Madhusudan Kela has built his investment reputation on acquiring businesses that the market has written off, then waiting for profits to materialize. According to reports from The Financial Express, his portfolio now contains two contrasting turnaround stories: SG Finserve, a supply chain lender that has delivered explosive growth, and IRIS RegTech Solutions, a regulatory technology company showing steady core growth. Both companies have moved from thin or negative profits to eye-catching growth, but face critical valuation questions about whether their turnarounds have further room to run.
SG Finserve transformed from a near-dormant Moongipa Securities into a specialized NBFC serving the APL Apollo supply chain ecosystem. As reported by The Financial Express, Kela acquired over 9.5 lakh shares (1.7% stake) in March 2025 when the company's market cap was approximately ₹4,616 crore. The five-year financial transformation shows remarkable growth with net profit increasing from ₹18 crore in FY23 to ₹128 crore in FY26, representing a 130% CAGR. However, the company's share price surged 17,400% from ₹4 in August 2021 to ₹700 by August 2026, trading at a PE ratio of 29x compared to the industry median of 21x. The recent quarters demonstrate continued momentum with net profit of ₹42 crore in Q1 FY27 and ₹54 crore in Q2 FY27, while management targets a loan book of ₹4,000 crore in FY26 and ₹6,000 crore in FY27.
Formerly IRIS Business Services, the company rebranded as IRIS RegTech Solutions and serves regulatory technology needs across banking, compliance, and central banking sectors. According to The Financial Express, Madhuri Kela holds approximately 5.2% stake (10 lakh shares) in the company. The five-year financial data reveals net profit of ₹127 crore in FY26, but this includes a ₹136 crore one-time gain from selling tax technology business to UK buyer Sovos. The genuine turnaround shows recurring revenue now exceeding 50% of total sales with ROCE of 11% and ROE of 90%, though the company maintains a low promoter holding of 35%. The company has secured significant contracts including work with Qatar Central Bank through Accenture, a multi-year Qatar tax authority contract, and a seven-year regulatory reporting project with NEC for a Gujarat financial hub regulator, with management targeting ₹500 crore revenue over the next few years.
Both companies face significant valuation challenges despite their turnaround stories. As reported by The Financial Express, SG Finserve trades at 29x earnings with only 10% ROE, while IRIS RegTech appears cheap at 4x PE but hides the one-off gain. The analysis reveals that SG Finserve's loan book growth depends on the APL Apollo ecosystem concentration, creating single-group dependency risks, while IRIS RegTech's everyday business remains small despite the ₹500 crore revenue target. The report emphasizes that SG Finserve's share price surge of 17,400% has created premium valuations that may not be sustainable, while IRIS RegTech's recent margin collapse to under 1% in H1 FY26 during the tax business transition shows operational volatility. The analysis concludes that turnarounds are about direction of travel rather than single financial metrics, with both companies requiring careful monitoring through FY27 to determine whether their turnarounds can sustain their current trajectories.
