Management Participants

  • Mr. Manu Singh - Managing Director and Chief Executive Officer (subject to RBI approval)
  • Mr. Ghanshyam Gupta - Interim Chief Financial Officer
  • Mr. Rakesh Shinde - Head of Investor Relations

Financial Performance Highlights

Profitability:

  • Net profit grew 23% YoY to ₹1.71 billion in Q1FY27
  • Net Interest Income (NII) grew 18% YoY
  • Pre-provisioning operating profit grew 22% YoY to ₹2.33 billion
  • Return on Assets (ROA) improved 25 bps YoY to 3.19%
  • Return on Equity (ROE) improved 78 bps YoY to 13.34%

Margin Performance:

  • Net Interest Margin (NIM) expanded 22 bps YoY to 7.70%
  • Spread moderated to 5.06% during the quarter
  • Cost of funds improved 38 bps YoY
  • Cost-to-income ratio improved 254 bps YoY to 43.7%
  • Operating cost-to-assets ratio improved 9 bps YoY to 3.37%

Business Growth:

  • Disbursements grew 41% YoY to ₹16.1 billion
  • Assets Under Management (AUM) grew 15.4% YoY to ₹239.3 billion
  • Home loan segment grew 38% YoY
  • Monthly AUM addition improved by nearly 50% YoY
  • Net worth grew 16% YoY to ₹52.2 billion

Asset Quality Metrics

  • 1+ DPD improved 39 bps YoY to 3.76%
  • Gross Stage 3 (NPAs) improved 11 bps YoY to 1.11%
  • Net Stage 3 improved 13 bps YoY to 0.71%
  • Credit costs stood at 24 bps

Funding and Liquidity

  • Raised ₹14.74 billion at competitive rate of 7.74% during Q1
  • Total outstanding borrowings stood at ₹207 billion
  • Borrowing composition: 42% linked to external benchmarks (Repo, T-Bill, MIBOR), 34% linked to sub-3 months MCLR
  • Maintained liquidity of ₹18.8 billion including cash, cash equivalents and unavailed CC limits
  • Documented unavailed sanctions: ₹4.85 billion
  • Capital Adequacy Ratio (CAR) at 44.66%

Operational Highlights

  • Branch network expanded to 440 branches across 15 states
  • Implemented 10 bps reduction in PLR effective June 2026 (cumulative 25 bps reduction since March 2026)
  • Focus on improving productivity per resource from current ₹8-10 lakhs to ₹20-22 lakhs

Strategic Priorities and Guidance

  • Focus on accelerating customer acquisition and improving productivity
  • Targeting sustainable 20% growth over medium term
  • Current year guidance: 22-23% disbursement growth, 17-18% AUM growth
  • Expect spreads to moderate below 5% due to competitive environment
  • Focus on regaining market share in home loan segment (current portfolio mix: 65% HL, 35% NHL)

Risk Management and Outlook

  • No geographical or customer segment stress observed
  • Proactive policy changes implemented in February for segments potentially affected by West Asia conflict and rainfall uncertainty
  • Collections remain under control with healthy trends on lead and lag indicators
  • Commitment to maintaining credit quality guidance

Q&A Session Key Points

Competitive Environment: Management acknowledged healthy competition across geographies with pressure on spreads, expecting spreads to go sub-5% but confident in maintaining ROE/ROA through operating levers.

Repayment Rates: Small uptick in early part of fiscal in specific segments (interest rates upwards of 14%, small ticket) but normalized by June. No alarming trends in BT out.

Disbursement Run Rate: June monthly disbursement exceeded ₹600 crores. Company committed to 22-23% disbursement growth and 17-18% AUM growth for the year.

Asset Quality: No specific geographical stress. Proactive measures taken for segments affected by Middle East crisis and fuel crisis (tours, travels, restaurants).

Productivity Targets: Aiming to double productivity per resource from ₹8-10 lakhs to ₹20-22 lakhs over two years.

Home Loan Strategy: Conscious focus on increasing HL mix to maintain 65-35 portfolio balance, involving tactical resource orientation and direct sourcing to counterbalance yield compression.

PLR Reduction: June PLR cut was based on ALCO mechanics considering external and internal factors. Disbursement yield and portfolio yield are largely in tandem post cuts.

RBI Circular: Asset classification changes for repossessed assets under evaluation.

Builder Loans: Company clarified it does not do builder loans, only HL, NHL, LAP, and MSME products.