CSL Finance Limited conducted its Q2 and H1 FY27 Earnings Conference Call on November 03, 2026, moderated by TIL Advisors Pvt. Ltd. The management team included Mr. Rohit Gupta (Managing Director), Mr. Naresh Chandra Varshney (CFO), Mr. Chandan Kumar (Head Strategy and Business), Ms. Rachita Gupta (Whole Time Director), Mr. Atul Gupta (President, Finance and Treasury), and Mr. Chirag Gupta (Credit Head, Wholesale Segment).

Business Performance Overview

  • AUM Performance: As of September 30, 2026, total AUM stood at ₹1,627 crore, up 16% YoY from ₹1,397 crore and 8.8% sequentially from ₹1,505 crore in Q1 FY27.
  • On-book AUM: ₹1,578 crore, up 21% YoY and 7% sequentially.
  • AUM Mix: Shifted to 27:73 between SME retail and wholesale segments, compared to 13:87 a year ago and 13:87 at end of Q1 FY27.
  • Disbursements: Q2 FY27 disbursements reached ₹385 crore, up 31% YoY and 20% sequentially - the highest quarterly disbursement in company history. H1 FY27 disbursements stood at ₹706 crore, up 18% over H1 FY26.
  • Collections: Q2 collections at ₹298 crore, up 16% YoY and 5% sequentially. H1 FY27 collections reached ₹580 crore with collection efficiency improving to 99% from 98% in preceding four quarters.
  • Off-book AUM: Stood at ₹50 crore as of September 30, 2026, up from ₹33 crore at end of Q1 FY27, through joint lending structures.

Asset Quality

  • Gross NPA: 1.13% as of September 30, 2026, compared to 0.95% in Q1 FY27 and 0.51% in Q2 FY26.
  • Net NPA: 0.71% compared to 0.60% in Q1 FY27 and 0.39% in Q2 FY26.
  • Gross NPA Amount: ₹17.84 crore against ₹13.92 crore at end of Q1 FY27.
  • ECL Provisions: Total provisions stood at ₹19.67 crore (1.25% of loan book) with provision coverage ratio at 110.29%.
  • Write-offs & Recoveries: Q2 write-offs were ₹2.05 crore (lower than ₹2.87 crore in Q1 FY27) while recoveries stood at ₹1.44 crore.
  • Majority of the book is SARFAESI compliant, with expectations of improved recoveries as legal cases progress.

Financial Performance

  • Net Interest Income: Q2 FY27 stood at ₹49.6 crore, up 21% YoY and 10% sequentially.
  • Total Income: Q2 FY27 at ₹77.4 crore, up 21% YoY and 10% sequentially.
  • Profit Before Tax: Q2 FY27 at ₹35 crore, up 21% YoY and 18% sequentially.
  • Profit After Tax: Q2 FY27 at ₹25 crore, up 2% YoY and 13% sequentially. The PAT growth gap vs PBT is attributed to lower effective tax rate in base quarter Q2 FY26.
  • Return Ratios: Annualized ROE improved to 6.30% from 5.86% in Q1 FY27. Annualized ROA improved to 14.86% from 13.82%.
  • H1 FY27 Performance: Total Income ₹147.7 crore (up 20% YoY), PBT ₹64.7 crore (up 15% YoY), PAT ₹47.1 crore (up 3% YoY).

Operational and Funding Update

  • Branch Network: 35 branches across 7 states, with ongoing rationalization of non-performing branches and relocations to improve productivity in SME retail.
  • Lender Base: 35 lenders comprising public sector banks, private banks, SFCs and NBFCs.
  • Total Borrowings: ₹962.90 crore as on September 30, 2026.
  • Undrawn Sanctions: ₹210 crore (including NCD) compared to ₹90 crore at end of Q1 FY27, plus balance sheet liquidity of ₹76.8 crore.
  • ALM: Positive across all buckets.
  • Leverage Ratio: 1.5 times, well within thresholds.
  • Capital Adequacy Ratio: 40.87%.
  • Credit Rating: A-stable from Acuity Rating and Research.

Business Segment Details

Wholesale Segment:

  • Continued strong performance as primary driver of AUM growth
  • Healthy pipeline of ₹300-400 crore under due diligence/sanctioning
  • Focus on affordable housing segment (30-40% of portfolio) where sales remain strong through lottery system
  • 35% in small housing projects with no slowdown observed
  • 128 active projects funded, representing 80-90 builders
  • Exposure limits maintained with conservative lending approach

SME Retail Segment:

  • In consolidation phase due to over-leveraged borrower profiles, stagnant MSME income growth, and competitive intensity
  • Internal measures: tightened credit policy, branch rationalization, team strengthening, focus on 10-50 lakh ticket size
  • Stopped lending beyond ₹50 lakhs and reduced focus on below ₹10 lakh segments
  • No new NPAs in last 18 months
  • Recent improvement with best two months of FY27 in September-October
  • Expect better performance in H2 FY27 as consolidation measures yield results

Strategic Outlook

  • Wholesale segment expected to continue driving AUM growth through H2 FY27
  • Continued focus on joint lending structures to build off-book AUM and fee income
  • SME retail disbursements expected to improve in H2 FY27
  • Disciplined growth approach with priority on asset quality and conservative leverage
  • No plans for new product verticals (gold loans, vehicle finance) in next 15-18 months
  • Focus on consolidating existing SME LAF portfolio