Business Highlights – Q2 FY27

Performance Metrics

  • Achieved highest-ever quarterly disbursements of ₹2,900 crore, registering 27.5% YoY and 9.7% QoQ growth
  • Gross Loan Portfolio (GLP) reached ₹15,323 crore, showing 22.0% YoY growth
  • Active customer base at 32.7 lakh customers served through 1,675 branches across 21 states and 394 districts
  • Collection efficiency improved to 98.1%, up 477 bps YoY, with X-bucket collection efficiency at 99.9%

Portfolio Diversification

  • Non-JLG portfolio increased to 31% of GLP from 17% six months earlier, exceeding FY27 target of 70:30 mix
  • Small and Micro Enterprise Loan portfolio scaled to ₹4,164 crore, accounting for 27% of GLP with near-zero delinquency
  • Secured lending portfolio strengthened to ₹653 crore
  • Gold loans through referrals and co-lending partnership with Muthoot Fincorp reached ₹453 crore disbursed in the quarter

Operational Efficiency

  • Digital collections increased to 46.7% of total collections from 25% in Q2 FY26
  • AUM per branch improved to ₹9.2 crore from ₹7.3 crore a year ago
  • AUM per loan officer reached ₹1.8 crore
  • Mahila Mitra app reached 22 lakh downloads

Risk Management

  • NATCAT insurance coverage mitigates climate and portfolio risks
  • On-book portfolio for Karnataka and Maharashtra affected districts amounts to 3.6% of portfolio, with 82% covered under NATCAT
  • Uneven monsoon and drought-like conditions had no material impact on portfolio

Financial Highlights – Q2 FY27

Income Statement

  • Total income grew 26.9% YoY and 9.3% QoQ to ₹732.9 crore
  • Pre-Provision Operating Profit (PPOP) increased 67.4% YoY to ₹249.4 crore
  • Profit After Tax (PAT) stood at ₹110.8 crore, registering 262.9% YoY growth
  • Net Interest Margin (NIM) improved by 50 bps QoQ to 12.5%

Asset Quality

  • GNPA improved by 123 bps YoY to 3.38% and reduced 32 bps QoQ
  • NNPA (net of Stage III provisions) reduced by 36 bps YoY to 1.05%
  • Credit cost at 2.6%, well within guided range of 2.5-3%

Cost Efficiency

  • Cost/Income ratio improved to 48.1%, down 557 bps QoQ and 1,173 bps YoY
  • Opex/GLP ratio reduced 96 bps YoY to 6.1%
  • Return on Assets (ROA) at 3.0%, improved 197 bps YoY
  • Return on Equity (ROE) at 14.8%, improved 1,021 bps YoY

Funding and Liquidity

  • Raised ₹3,213 crore during the quarter, taking H1 FY27 borrowings to ₹5,947 crore
  • Average cost of borrowing declined to 9.93%, entering single-digit territory for first time
  • Incremental cost of borrowing stood at 9.69%
  • Maintained strong liquidity position of ₹1,835 crore
  • Unavailed sanctioned credit lines of ₹4,442 crore
  • Capital adequacy ratio (CRAR) remained healthy at 25.5%

H1 FY27 Performance

Financial Summary

  • Total income: ₹1,403.5 crore, up 23.5% YoY
  • Pre-Provision Operating Profit (PPOP): ₹447.8 crore, up 55.8% YoY
  • Profit After Tax (PAT): ₹192.1 crore, up 423.4% YoY

Key Ratios

  • Net Interest Margin (NIM): 12.2%, improved 54 bps YoY
  • Cost/Income ratio: 50.7%, improved 962 bps YoY
  • Opex/GLP ratio: 6.2%, improved 72 bps YoY
  • Return on Assets (ROA): 2.6%, improved 205 bps YoY
  • Return on Equity (ROE): 13.0%, improved 1,025 bps YoY

Management Commentary

Thomas Muthoot, Chairman & Non-Executive Director

Emphasized the evolution of microfinance industry from credit access to livelihood enabler

Highlighted portfolio diversification with non-JLG portfolio reaching 31% of AUM

Noted cautious approach to growth anchored in asset quality despite macroeconomic environment

Mentioned CareEdge outlook revision to 'Positive' and CRISIL upgrade to AA-/Stable as reinforcing business strength

Sadaf Sayeed, CEO

Reported strong quarter across all parameters: business growth, portfolio quality, operational efficiency and profitability

Highlighted achievement of single-digit borrowing cost target in Q2 instead of end-FY27

Emphasized diversified asset mix resilience to macroeconomic climate risks

Noted benefits from operational efficiency and digital adoption including improved productivity metrics

Expressed confidence in achieving revised FY27 guidance and Vision 30-30 objectives

Rating Actions

  • CareEdge Global Ratings revised outlook to 'Positive' while reaffirming BB rating
  • CRISIL upgraded long-term rating to AA-/Stable and reaffirmed A1+ Commercial Paper rating

Forward Outlook

Company remains confident of achieving FY27 guidance revised upwards in Q1

Focused on long-term Vision 30-30 objectives

Continued balanced growth approach combining opportunities with prudent lending practices

Key Metrics Tables

Business Growth Metrics

| Particulars | Q2FY27 | Q2FY26 | YoY | Q1FY27 | QoQ |

| Gross Loan Portfolio (Rs. Cr) | 15,322.8 | 12,558.8 | 22.0% | 14,457.2 | 6.0% |

| Borrowers (Lakh) | 32.7 | 33.6 | -2.7% | 32.5 | 0.6% |

| Branches (No.) | 1,675 | 1,718 | -2.5% | 1,671 | 0.2% |

Financial Performance (₹ Crore)

| Particulars | Q2FY27 | Q2FY26 | YoY | Q1FY27 | QoQ |

| Total Income | 732.9 | 577.4 | 26.9% | 670.6 | 9.3% |

| Pre-Provision Operating Profit | 249.4 | 149.0 | 67.4% | 198.5 | 25.7% |

| Profit After Tax | 110.8 | 30.5 | 262.9% | 81.3 | 36.2% |

Key Ratios

| Ratio | Q2FY27 | Q2FY26 | YoY | Q1FY27 | QoQ |

| Net Interest Margin (NIM) | 12.5% | 11.9% | 57 bps | 12.0% | 50 bps |

| Cost/Income Ratio | 48.1% | 59.8% | -1173 bps | 53.7% | -557 bps |

| Opex/GLP Ratio | 6.1% | 7.0% | -96 bps | 6.3% | -29 bps |

| Return on Assets (ROA) | 3.0% | 1.0% | 197 bps | 2.3% | 67 bps |

| Return on Equity (ROE) | 14.8% | 4.6% | 1,021 bps | 11.2% | 355 bps |