Beat, raised guidance, asset quality improves—but rates are tightening

AUM Rs. 9,317 Cr (+68.4% YoY, +16.4% QoQ). Repeat customers rising, ticket size to Rs. 43K from Rs. 34K YoY

Gross NPA 2.18% (down 75 bps YoY), Stage-2 2.37% (down 174 bps YoY), credit costs 6.2% AUM (down 310 bps YoY)

PAT Rs. 125 Cr (doubled YoY, +31.6% QoQ). Operating profit Rs. 287 Cr (+40% YoY, +12% QoQ). ROE 21.65%, ROA 5.78%

LAP AUM Rs. 737 Cr (7.9% of total), growth 15-20% QoQ. Profitability achieved Q2 vs earlier Q3 estimate

Borrowing cost 13.76% (down 70 bps QoQ from 14.45%). Finance cost down 12% QoQ. Incremental borrowing at 12.1%

Given strong H1 momentum (68% YoY), management raised FY27 AUM growth from 40%+ to 60%+. New guidance implies next 2 quarters at 50%+ after 68% in Q2.

Was 10-15% guidance; now saying >15% YoY based on credit cost at 6.2% (vs 9.3% a year ago). Q4 credit cost expected ~5.8% or lower.

Achieved 21.65% in Q2. Management reiterated confidence in maintaining >20% despite macro headwinds and capital dilution from IPO/preferential issue.

Original guidance was LAP profitable by Q3; achieved profitability in Q2 (one quarter early), showing better-than-expected unit economics and cost control.

Was 14.45% last quarter; now 13.76% (down 70 bps). Incremental borrowing at 12.1%. Next 3-4 quarters expected to see another 150 bps decline as legacy debt matures.

Three drivers: (1) deepening existing customers (repeat rate up, ticket size of repeats up), (2) targeting higher-quality customers (higher income, longer tenure), (3) tenure increasing (average tenure now 17.8 months from lower base).

Three benefits: (1) cost of funds down (repo up but our borrowing cost fell 70 bps), (2) operating leverage kicking in, (3) risk cost down (15% reduction). We pass part of benefit to customers but keep enough for ROE.

Yes. Current blended cost 13.76% (vs 14.45% last quarter). Incremental borrowing cost 12.1%. Legacy debt at high rates rolls off; expect 150 bps decline over next 3-4 quarters.

Three channels: (1) app sourcing (income >20-30% higher than before), (2) aggregators (UPI, broking, wealth firms), (3) corporate partnership. CAC for high-quality ~Rs. 1,200 vs blended Rs. 850.

Yes, with full conviction. Guidance >15% YoY reduction. Currently 6.2%; expect 5.8% or so by year-end. High-quality customer shift, tighter underwriting, AI-driven models all contributing.

Sustainable. Driven by high-quality customer selection, continuous improvement in Stage-1 mix, improved collection efficiency (97.12%), and AI models catching stress early. This is business as usual for us.

Already kicking in. Expect 40-50 bps OPEX/AUM improvement QoQ. Large fixed-cost base in LAP branches; collection cost dominates. As we scale, benefit will accrue. Room for many quarters.

Monsoon softness <6% of portfolio. Gold loan <8% (and performing well despite concerns). MFI overlap <3.4%, KCC <2.6%. Drought areas <6%. All within comfort; we monitor daily and tweak policy.

Hard ceiling Rs. 3 lakhs, barely breached. Current average Rs. 43K will likely reach Rs. 41K by year-end (per leadership, the trend is up but gradual). High-quality cohort can go 2-3 lakhs, but we stay conservative on customer-level exposure.

Shares issued by Nov 3-4. Proceeds already received; final regulatory sign-off in 4-5 days. 75% to subsidiary (balance sheet support, growth), 25% to corporate expenses and AI tech investment.

No. Till AUM reaches Rs. 30K Cr we don't need capital. Current capital adequate. IPO was front-loaded; preferential issue tops up.

Three pillars: (1) continued PL growth with high-quality focus (2.5x AUM in 2 years implied from 60%+ guidance), (2) LAP diversification (product expansion Gold Loan, Auto Loan), (3) tech-led risk reduction. Not pure PL anymore; will be multi-product, risk-differentiated by segment.

Average ticket size was Rs. 34K a year ago, now Rs. 41K (20% increase). Trend will continue—mix shift to high-quality (higher income, higher loans) and tenure extension (longer tenure = higher size). Will keep increasing gradually but deliberately; no jerk upward.

Based on H1 momentum (68% YoY in Q2). Implies ₹9.3K → ~₹15-16K Cr by FY27 end. Growth driven by PL deepening, LAP scale, and high-quality customer shift.

Borrowing cost 13.76% (down 70 bps QoQ). Incremental borrowing 12.1%. Legacy debt matures; expect 150 bps decline over 3-4 quarters. NIM expansion despite rate hikes.

Large fixed-cost base in collections/LAP. As AUM scales and ticket size rises, leverage emerges. Benefit crystal clear, will sustain.

Pre-prov operating profit up 40% YoY; post-prov PAT doubled. Risk cost down 310 bps YoY. If credit costs stay on guidance (>15% reduction), margins supported.

Repo at 5.5% (up 25 bps); urban discretionary softness noted (monsoon, GST collection +14% YoY, FMCG growth 8.6%, e-commerce <20% festive). Cost of borrowing down 70 bps this quarter but 150 bps relief over 3-4 quarters assumes RBI holds. Further hikes would compress margins.

Gold loans ~8% of portfolio (flagged as risk in Sept 2025, curbed lending to gold-exposed customers). MFI overlaps 3.4%, KCC 2.6%. Drought-affected areas 6%. While all actively monitored, if credit cycle turns, these are stress vectors.

LAP became profitable Q2 (vs Q3 guidance), but profitability ahead of curve may not repeat. Sustaining 15-20% QoQ growth over 2 years to reach 15% of AUM requires consistent unit economics; any moderation in credit quality or rise in branching costs could derail.

IRDAI proposed changes to insurance commissions and loan-link insurance terms. Kissht offerings voluntary; insurance <1.4% of income. Not a material risk, but a regulatory overhang.

While LAP is growing, PL still dominates at 92% of AUM. Diversification into Gold Loan, Auto Loan is early-stage. Concentration risk if credit cycle turns sharply in PL segment.