30% PAT growth belies sequential softness, execution risk on co-lending

30% YoY PAT growth and 128% disbursement growth strong; but PAT down 15.1% QoQ and revenue essentially flat QoQ (-0.2%)

Delivered ₹67,074M (₹670.74 Cr), ~28% growth from ~₹523 Cr base

₹17,309M (₹173.09 Cr) disbursed, exceptional momentum; validates distribution scaling

NIM at 6.6%, above prior guidance of ≥6.5%

Delivered 0.70% and 0.49%, excellent despite record disbursement pace

YoY strong (30% PAT, 19% revenue); QoQ weak (PAT -15.1%, revenue -0.2%); not yet reinforcing

Q1 FY27 disbursement ₹173 Cr vs ₹77 Cr in Q1 FY26 (128% YoY), vs Q4 FY26 ₹150 Cr (15% sequential). Distribution expansion (5,299→5,995 touch points) and 6 new product lines driving volume.

SBI co-lending remains at status quo; compliance bottleneck on bank side delays disbursements. Was expected to expand in Q1-Q2, now timeline unclear. Material growth headwind versus prior calls.

Q1 collection efficiency 97.5% vs Q4 98.5%. Attributed to portfolio maturation and rapid new customer additions; YoY trend solid but sequential decline is a watch item.

Cost of borrowing 10.1% in Q1 vs 10.74% in Q1 FY26 (64 bps down). Reflects diversified funding, improved credit standing, and market conditions. Well below 13% in FY21.

AI bots expanded 7→18; on-boarding apps 1.6M→1.8M; voice-to-data convergence 3.5M→5M; outbound calls 1.5M→2M per day. Cost-to-income ratio 40%, near-term elevated but long-term leverage building.

Status quo; awaiting bank-side compliance clearance. Disbursements slow but hoping to progress soon.

Most borrowers are micro-traders and manufacturers; macro impact limited. Sequential loan loss provision increase noted but still well below 1% level.

Touch points grew 696 in 4Q; 6 new products launched. Quarterly growth may normalize from exceptional base, but company expects healthy momentum through FY27 with robust credit demand and pristine asset quality.

Ratio ~40% now. Short-to-medium term will remain slightly elevated as AI efficiencies ramp; long-term normalization expected as lending models mature and automation kicks in.

200k calls are for existing Paisalo customers (collections/engagement). New customer conversion calls start Q3 end with 3 new product launches. Detailed breakdown: QC checks, collection platform, portfolio management pillars.

Fund raise and deployment lag: debt issued but not yet fully deployed into loan book (transient Q1 impact). Collection efficiency down due to Q1 additions; YoY loans reduced 10%. Provisions up due to Q4 end-of-year settlements; credit cost historically <2% except COVID.

Internal ceiling ~3.5x (RBI allows 7x). Current 2.6x includes ₹44M FCCB due for conversion; post-conversion, leverage will decline. Comfortable headroom to raise capital.

Listed since 1996. Promoters invested ₹180-185 Cr via warrants 3-4 years ago, adding 5% stake each year since. Strong conviction in momentum across growth, distribution, technology, asset quality; stands out in market where others exit.

No specific targets yet; products are 3 months old. Maintains max 25% per segment concentration. Agri currently 15%, could range 10-20%; vehicle 3%, could reach 10%. Equal weightage planned across new lines; difficult to forecast near-term.

Four pillars: (1) distribution expansion (5,995 touch points, 696 added in 4Q); (2) product diversification (6 new products); (3) AI scaling (1.8M apps, 5M voice, 2M calls/day); (4) liability management (cost down 64 bps). Compounding together with evidence already visible in AUM vs employee growth.

Framework benefits co-lending/co-origination ecosystem; faster STP integration. Paisalo portfolio 93% already secured; only 7% unsecured but with floating charges on assets. Competitive advantage in cash flow-based lending and technology-led underwriting will grow as collateral becomes less restrictive.

Result of distribution pillar strategy and deeper penetration execution. Expansion reflects ongoing branch-led growth and asset-light model leveraging BC network. Sustainable growth built on customer access and engagement.

Targeting 3 fiscal years. Co-lending treated as optionality; if it clears compliance and accelerates, timeline could shorten. For now, 3 years is the planning horizon, but acknowledged potential upside from regulatory tailwinds.

Collections are the #1 priority after AUM/income/PAT. Portfolio quality prioritized over aggressive growth; 30-year collection-first mindset. Employees are the true asset (not on P&L/balance sheet) and key driver of scalability.

Employee engagement and team capability; they are the true promoters of the business on field and engagement levels. Not captured in balance sheet but fundamental to scaling.

Implies ~26% CAGR. Supported by 28% YoY growth in Q1, four-pillar strategy, and institutional partnerships. On track if momentum sustains.

Delivered 6.6% in Q1; well above threshold. Supported by improving liability cost (10.1% vs 10.74% prior year) and pricing power in MSME segment.

Leverage debt and partnerships (banks, OEMs) to grow; BC network and product diversification reduce capex needs. NCD issuance funds deployment without capex blowout.

SBI co-lending remains at status quo; bank-side compliance bottleneck delays disbursements. Was expected to expand Q1-Q2 but timeline now unclear. Represents material headwind to 3-year doubling target.

PAT fell 15.1% QoQ (₹72.3 Cr → ₹61.3 Cr) despite capital raising. Interest expense +32% QoQ but opex -32%; funds raised but not yet deployed. Raises questions on capital deployment efficiency and near-term profitability trajectory.

Collection efficiency fell 1% QoQ to 97.5% (from 98.5% in Q4). Attributed to rapid new customer additions maturing and portfolio composition shift. Not yet a red flag but trend bears close monitoring.

D/E ratio rose from 1.64x (2022) to 2.61x (Q1 FY27). While still below internal 3.5x ceiling and RBI's 7x limit, trajectory is upward and limits future borrowing capacity if growth accelerates.

Food & hospitality represents 23% of AUM, agri-allied 15%, street vendors 16% — top 3 segments are 54% of portfolio. While management maintains 25% max per segment, food & hospitality is near ceiling and vulnerable to downturn.

Iran war and commodity price fluctuations present macro risk. However, Paisalo's portfolio is heavily micro-enterprise and small traders with limited exporter exposure; impact is indirect and muted.