Management Participants

  • Mr. G. Ramesh - MD & CEO
  • Mr. Jaykumar Shah - CFO
  • Mr. Vishal Patel - Head Investor Relations

Macroeconomic Context

Management noted Indian economy resilience with RBI revising FY27 GDP growth projection to 7.1%. RBI changed monetary policy stance to calibrated tightening and increased repo rate by 25 basis points on October 7, 2026. Uneven monsoon distribution and its impact on food production and inflation remain key monitorables.

Business Performance Highlights by Vertical

Enterprise Lending (Unsecured Loans, LAP, Gold Loans):

  • Q2 disbursements grew 25.5% YoY
  • LAP + EBL (mortgage book) disbursements grew 30% YoY
  • Gold Loan disbursements grew over 60% YoY
  • Unsecured Business Loans returned to sequential growth trajectory
  • Portfolio quality and collections remained stable

Asset Finance:

  • Commercial Vehicle book grew 8% YoY
  • Construction Equipment book grew 12% YoY
  • Noted seasonality effect in asset quality, expected to normalize

Consumer Finance:

  • Disbursements grew over 25% YoY
  • Book expanded 22% YoY
  • Consumer Durables book grew 49% YoY
  • Auto Loan book grew 22% YoY
  • Relationship PL (cross-sell product) grew 16% YoY
  • Portfolio quality and collections remained stable

Technology Initiatives (Project Shikhar)

  • AI-led customer onboarding project initiated for consumer finance business
  • Over 20% of early bucket collection calls now handled by AI-powered bots

Financial Performance for Q2 FY27

  • Customer franchise: 24.8 million (up 18.4% YoY)
  • Disbursements: ₹18,522 crores (up 18.7% YoY)
  • Gross loan book: ₹1,24,469 crores (up 11.7% YoY, 2.2% QoQ)
  • Secured loans: 73.9% of gross loan book
  • Profit after tax: ₹780 crores (up 34% YoY)
  • Gross Stage 3 (GNPA): 2.43% (vs 2.81% YoY, 2.34% QoQ)
  • PCR: 55%
  • Net interest income: ₹2,534 crores (up 15.6% YoY)
  • Net interest margin: 8.23% (vs 7.95% YoY, 8.35% QoQ)
  • Cost-to-income ratio: 39.3% (vs 40.7% YoY, 39.9% QoQ)
  • PPOP: ₹1,756 crores (up 16.9% YoY, 1.7% QoQ)
  • Credit cost: 2.37% (vs 2.32% prior quarter)
  • ROA (annualized): 2.42%
  • ROE: 14.4%
  • EPS: ₹9.4
  • Book value per share: ₹266.7
  • Capital adequacy: 21.37%
  • Interim dividend: ₹2 per equity share declared with record date of October 23, 2026

Q&A Session Key Points

NIM Outlook:

  • Management aims to maintain NIM in narrow range around current levels
  • Expect minor impact from recent 25bps repo rate hike
  • LAP book (floating rate) provides ability to pass on rate increases
  • ~55-60% of bank borrowings linked to repo rate

Growth Trajectory:

  • Expect growth momentum to improve in Q3 and Q4 FY27
  • Targeting movement toward industry median growth rates (17-18%)
  • Enterprise Lending showing healthy growth across segments
  • Asset Finance challenges primarily in Used CV segment, with actions underway

Asset Quality:

  • Stage 2 increase attributed to seasonal effects in CV portfolio
  • Expect normalization in coming quarters
  • Maintain credit cost target range of 2.3% +/-

Operational Efficiency:

  • Cost-to-income improvement driven by productivity initiatives
  • Headcount reduction through technology enablement, not footprint reduction
  • Retailer/dealer touch points increased 10% to 1.65 lakh+

Regulatory Impact:

  • Monitoring potential IRDAI consultation on insurance commissions
  • FY26 insurance commission was ₹455 crores (0.3% of RoA)
  • Working with FIDC on representations to regulator

Drought Impact Assessment:

  • Limited direct exposure to affected regions
  • Primary concern is potential inflationary impact from food prices
  • Tractor portfolio exposure in drought-declared areas is small

Forward Outlook

Management expressed confidence in strong H2 performance driven by festive season demand. Focus remains on maintaining NIMs above 8%, delivering RoA of 2.5%+, and achieving growth trajectory improvement through diversified franchise strengths.