Key Financial Performance Metrics

Consolidated Performance (Q2 FY27):

  • Gross Total Income: ₹235 crores (48% YoY growth)
  • Net Total Income: ₹161 crores
  • Pre-Provision Operating Profit (PPoP): ₹95 crores
  • Provisions and Write-offs: ₹26 crores
  • Profit After Tax: ₹51 crores (compared to ₹8 crores in Q2 FY26)
  • Net Interest Margin (NIM): 18.2%
  • Annualized Return on AUM: 6.7%
  • Annualized Return on Equity: 20.5%

Half-Yearly Performance (H1 FY27):

  • Gross Total Income: ₹436 crores
  • PPoP: ₹172 crores
  • PAT: ₹97 crores (compared to loss of ₹7 crores in H1 FY26)
  • Already surpassed entire FY26 PAT of ₹57 crores

Asset Under Management (AUM) and Growth

  • Consolidated AUM: ₹3,209 crores (first time crossing ₹3,000 crores)
  • YoY Growth: 51%
  • Q2 Disbursements: ₹818 crores (72% YoY growth, 19% sequential growth)

Subsidiary Performance - Namra Finance (Microfinance)

  • AUM: ₹2,424 crores (61% YoY growth, 12% QoQ growth)
  • Q2 Disbursements: ₹654 crores
  • Gross Total Income: ₹168 crores (56% YoY growth)
  • Net Total Income: ₹113 crores
  • PPoP: ₹67 crores
  • PAT: ₹34 crores (compared to loss of ₹1 crore in Q2 FY26)
  • H1 PAT: ₹63 crores (compared to ₹13 crores for entire FY26)
  • NIM: 16.6% (improved from 15.37% in Q1)
  • Active Customers: 5 lakh as of September 2026

Standalone Business Performance

  • AUM: ₹784 crores (26% YoY growth, 3% sequential growth)
  • Portfolio Composition: MSME (74%), LAP (13%), Two-wheeler (12%)
  • Q2 Disbursements: ₹164 crores
  • Gross Total Income: ₹68 crores (30% YoY growth)
  • PPoP: ₹27 crores
  • PAT: ₹17 crores
  • H1 PAT: ₹32 crores

Asset Quality Metrics

  • Overall Collection Efficiency: 96.5% (stable)
  • GNPA: 2.73% (vs 2.76% in Q1)
  • NNPA: 0.92%
  • X Bucket Collection Efficiency: 99.4% (marginal seasonal decline during monsoon)
  • Namra GNPA: 2.59% (largely unchanged from Q1)
  • Namra NNPA: 1.01%
  • Namra Net Write-offs: ₹12 crores for the quarter

Operational Improvements and Business Updates

  • Digital collections reached 49% of microfinance collections through UPI and e-NACH
  • Individual lending accounts for almost 40% of microfinance portfolio
  • Structural separation of credit and recovery teams showing results: loans under new structure show 15% lower default rates
  • Cost-to-income ratio improved to 42.6% in Q2 FY27 from peak of 51.7% in Q4 FY26
  • Operating expenses target: reduce to 7% of AUM by March 2027 (currently at 8%, down from peak of 9-10%)

Capital and Liquidity Position

  • Consolidated Shareholders' Equity: ₹1,033 crores as of September 30, 2026
  • Capital Adequacy: Arman standalone 36.26%, Namra 37.19% (both well above regulatory requirements)
  • Liquidity: ₹334 crores (including cash, bank balances, liquid investments, undrawn cash credit limits)
  • Additional Undrawn Sanctions: ₹150 crores from existing lenders
  • Total Borrowings: ₹2,659 crores (including off-balance sheet direct assignment liabilities)
  • Borrowing Sources: Diversified across banks, NBFCs, financial institutions, NCDs, direct assignments
  • Incremental Borrowing Cost: Reduced from 11.7% in Q1 to 11.3% in Q2
  • Rating Updates: Acuité reaffirmed A- rating with outlook revised from stable to positive; CARE reaffirmed A- with stable outlook

CGFMU Credit Guarantee Scheme Status

  • Scheme renewal pending government approval (original 10-year period ended)
  • Loans originated until March 31, 2026 remain covered
  • Loans from April 1, 2026 currently not covered but expected to become eligible upon renewal
  • Coverage as of September 30: 51% of microfinance portfolio, 30% of MSME portfolio
  • Management emphasized that credit guarantee is additional protection, not substitution for underwriting

Risk Factors and Monitoring

  • Uneven monsoon patterns and El Niño conditions causing concern
  • Maharashtra and Karnataka declared droughts in many talukas (together account for 7.6% of consolidated AUM)
  • Marginal deterioration in repayment behavior in Maharashtra post-drought declaration
  • Monitoring state, district, and branch level performance closely
  • Prepared to slow lending in affected geographies if necessary

Management Commentary and Outlook

  • Historically stronger performance expected in H2, especially Q4
  • Healthy demand across all lending segments
  • Credit processes, collection structure, technology capabilities significantly improved
  • Sufficient capital and liquidity to support further growth
  • Focus on maintaining underwriting discipline while pursuing growth opportunities

Q&A Session Highlights

  • Competition: Still exists but some banks pulling back from direct microfinance lending; rejection rates remain high industry-wide
  • Branch Capacity: Processing ~110,000 applications monthly, disbursing to 25,000-30,000 customers after assessment
  • Drought Impact: 1% dip in fresh delinquencies in Maharashtra in October; monitoring closely but not overly concerned
  • CGFMU Impact: Provisioning increased due to non-availability for new loans; potential P&L neutral impact if scheme renewed retrospectively
  • UPI MDR: Potential cost impact if borne by company; industry seeking exemption
  • Growth Target: INR5,000 crores AUM achievable in 18 months without additional capital raise
  • Opex Target: Aiming for 6% of AUM long-term (currently 8%)