Strategic Realignment Execution

The company completed its strategic realignment announced on February 7, 2026, focusing on high-yield businesses while exiting low-yield prime market verticals. Key achievements include:

  • Annualized cost reduction of ₹220 Cr achieved
  • Quarterly opex reduced from ₹205.3 Cr in Q4 FY26 to ₹118.5 Cr in Q1 FY27
  • Focused products (Emerging Market LAP and Embedded Merchant Finance) mix increased from 32% in Dec-25 to 46% in Jun-26
  • Prime Intermediated portfolio rundown at 14% QoQ in Q1 FY27
  • No incremental equity required for 3 years as per plan

Financial Performance

Income Statement (₹ Cr):

  • Interest Income: ₹363.0 Cr (QoQ -13%, YoY +19%)
  • Income on Co-Lending/Direct Assignment: ₹74.9 Cr (QoQ -52%, YoY -18%)
  • Other Income: ₹96.8 Cr (QoQ +56%, YoY +261%)
  • Total Income: ₹534.7 Cr (QoQ -15%, YoY +27%)
  • Finance Cost: ₹289.0 Cr (QoQ +2%, YoY +41%)
  • Employee Cost: ₹47.8 Cr (QoQ -40%, YoY -22%)
  • Total Opex: ₹118.5 Cr (QoQ -42%, YoY -2%)
  • PBT: ₹61.5 Cr (QoQ -14%, YoY +28%)
  • PAT: ₹67.9 Cr (QoQ +33%, YoY +99%)

Key Metrics:

  • AUM: ₹15,334 Cr (YoY +28%, QoQ -1%)
  • Portfolio Yield: 18.1% (YoY +69 bps, QoQ +63 bps)
  • Cost of Borrowings: 10.14% (YoY -41 bps, QoQ -2 bps)
  • GNPA: 2.6% (Mar'26: 2.5%, Jun'25: 2.5%)
  • NNPA: 1.9%
  • CAR: 21.0% (Mar'26: 21.2%)
  • Net Worth: ₹2,976 Cr
  • Leverage: 3.6x
  • ROA: 2.8% (annualized)
  • ROE: 9.2% (annualized, excluding equity component of CCDs)

Tax Benefit:

The company transitioned to the new tax regime effective FY27, lowering the marginal tax rate to 25.17% and resulting in a one-time tax windfall through reversal of Deferred Tax Liability. Tax expense for Q1 FY27 was negative ₹6.3 Cr.

Operational Highlights

Emerging Market LAP:

  • AUM: ₹3,896 Cr as of Jun'26 (↑9% from Mar'26)
  • GNPA: 2.1%
  • Q1 FY27 disbursement: ₹592 Cr
  • Blended branch productivity: ₹0.62 Cr (FY26: ₹0.48 Cr)
  • 317 branches across 13 states (build-out complete)
  • Mature branch productivity: ₹0.81 Cr/month

Embedded Merchant Finance (GROx):

  • AUM: ₹3,003 Cr as of Jun'26 (↑32% from Mar'26)
  • GNPA: 2.1%
  • Q1 FY27 disbursement: ₹1,853 Cr
  • Active customers: ~3.4 lakh as of Jun'26
  • 60,000+ loans disbursed monthly
  • 4x AUM growth in 5 quarters

Asset Quality & Collections

  • Stage 3 assets: 47% provision coverage ratio
  • Collection efficiency: 98% in Q1 FY27
  • Product-wise GNPA:
  • Emerging Market: 2.1%
  • Embedded Merchant: 2.1%
  • Other defocused products: 3.1%

Liquidity & Liability Management

  • Cash and cash equivalents: ₹1,864 Cr as of Jun'26
  • ~66% of borrowings beyond three years
  • Cost of incremental long-term borrowings: competitive rates
  • Diversified lender base

Corporate Developments

  • Stock exchange approval received for PCPL merger in Q1 FY27
  • Application for NCLT approval filed
  • Management remains confident of achieving strategic objectives within defined timelines

Guidance & Outlook

  • Target ROA of 3.0-3.5% by FY29
  • Maintain healthy capital adequacy with no incremental capital required
  • Expected blended branch productivity: ₹0.80-0.85 Cr/month over next 12 months
  • GROx disbursement run rate expected to continue at similar levels in FY27

Governance & Leadership

  • Board comprises independent directors, nominee/shareholder directors, and management
  • Professional management team with 200+ years cumulative experience
  • Strong corporate governance framework with special shareholder resolutions required for AoA changes