Recovery firming, but growth pace falls short of 20% AUM target

Revenue +5.4% YoY, PAT +1.9% YoY; disbursements strong but AUM only +4% QoQ

Q1 pace ₹13,722 Cr AUM, +4% QoQ = ~16% annualized if sustained

Q1 ROA 8.11%, below guidance floor

Q1 credit cost 1.85% at high end of revised range

Collection efficiency 97.9%, current book 83.3%, 30+ book 12.38%; trends improving QoQ

Current book 83.3% (up 0.61 ppts QoQ), 30+ book 12.38% (down 0.31 ppts); collection efficiency 97.9% despite Q1 seasonal weakness

Q1 ₹1,496 Cr (+23% QoQ, +16% YoY); June at ₹670 Cr suggests ₹600–650 Cr normalized monthly run, up from ₹400s pre-crisis

4% QoQ vs 20% FY27 target; high disbursements not converting to AUM growth due to repayments still elevated

8.11% Q1 vs 8.25–8.5% FY27 target; opex at 6% (up from ~5% historically), NIM flat

Opex +20–21% YoY (employee costs up); steady-state 5.25–5.5% opex ratio not expected until FY28

FY27 opex will stay 5.75–6%, no leverage. FY28 onwards leverage kicks in; steady-state 5.25–5.5%.

Yes, bulk done. Yield at 22.5%, likely settle at 22.25%. Another 10–15 bps over next 2 qtrs.

Slippages trending down starting Q2. Recoveries up to ₹35 Cr. No ARC sales. NPAs will trend down.

Collections trends up 7–8 months. Cash flows intact. Watch energy costs, regulator liquidity call.

Coming quarters slippages will trend down. Will guide on steady-state after 1–2 qtrs of data.

Business/collections split freed up business teams. No demand shortage. Productivity gains. Current indicators strong logins, sanction-to-MOD conversion.

Incremental ~8.5% (vs current 8.33%). 20–30 bps compression likely if no repo hike. ADB ECB adds hedging costs.

Gold price corrections happening. Overlap with MFI down from 20–21% to 16–17%. Cash flows adequate even if not improving.

Target mix: 25% ₹5L. Getting reflected in portfolio. Current average ~₹5L.

Collections stronger so repayments higher. Policy change: best customers no longer asked to prepay existing loan before top-up. Should trend to 27–28% from current 30%.

FY27 guidance ₹225–250 Cr (₹60 Cr Q1 run rate). Technical write-offs for tax/GNPA positioning. Will stabilize once softer bucket trends hold.

Maintain overall coverage 1.75–1.8%; mix of Stage 1/2 and Stage 3 adjustments per portfolio composition. FY28 credit cost ~1.6–1.7%.

Thumb rule: Stage 1 ~91%, Stage 2 ~6–7%, Stage 3 ~2.5% (steady-state NPA sub-3%). Current ~87–88%, 1–30 ~3–4%, 31–60/61–90 ~3–3.5% each.

Yes. No ESOP. Salary realignment, incentive structure. Operating leverage from FY28. Normal 50–60 branch additions FY27.

Incremental cost expected ~8.5%, not current 8.33%. Adequate lines available. Took ₹450 Cr this qtr; holding ₹1,850 Cr liquidity.

Medium-term, 6–8 quarters. Depends on growth trajectory and new product diversification. Adding ₹1,100–1,200 Cr PAT annually offsets leverage build.

Housing already launched but not prioritized. New product apart from that. Will announce in 3–6 months. Addition to 20% AUM growth, not included.

Average ticket ₹4.5–5L this quarter, will stay there. Intent not to add smaller customers but right quality at ₹5L avg.

Assuming ₹1,500 Cr Q1 run rate + 10% for seasonal Q3–Q4, implies ₹6,500–6,800 Cr annual; comfortably hits 20% growth.

No cultural shift. Business teams still responsible for current account collections. Incentives dependent on collection % and growth. Only arrears moved to collections team.

Current 8% ROA on AUM. Steady-state ROA target 6–6.5%. At 3x leverage, ROE 18–20%.

Borrowing cost relief (11%+ → 9%+). Board decision to pass 200 bps to customers. Not regulatory-driven. Lending rates will track borrowing cost.

June ₹670 Cr. Average ₹600–670 Cr monthly should be new normal for rest of year.

Q1 pace 4% QoQ implies ~16% annualized; management says 'very comfortably' achievable with ₹1,500 Cr disbursement run-rate + 10% seasonal boost

Q1 at 1.85%; management expects trend toward 1.7% given improving collections, slippage stabilization

Q1 delivered 8.11%, below floor; opex at 6% this year offsets credit cost gains; ROA pressure until FY28 leverage kicks in

Q1 added 12 branches (mostly Maharashtra), normal run-rate. No abnormal capex beyond branch infrastructure expected.

4% QoQ AUM pace in Q1 implies 16% annualized, 400 bps below 20% FY27 guidance. Repayments still elevated as collection efficiencies normalize. Unlikely to hit target without material acceleration.

Q1 ROA 8.11% fell below 8.25–8.5% guidance floor. Opex at 6% (vs 5% historically) due to employee cost inflation. Even with credit cost improvements, NIM flat limits ROA recovery.

Management guiding for 8.5% incremental borrowing cost; if RBI raises repo, cost could exceed guidance. ADB ECB tranche adds hedging costs. Spread compression risk if rate hike occurs.

Collections currently strong (97.9%, current book 83.3%) but Q1 is seasonally soft. Energy cost inflation and potential liquidity tightness (regulator price hike) cited as headwinds. If customer cash flows deteriorate, slippages could reaccelerate.

Yield at 22.5%, management expects ~22.25% steady-state. Likely another 10–15 bps compression over next 2 quarters. Lending rate dropped 200 bps October 2024 to track borrowing cost.