Management Participants

  • Mr. Umesh Revankar – Executive Vice Chairman
  • Mr. Parag Sharma – Managing Director and Chief Executive Officer
  • Mr. S. Sunder – Joint Managing Director and Chief Financial Officer
  • Mr. Sanjay Kumar Mundra – Executive Director – Investor Relations Head

Economic Context Provided by Management

Mr. Umesh Revankar provided context on macroeconomic indicators affecting business:

  • India's Q1 GDP growth at 7.8% for FY26-27
  • IMF raised India's GDP growth forecast to 7% for 26-27 from 6.4%
  • Retail inflation rose to 5.54% in September from 4.82% in August
  • Wholesale inflation climbed to 11.39% in September from 9.92% in August
  • RBI increased repo rate by 25 bps to 5.5% and shifted policy stance to calibrated tightening
  • 2023 southwest monsoon concluded at 87% of long period average with drought conditions affecting 51.2% of India's geographical area
  • GST collections rose 14.7% YoY to ₹2.04 lakh crore in September

Operational Performance Highlights (Q2 FY27 vs Q2 FY26)

Disbursements: ₹54,079.02 crores vs ₹43,019.17 crores, growth of 25.71% YoY

Assets Under Management (AUM): ₹3,29,021.72 crores vs ₹2,81,309.46 crores, growth of 16.96% YoY

Sequential growth of 4.85% from Q1 FY27 AUM of ₹3,13,798.39 crores

Net Interest Income: ₹8,661.04 crores vs ₹6,266.84 crores, growth of 38.2% YoY

Profit After Tax: ₹3,677.03 crores vs ₹2,307.18 crores, growth of 59.37% YoY

Sequential growth from Q1 FY27 PAT of ₹3,444.56 crores

Net Interest Margin: 9.52% vs 8.19% in Q2 FY26 and 9.04% in Q1 FY27

Earnings Per Share: ₹15.63 vs ₹12.27 in Q2 FY26 and ₹14.83 in Q1 FY27

Asset Quality Metrics

Gross Stage 3: 4.65% vs 4.57% in Q2 FY26 and 4.64% in Q1 FY27

Net Stage 3: 2.31% vs 2.49% in Q2 FY26 and 2.33% in Q1 FY27

Credit Cost on Total Assets: 2.03% vs 1.68% in Q2 FY26 and 1.66% in Q1 FY27

Cost Ratios

Cost to Income Ratio: 22.52% vs 27.76% in Q2 FY26 and 25.48% in Q1 FY27

Liability Profile

Total Liability: ₹2,36,271 crores breakdown:

  • Public deposits: 31%
  • Non-convertible debentures (capital market borrowing): 15.71%
  • ECB loan and bond: 16.5%
  • Domestic bank borrowing and institutional borrowing: 21%
  • Securitization: 14%

Cost of Liabilities: 8.41% vs 8.56% in previous quarter (reduction of 15 bps)

Incremental Cost of Funds: 7.3% vs 7.7% in previous quarter

Capital and Liquidity

Liquidity Coverage Ratio: 303% vs 262% in previous quarter

Leverage Ratio: 2.16 times vs 2.14 times in previous quarter and 3.82 in March

Capital Adequacy Ratio: 33.24% vs 34% in previous quarter

Dividend Declaration

Board declared interim dividend of ₹6.5 per share (325%)

Record Date: October 29, 2026

Segment-wise Performance Discussion

MSME Segment:

  • Disbursement growth driven by geographical expansion beyond southern markets
  • 28% of MSME portfolio is unsecured, 72% secured
  • Asset quality pressure attributed to seasonal monsoon impact in certain geographies

Gold Loan Segment:

  • AUM of approximately ₹9,000 crores
  • LTV maintained at 72-73%
  • Q2 disbursements of ₹5,443 crores vs ₹5,153 crores in Q1
  • Increase in Stage 2/3 attributed to customer adaptation to EMI products from traditional bullet repayment

Construction Equipment:

  • Segment showing recovery with 23% industry growth in Q2
  • Absolute gross Stage 3 amounts declining quarter-on-quarter (₹874 crores to ₹862 crores)

Management Guidance and Outlook

Growth Guidance: Revised to 15-17% for FY27 from initial 18% guidance due to monsoon impact and geopolitical concerns

Credit Cost Guidance: Long-term guidance of 2% maintained, with temporary increase of 30-40 bps expected for 1-2 quarters due to seasonal factors

NIM Outlook: Expected to moderate to ~9% in medium term and ~8.5% in long term due to capital utilization and interest rate environment

Cost to Income Ratio: Medium to long-term guidance of around 25%

Q&A Session Key Points

Asset Quality: Management attributed increase in Stage 2/3 to seasonal monsoon impact in drought-prone areas (Maharashtra, Karnataka, Telangana) and expects normalization

Funding Cost: Expect incremental borrowing cost to remain around 8%, with potential increase to 8.35% if rates continue rising

Liquidity Utilization: Excess liquidity largely utilized, borrowing program resumed at pre-March levels with ₹27,000 crores borrowed in last quarter

IRDA Circular Impact: Potential impact of ~₹100 crores on insurance commission income (from ₹350 crores annually), considered immaterial to overall business

Growth Strategy: Cautious approach in drought-affected regions, but maintaining expansion plans across India

Closing Remarks

Management expressed confidence in outperforming in the busy season (second half) despite headwinds from West Asia crisis and weak monsoon conditions.