Financial Performance Highlights (Q2 FY2027)

  • Assets Under Management (AUM) stood at ₹16,425 crore, representing a 9.2% year-on-year growth
  • Net profit for the quarter was ₹116 crore, compared to ₹106 crore in Q2 FY2026 and ₹114 crore in Q1 FY2027
  • Disbursements reached ₹1,205 crore, exceeding the guidance of ₹1,200 crore and significantly higher than ₹843 crore in Q1 FY2027
  • Gross NPA improved to ₹396 crore (2.4%) from ₹475 crore in September 2025 and ₹426 crore in June 2026
  • Stage 2 assets reduced to ₹1,154 crore from ₹1,324 crore in the corresponding period previous year
  • Provision coverage ratio stood at 66%
  • Net Interest Margin (NIM) was 5.44%
  • Return on Assets (ROA) was 2.9% and Return on Equity (ROE) was 12.5%
  • Capital adequacy ratio remained strong at approximately 37%

Business Composition and Portfolio Metrics

  • Non-salaried accounts represent 53.6% of the book while salaried accounts account for 46.4%
  • Housing loans constitute 71% of AUM while non-housing loans make up 29%
  • Zero exposure to builder loans
  • Average ticket size is ₹23-25 lakhs incrementally and ₹14 lakhs for the overall book
  • 57% of the book comes from Tamil Nadu, with the remainder from other states

Funding and Liability Management

  • Overall borrowing cost stood at 8.35%
  • 86% of funding comes from the banking system spread across 19-20 banks
  • 7.2% of funding comes from National Housing Bank (NHB) refinance
  • NHB has sanctioned ₹600 crore refinance facility for FY2027, of which ₹106 crore was utilized in Q1 and ₹125 crore in Q2
  • Raised ₹75 crore through commercial papers at 7.6% in Q2
  • Executed pass-through certificate of ₹74 crore at 7.9% cost
  • Repco Bank funding accounts for approximately 1% of total borrowings

Strategic Initiatives and Operational Updates

  • Completed digitalization program in two phases including core application implementation and mobile applications
  • Implemented verticalization with separate verticals for sales, recovery, collections, operations, credit and SARFAESI management
  • Expanded branch network to 242 branches across the country, with plans to open another 13-14 branches in FY2027, majority in non-Tamil Nadu regions
  • Increased sourcing channels through DST recruitment and connector model expansion
  • Controlled BT Out (balance transfer out) by offering concessions to retain quality customers

Management Guidance and Outlook

Q3 FY2027 Guidance:

  • Disbursement target: ₹1,300-1,350 crore

Q4 FY2027 Guidance:

  • Disbursement target: ₹1,650-1,700 crore

Full Year FY2027 Guidance:

  • Gross NPA target: Below 2% (from current 2.4%)
  • Profit expectation: ₹480-490 crore
  • Credit cost: Expected to charge ₹5-6 crore to P&L for provisions in H2 FY2027

Dividend Declaration

  • Board declared interim dividend of ₹5 per share (face value ₹10)

Interest Rate Environment Impact

  • Entire liability and asset portfolio is floating rate
  • Expects borrowing costs to increase by 10-15 basis points due to RBI rate hikes
  • Plans to pass on cost increases to borrowers with one quarter time lag
  • Targets maintaining spread around 3.25-3.3%

Asset Quality and Recovery Efforts

  • NPA reduction achieved through specialized recovery verticals and SARFAESI actions
  • Target to reduce gross NPA to below 2% by March 2027 (16-year low)
  • No stress observed in South Indian markets including Karnataka
  • Cheque return ratios remain stable without significant spikes

Management Changes

  • Mr. B. Kannan appointed as Whole-Time Director & Chief Development Officer replacing Mr. Vaidyanathan
  • Change described as routine administrative decision without operational impact