Solid execution shadowed by spread compression and sequential weakness

Delivered: 23.0% YoY growth, ₹171.3 Cr vs ₹139.3 Cr prior year

Consistent with delivered result; on target for reported figures

Q1 only 15.4% YoY; FY27 guidance 17-18%. Below medium-term target.

Q1 spread 5.06%; guiding for spread to fall below 5%. Prior guidance missed.

Q1 ROE 13.34%, which is mid-teens. High-teens typically 15%+.

Q1 credit costs 24 bps. Well within guidance.

Reported 254 bps improvement to 43.7%. Significant operational leverage achieved.

FY27 guidance 17-18% AUM growth vs. prior 20%+ medium-term target. Reflects near-term caution.

Prior guidance maintain spreads >5%; now guiding sub-5%. Q1 at 5.06%, ~10 bps reduction since March PLR cuts.

254 bps improvement YoY to 43.7% vs. prior ~46%. Real operational efficiency gains now visible.

1+DPD at 3.76% (39 bps better YoY), gross NPAs at 1.11% (11 bps better). Resilient portfolio.

Management now explicitly targeting HL volume recovery with resource reallocation. Prior calls did not emphasize this.

Healthy competition across geographies; spreads will compress below 5%. ROE/ROA stable via cost-to-income and income-side levers. Home loan focus acknowledged as slightly margin-negative but offset by direct sourcing benefits.

Small seasonal uptick in April-May in high-rate segments; normalizing by June. AUM filling speed improving. BT-out rates tapered normal.

June: ₹600 Cr. FY27 guidance: 22-23% disbursement growth, 17-18% AUM growth. Heavily oriented to P&L front-loading.

No geographical stress. Proactive policy changes on West Asia conflict and rainfall risk sectors (tours, travels, restaurants). Tractor sales rebounding. Collections under control.

Strategic reorientation to 65-35 HL:NHL mix. Resource-level targeted customer acquisition being rolled out. Direct sourcing emphasis. 17% HL volume growth in Q1 vs prior year.

Productivity per resource to double from ₹8-10L to ₹20-22L annually in 2 years. Branch mix varies; focus on per-resource yield.

PLR mechanics transparent: external + internal factors via ALCO. Disbursement yield now near portfolio yield post-cuts; gap narrowed. Spread will fall below 5%; cost reduction + income levers to offset.

Currently under evaluation; will implement changes if required.

Quarterly disbursement rate ~₹600 Cr (June); annual ~₹7.2 Cr base suggests 22-23% achievable. But below 20% medium-term target signals caution.

Already visible; PLR cut 25 bps since March. Management expects further compression mid-year but confident cost offsets will stabilize ROE/ROA.

Cost-to-income already improved 254 bps; more room exists but spread compression is ongoing headwind. Productivity doubling is the key lever—unproven.

Strategy clear: expand footprint while tightening branch-level profitability monitoring. No specific capex numbers disclosed.

Spreads falling below 5% from prior >5% guidance. Competitive pressure acknowledged across geographies. Cost offset claims untested.

Q1 AUM growth 15.4% YoY; FY27 guidance 17-18%. Both below 20% medium-term target. Sequential revenue -0.8% signals momentum loss.

2-year HL volume CAGR only 1%; management targeting 65-35 HL:NHL mix vs. current 35-65. Ambitious reorientation with weak recent track record.

Management proactively tightened underwriting on West Asia conflict and rainfall shortage sectors (tours, travels, restaurants). Early warning signal of portfolio stress risk.

ROE 13.34% in Q1 is mid-teens, below prior high-teens guidance. Management hasn't addressed gap or revised target.