Record growth & ROE, but competitive pressure rising

Total disbursements INR6,676 Cr (28% YoY confirmed); AUM INR22,035 Cr (37% YoY)

CFO confirmed ROA 2.8% (24 bps QoQ from 2.56%), ROE 17% (153 bps QoQ from 10.9% 9Q avg)

Credit cost INR27 crore at 0.6% annualized, down 20.5% QoQ from INR34.1 Cr

Gold disbursements INR5,822 Cr (31% YoY); AUM INR11,917 Cr (77% YoY including price growth)

Mortgage AUM confirmed at INR9,982 Cr (13.5% YoY), below prior 15-20% guidance

Stage II increased 2.7% to 3.6% (in mortgages), Stage III 1.6% to 1.8%; MD attributed to new periodic-interest model & gold loan mix shift; gold loan Stage II still technical

Prior 'overall entity 20-22%' now specified as 'AUM 20-25% FY27'. Consistent, not changed; more precise.

Q2 ROA 2.8% (vs 2.4% start-of-year target); ROE 17% (vs 15% interim). Management maintaining 3% ROA & 18% ROE targets despite strong delivery. Conservative positioning given competitive headwinds.

13.5% YoY vs 15-20% guidance; credit costs declining (INR27 Cr from INR34.1 Cr QoQ). Management expects H2 reacceleration but execution on margin vs growth not yet proven.

Q2 noted as 'intense' vs Q1; MD confirmed yield pressure across NBFCs/banks. All yield levers being played; market-by-market strategies. Raises caution on margin sustainability.

Competitive intensity is real & heightened Q2 vs Q1. We use all yield levers—growth, LTV, yield strategies. We are one of few dropping yields only 10 bps Q1-Q2 where peers drop 50+ bps. Market-by-market strategies, focus on geographies where competition is lighter.

Technical. New periodic-interest billing model from April changed customer behavior initially. Gold loan Stage II is 3-month or 2.5-month behavioral tenor product. We've guided Stage I/II will be different for the year and continued to stick to guidance. Credit cost guidance of below 1% will manage it.

Already operating IGL product in Q2. Multiple products for Agri/MSMEs. LTV structures 75%, 78%, 80%, 85% based on cash flow. Mostly cash-flow based, not collateral-based.

Competitive pressure. We've guided small ticket LAP credit cost will be managed below 1%. It took us 3-4 quarters to stabilize. Now going bucket-negative on credit cost ST LAP side. In Q3/Q4, full pickup expected as credit cost normalizes.

Branch reaches INR6-7 Cr AUM in 12-13 months on average, crossing more for high-performers. Past 150 branches added last year hit INR6-7 Cr milestone. We will continue expanding—not constrained by opex ratio (4.9% this quarter, down from 5.3% FY26). Gold loan is branch-dependent for distribution.

Not explicitly addressed; capital focus remains on branch expansion and ensuring full lending book security. Capital adequacy at 21%, book value per share INR84.4.

No explicit upgrade. MD reaffirmed 20-25% AUM growth and 3% ROA target as previously guided, despite strong Q2 delivery. 'Very volatile environment' necessitates maintaining guidance without surprise. If gold prices rise, better upside; if flat, will still deliver 20-25%.

Will see good set of numbers on ST LAP side. Cannot give definite guidance but will be amongst last 8-9 quarters (best compared to recent 8-9). ST LAP yields will change due to market-by-market strategies and credit-cost improvements.

Reaffirmed despite 34% Q2 YoY delivery. Gold AUM growth 20-25% (vs 77% YoY with price); assumes modest price environment; tonnage growth 10-12% annually sustains base case.

Q2 at 2.8% (+24 bps QoQ); 9-quarter trajectory 2.1%→2.8% validates resilience model. Will maintain via gold/LAP mix, opex leverage, improved underwriting.

10.9% (9Q avg) → 17% (Q2) via capital adequacy improvement & NII expansion. One more quarter of similar performance likely achievable.

Q2 at 0.6%; gold loan operational GNPA 1.5%; mortgage GNPA declining. Full-year average expected well below 1% threshold.

Capital allocation to distribution infrastructure; branches reach profitability (INR6-7 Cr AUM) in 12-13 months. Opex ratio manageable at 4.9% despite expansion.

Competitive intensity in NBFC gold loans 'very high'; peers dropping yields 50+ bps; Fedbank dropped only 10 bps Q1-Q2 but sustainable yield floor uncertain. If intensity persists, 15-16% yields at risk.

Stage II in mortgages increased 2.7% to 3.6%; management attributes to periodic-interest billing model shift from April, but transition is not yet complete. If behavioral change persists, credit cost guidance (<1%) could breach.

Mortgage AUM grew 13.5% YoY, below 15-20% prior guidance. Credit cost stabilization post-April is expected to unlock growth in Q3/Q4, but execution risk exists if competitive pressures or yield/LTV trade-offs tighten further.

150+ branch planned for H2 FY27 (74 added Q2); if ramp-up is too aggressive, opex ratio (currently 4.9%) could deteriorate before new branches reach breakeven (12-13 months at INR6-7 Cr AUM).

Fixed-rate borrowing (33% of book) protects partially; MCLR-linked (24%) and EBLR (43%) exposed to transmission of rate hikes into cost of funds. While weighted average cost held flat at 7.8% Q2 vs prior quarters, further 50-100 bps hikes could pressure NIM.