Key Financial Performance Metrics

Disbursements & AUM Growth

  • Quarterly disbursements reached a historical high of INR1,496 crores, representing 23% growth over previous quarter (Q4 FY26) and 16% growth year-over-year (Q1 FY26)
  • Assets Under Management (AUM) stood at INR13,722 crores as of June 30, 2026, showing 4% sequential growth
  • Company achieved milestone of 500,000 active loan customers as of June 30, 2026

Asset Quality Metrics

  • Unique customer collection efficiency: 97.9% (vs 98.1% previous quarter)
  • X-bucket collections: 99.2% (vs 99.3% previous quarter)
  • Current book improved to 83.30% (vs 82.69% previous quarter)
  • 30-plus book reduced to 12.38% (vs 12.69% previous quarter)
  • Slippages remained flat at 0.70% compared to previous quarter
  • Credit cost dropped to 1.85% for Q1 FY27 from 1.88% in Q4 FY26
  • Provision coverage on Stage 3 book remains healthy at over 40%
  • Overall provision coverage on AUM at approximately 1.8%

Profitability & Returns

  • PAT for the quarter: INR271 crores
  • Net worth as of June 30, 2026: INR7,653 crores
  • ROA: 8.11%
  • ROE: approximately 14.5%

Borrowing Costs & Margins

  • All-inclusive borrowing cost: 8.33%
  • Cost of funds on book decreased to 8.80% from 8.95% in Q4 FY26
  • Yield decreased by 12 basis points quarter-over-quarter
  • Spread increased by 3 basis points due to greater reduction in cost of funds
  • NIM remained flat

Operational Highlights

Branch Network Expansion

  • Added 12 branches during the quarter, primarily in Maharashtra
  • Total branches: 856 as of June 30, 2026

Business Strategy & Productivity

  • Implemented vertical split between business and collections teams
  • Strong traction in logins and sanctions converting to MODs
  • Focus on maintaining current book collections above 99%
  • No change in credit filters or policies despite increased disbursements

Guidance & Outlook

FY27 Guidance Reaffirmed

  • AUM growth guidance: 20%
  • Credit cost guidance: 1.7% to 1.9%
  • Gross NPAs expected to fall to sub-3%
  • Write-offs expected at INR225-250 crores for full year (Q1: INR60 crores)
  • Opex growth expected around 20-21% YoY
  • Current book expected to reach 85% by year-end (currently 83.3%)
  • 30-plus book expected below 12% by year-end

Medium-Term Targets

  • Steady-state credit cost: 1.6% to 1.7% from FY28 onwards
  • Target portfolio mix: 25% at ~INR3 lakh, 50% at ~INR5 lakh, 25% at ~INR10 lakh ticket size
  • Steady-state opex: 5.25% to 5.5% (currently 6%)
  • Target ROE: 18-20% with 3x leverage
  • Target leverage: Debt-to-equity of 2x in 6-8 quarters

Yield & Cost Outlook

  • Yield expected to settle around 22.25% (current: less than 22.5%)
  • Incremental cost of borrowing expected around 8.5%
  • Spreads expected to remain flat assuming no policy rate changes

Product Diversification Plans

  • Planning to launch new product within 3-6 months
  • Housing product already launched but not yet focused on
  • Intent to diversify beyond single product offering

Asset Quality Context

  • Collections trends improving for past 7-8 months
  • No current asset quality stress observed
  • Monitoring energy cost increases and regulatory liquidity decisions
  • Rollback rates: 4-5% in 31-60 day bucket, 2-3% in 61-90 day bucket
  • Overlap with microfinance customers reduced from 20-21% to 16-17%

Capital Structure & Funding

  • Liquidity position: INR1,850 crores on balance sheet
  • Incremental borrowing of INR450 crores in Q1
  • ADB ECB tranche pending with hedging cost considerations
  • Strong ability to raise debt at appropriate costs

Employee & Cost Structure

  • Employee cost increases due to competitive compensation adjustments
  • No ESOP component at branch level
  • Attrition rates currently flat
  • Focus on improving disbursement per employee and AUM per employee

#Tags: #FiveStarBusinessFinance #Q1FY27Results #EarningsCall #NBFC #SEBIDisclosure #RegulatoryCompliance #FinancialUpdate #Neutral