Regency Fincorp Limited Q2 & H1 FY27 Earnings Conference Call Transcript

Key Business Performance Metrics

Assets Under Management (AUM):

  • AUM stood at ₹610.25 crores as of September 30, 2026
  • More than threefold year-on-year growth
  • Secured loan book grew 7 times YoY to ₹452 crores (from ₹60.5 crores as of September 30, 2025)

Digital Lending Platform (CashMySalary):

  • H1 FY27 disbursement: ₹125 crores
  • More than 87,000 active loans
  • Serves customers across 26 states and 4 union territories
  • Coverage: Over 15,250 pin codes
  • New platform JetFund launched offering instant salary advance and personal loans (₹20,000 to ₹1 lakh)

Secured MSME Lending:

  • Cumulative disbursement: Approximately ₹252 crores as of September 2026
  • 2,366 active loans
  • Property-backed lending with LTV of 60%

Financial Performance

Q2 FY27 Results:

  • Total Income: ₹32.44 crores (240% YoY growth)
  • Profit After Tax: ₹9.01 crores (170.37% YoY growth)

H1 FY27 Results:

  • Total Income: ₹49.87 crores (164% YoY growth)
  • Profit After Tax: ₹16.3 crores (146% YoY growth)
  • Both total income and PAT for H1 FY27 surpassed full FY26 figures

Profitability Metrics:

  • Net Interest Margin: 7.54% in H1 FY27 (vs 3.51% in H1 FY26)
  • Supported by high-yield portfolio mix and lower blended cost of funds

Asset Quality:

  • Gross NPA: 0.99% as of September 2026
  • Net NPA: 0.75% as of September 2026
  • Target: GNPA below 1.25% and NNPA below 1%

Funding and Capital Structure:

  • Raised ₹425 crores through NCDs and term loans during H1 FY27
  • Outstanding borrowings: ₹505 crores as of September 30, 2026
  • Capital Adequacy Ratio: 28.55%
  • Debt-to-Equity Ratio: 2.66 times
  • Optimal leverage target: Not more than 3.5 times net worth

Strategic Initiatives and Fundraising

Preferential Issue:

  • Board approved proposed preferential issue of approximately ₹312 crores on October 16, 2026
  • Proceeds intended for:
  • Acquisition of a digital lending platform
  • Acquisition of a gold loan business
  • Onward MSME lending
  • General corporate purposes (branch network expansion, hub-and-spoke model development)

Expected Capital Impact:

  • Net worth expected to increase from ₹190 crores to ₹290 crores by March 2027
  • Net worth expected to reach ₹615 crores by March 2028 once preferential issue fully paid up

Acquisition Timeline:

  • Digital lending platform acquisition: 3-9 months (staged completion)
  • Gold loan business acquisition: 3-4 months (subject to approvals)
  • Gold loan acquisition: Majority stake (upwards of 50%), not 100%

Growth Outlook and Guidance

FY27 Targets:

  • AUM: ₹900-950 crores by end of FY27
  • PAT: ₹40-42 crores or higher for full FY27

Portfolio Strategy:

  • Maintain 70% secured portfolio (MSME + gold loan)
  • Maximum 30% exposure to digital lending
  • Average ticket size: Currently ₹50-55 lakhs, expected to increase to ₹75 lakhs

Long-term Projections:

  • FY28 AUM target: ₹2,000 crores
  • FY29 AUM target: ₹3,000 crores

Cost of Funds:

  • Current blended cost: 12.35% (down from 13.5% at beginning of year)
  • Target: 10.75%-11.25% by FY27 end

Operational Details

Employee Strength: 390 employees

Office Expansion: Moved into large office space in Noida

Technology Initiatives: AI-enabled EMI reminders, digitizing disbursement, e-KYC, and e-sign processes

Subsidiary Information:

  • Regency Fin Technology (subsidiary) booked ₹14 crores revenue but added only ₹1 crore profit
  • Subsidiary focuses on building digital lending infrastructure
  • No revenue sharing model between subsidiary and parent company

New Initiatives:

  • JetFund: Targeting ₹50-55 crores AUM by March 2027
  • Regency Pay: Awaiting RBI license approval, expected current quarter

Q&A Session Highlights

Asset Quality: Management confident in maintaining GNPA below 1.25% and NNPA below 1% through secured lending focus (collateral coverage >100%, LTV 60%)

Funding Strategy: Equity raise proceeds will not be used for lender repayment; adequate cash flows available for debt servicing

Growth Drivers: Expansion through new customer acquisition rather than existing portfolio growth; digital lending focused on salaried customers with 2 years ITR and 6+ months employment