High LeverageA debt-to-equity ratio above 3x materially limits financial flexibility and raises refinancing and solvency risk during stress. For an NBFC, high leverage amplifies earnings swings from credit or interest-rate shocks and constrains the firm's ability to expand the loan book without additional external funding.
Weak Cash ConversionVery low and volatile cash generation undermines internal funding for lending and increases reliance on external borrowings. Persistent weak cash conversion limits capacity to build reserves, meet short-term obligations, and finance growth without raising costly capital, elevating structural liquidity risk.
Profitability VolatilityA steep margin decline and prior years' non-operating swings point to inconsistent earnings quality. Persistent profitability volatility erodes retained capital, complicates planning and regulatory capital management, and makes long-term return projections and dividend/capital policies less reliable.