AUM beats guidance, ROA shortfall persists amid strong YoY growth

Q1 delivered 26% AUM growth vs 22-25% prior guidance. Direct-to-customer at ₹10,000 Cr (64% of ₹16,855 Cr total) near target of 65%.

Q1 delivered 2.6% credit cost vs 2.7-2.8% prior guidance. GNPA improved to 1%, NNPA 0.5%. Better-than-expected portfolio quality.

Q1 delivered 2.7% ROA vs prior guidance >3%. Still 100 bps short. Management reaffirmed target but no new mechanism disclosed for acceleration.

New explicit guidance: 9.5% NIM next quarter (Q2), ~10% by year-end. Prior call did not specify timeline. Driven by yield expansion and fee growth (funds, placement).

Long-term target remains 15-17% ROE in 8-10 quarters. Delivered 11.5% in Q1. Early to assess multi-year trajectory, but progression slow so far.

No new overlay. The ₹66 Cr from March persists. We took conservative good-book provisions in segments like Intermediate Retail, but no Stage 3 deterioration detected in any account.

No deterioration. Volatility is normal Q1 effect; higher volumes disbursed in Q3-Q4 cause Q1 slowdown. No Stage 3 additions. Conservative provision taken on good book.

About 50% LAP, 50% merchant (~₹1,000 Cr merchant book). Both showing strong cohort performance and leading/lagging indicators. Average ticket LAP ₹12-15L, quality customer segment.

430 branches today; adding 50-60 this year. Added 230 sales staff in Q1. Focus on higher sales-per-store via AI-enabled LAP journey to cut turnaround to 3 days. Both MFI and LAP should grow healthily in coming quarters.

Productivity gains as D2C scales, better underwriting/collection tools, fee franchise expansion (funds, placement). Quarterly progression expected. Committed to disciplined execution.

Credit solution disbursements back-ended to late June; yields not fully realized. Overall FY27 NIM guidance on track. Movement quarter-to-quarter expected but full-year targets will be met or exceeded. Historical trend shows NIM expansion from 5.5% to 9.4%, so trajectory intact.

Credit Solutions will grow 8-10% full year. Not degrowing; shifting mix toward funds. Expanding DSAs (30+ digital, 50+ direct partners), diversified. Cohort-level performance tracking better-than-expected across all segments.

Well diversified. 30+ digital partners, 50+ direct. Diversification applies at sector, product, geography, district, and partner level. Core guardrails on concentration are non-negotiable at Northern Arc. Agility to dial up/down based on opportunities.

70% of industry growth is gold (prices up 3x in 3 years). MFI up 19% QoQ, consumer up 15% QoQ, MSME up 1% QoQ. Overall growth moderated. Consumer larger because easier to execute with digital partners. Brick-and-mortar requires more groundwork.

Yes, thesis is D2C gets more profitable. Mature D2C assets today make 4%+ ROA. Key: higher sales-per-branch as Pragati productivity increases via better underwriting/fulfillment. Output-per-employee will improve as things stabilize and scores tested.

Cost of funds stable 8.5-8.6% range this year. Some debt repricing in next 2 quarters may add 5-10 bps. No major increase expected. Benchmark rates up 50 bps, hedge cost up 75 bps, but locked in positions well.

Capital adequacy 22.7% very comfortable. Debt-equity 3.1x vs regulator comfort 4-4.5x. No equity raise needed for next 2 years. Highly profitable, adding good net worth every quarter. Can fund 22-23% growth without equity.

Business should continue to grow. Deep 5-10 year partnerships, not short-term. Start small, test cohorts, then expand. Offer comprehensive solutions (balance sheet, funds, placement, tech, data, securitization). Embed ourselves in partner success. Strong track record with early-stage companies who later hit capital markets.

Yields have been up except Q1 (back-ended credit solution disbursements). NIM will reach 9.5% next quarter and ~10% by year-end. Loaded NIM expansion from fee growth (funds 110 bps, placement pipeline strong). Fee to grow from 50 bps to 70-80 bps of revenue.

Aviom more than adequately provided (75% provision). Two-pronged approach (direct assignment + unsecured IR book). Kinara fully done and dusted, securitized and taken over. May see some upside as settlement happens, but not commenting on timing now.

Delivered 26% YoY in Q1, beating range. D2C growing >50% YoY, credit solutions 8-10% full year. Expect continued momentum.

Current 9.3% in Q1. Expansion from yield growth and fee composition expansion. Credit solution timing inflated fees this quarter; should normalize.

Delivered 2.6% in Q1 within prior 2.7-2.8% guidance. GNPA improved to 1%, NNPA 0.5%. Conservative provisioning approach supports cost discipline.

Currently ~50 bps. New funds and placement business recovery expected to drive expansion. Target based on funds growth and placement pipeline.

Held stable this quarter. Despite adding 230 sales staff and expanding branches, efficiency metrics maintained via AI-enabled processes and automation.

West Asia crisis, supply chain disruptions, inflation/interest rate complexity. Global economy navigating heightened uncertainty; local impact via employment, rural income.

Delivered ROA 2.7% vs >3% guidance, ROE 11.5% vs 15-17% multi-year target. Margin pressure QoQ (NIM -50 bps) despite YoY expansion. Path to 30-bps ROA improvement unclear.

19 FLDG-backed digital partners in consumer finance, still in early validation. Rapid 50%+ YoY growth in D2C consumer, but cohort-level performance data aggregated, not partner-specific.

Benchmark rates up 50 bps in 6 months, hedge cost up 75 bps. Market liquidity tight; some debt repricing expected in next 2 quarters (+5-10 bps estimated).

PAT -14% QoQ despite +45.8% YoY growth. Timing of credit solution disbursements (back-ended to June) caused uneven revenue realization.