Operational Performance - Q1 FY2027

Disbursements and Sanctions:

  • Sanctions: ₹938 crores (compared to ₹907 crores in Q1 FY2026)
  • Disbursements: ₹843 crores (compared to ₹829 crores in Q1 FY2026)
  • Disbursements affected in June quarter due to branch head transfers and second-line officer promotions conducted in April and May 2026

Assets Under Management (AUM):

  • AUM: ₹15,990 crores as of June 30, 2026 (excluding disbursed cheques not realized)
  • Year-on-year growth: 8.9%
  • Geographic concentration: 57% of book from Tamil Nadu
  • Customer profile: 53.5% non-salaried, 46.5% salaried segments
  • Product mix: 71% home loans, 29% home equity loans

Asset Quality

Gross NPA:

  • Absolute terms: ₹427 crores (June 2026) vs ₹405 crores (previous quarter) vs ₹485 crores (June 2025)
  • Ratio: 2.7% (June 2026) vs 2.6% (previous quarter) vs 3.1% (June 2025)
  • Marginal increase quarter-on-quarter but significant improvement year-on-year

Provision Coverage:

  • ECL provision: ₹352 crores cumulative as of June 30, 2026
  • Stage 3 PCR: 54%
  • Stage 2 assets: 7.2% (broadly stable vs 7% previous quarter, improved from 9.7% year ago)

Financial Performance

Profitability Metrics:

  • Net interest income: ₹216 crores (vs ₹207 crores in Q1 FY2026)
  • Net profit: ₹114 crores (vs ₹108 crores in previous year)
  • NIM: 5.4%
  • Spread: 3.4% for quarter ended June 2026
  • ROE: 12.7%
  • ROA: 2.9%
  • Cost-to-income ratio: 26%
  • Credit cost: 0.2%

Borrowings and Liability Management

Cost of Funds: 8.3%

Borrowing Mix:

  • Banking system: 86%
  • NHB: 6.2%
  • Repco Bank: 4.8%
  • NCD: 1%
  • CPs and PTC: 0.5%

Refinance Facility:

  • Received ₹600 crores refinance support from National Housing Bank
  • Already availed ₹106 crores during first week of August 2026
  • Remaining amount to be utilized shortly as needed

Branch Network and Expansion

  • Branch count: 242 branches (including 32 satellite centres)
  • No new branches opened in current quarter
  • Plan to open 12-13 new branches in current financial year, primarily in AP, Telangana, Karnataka, and western India

Management Guidance and Targets

Full Year FY2027 Guidance:

  • Disbursements: ₹5,000 crores
  • AUM growth: 13-14%
  • NPA reduction: ₹40 crores reduction target

Q2 FY2027 Targets:

  • Disbursements: ₹1,200-1,250 crores
  • NPA reduction: Bring down from ₹427 crores (June) to ₹405 crores (March level)
  • Spread: Expected to compress by 10-12 basis points due to competitive pressures and balance transfer outs

Strategic Initiatives

Recovery Strategy:

  • NPA accounts bifurcated into soft NPA (slippages from April 2025 to June 2026) and chronic NPA
  • Soft NPA: ~1,000-1,100 cases allocated to Regional Vertical Managers (40 accounts each)
  • Targeting 50% reduction in soft NPA (₹70-75 crores potential reduction)
  • Strengthened recovery agencies and revised timeline structures
  • Vigorous legal actions under SARFAESI

Technology and Structural Changes:

  • Completed IT transformation in two phases
  • Mobile applications rolled out improving turnaround time
  • API integrations with Perfios, CERSAI, and CIBIL
  • Verticalization implemented with separate verticals for recoveries, collections, NPA management, SARFAESI, and sales
  • Tie-ups with DSAs and recruitment of DSTs and connectors

Q&A Session Highlights

Pricing Strategy:

  • Interest rates start from 8.75% with average of 10.5% for housing loans
  • Pricing based on customer income, rating, CIBIL score, and risk assessment using 16-17 parameters
  • Target customers primarily from unorganized sector without sufficient income proof

Competition and Balance Transfer Outs:

  • Experienced spike in balance transfer outs in June quarter compared to March
  • Implementing retention strategies for customers with good track record (24 months+, good income source, LTV, CIBIL score)
  • Offering concessions and new incentive schemes for retention efforts

Growth Strategy:

  • Focus on expanding in non-Tamil Nadu states: Andhra Pradesh, Telangana, Karnataka, Maharashtra, Rajasthan, Gujarat, and MP
  • July and August disbursements in line with expectations
  • Maintaining aggressive growth stance while not compromising asset quality

Accounting Practice:

  • Moved to encashment basis accounting for disbursements and interest income recognition 3-4 quarters ago
  • Interest income booked only after cheque encashment, not at cheque handover