🟠	CEO transitioned mid-expansion. Management continuity not fully explained.

✅ Final Summary

Category	🔴 Red Flags	🟠 Amber Flags
Balance Sheet	2	2
Income Statement	3	1
Governance / Disclosure	1	3
Strategic Risk Factors	1	4

🔴 Total Red Flags: 7
🟠 Total Amber Flags: 10

🟠 Amber & 🔴 Red Flag Overview

🔴 High Borrowings: Debt-to-equity approaching 2x with finance costs tripling.
🔴 Extraordinary Items & One-off Gains: $7.2M non-recurring write-back and revaluations masked underlying losses.
🔴 Executive Pay Misalignment: Chairman and board fees rose sharply during a swing to losses.
🔴 Funding Dependency: Equity raises and debenture restructuring are critical to liquidity.
🔴 Revenue vs Profit Divergence: Revenue rose while NPAT fell into loss.
🔴 One-Off Gains Boosting Profit: Extraordinary income contributed materially to reported EBITDA.
🟠 Idle Cash: Large cash holdings without clear disclosure of return strategy.
🟠 OCF vs EBITDA: Cash flow lagged EBITDA significantly.
🟠 Transparency: Disclosures of transaction impacts fragmented across notes.
🟠 Leadership Turnover: CEO transitioned during major expansion.
🟠 Customer Concentration: Dependence on large public sector banks.
🟠 Capex vs Revenue: Heavy investment relative to annual turnover.
🟠 Chronic Unprofitability: Inconsistent profitability trend.
🟠 Regulatory Exposure: Reliant on RBI licences, regulatory compliance critical.

Forensic Analysis: Findi ASX:FND - 12 month daily price chart with 3EMA and volume indicators

Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.

Forensic Analysis: Findi ASX:FND