Strong delivery, margin guidance raised, credit growth momentum intact

Advances ₹72,442 cr vs ₹57,561 cr YoY = 25.8% growth

Delivered revenue ₹2,092.3 Cr; interest income stated ₹2,092 cr YoY

Delivered PAT ₹415.9 cr vs ₹329 cr YoY = 26.4% growth

NIM 3.87% vs 3.78% Q1 — supports delivered margin of 31.6% OPM and 17% NPM

Operating expense control evident; beats own prior guidance of 47–48%

Within raised guidance range of 1.6%+ plus

Prior Q1 guidance 3.65–3.70% (margin pressure from deposit costs). Q2 delivered 3.87%; new guidance 3.85–3.95%. 20 bps+ improvement.

Prior 1.55–1.65% FY27 guidance. New: above 1.6% plus range. Q2 delivered 1.62%. Lower bound lifted by ~50 bps.

Prior 47–48% FY27 guided. H1 FY27 delivered 45.71%. New guidance 45–47% for full year. ~100 bps beat.

MD explicitly cautious: '20% in next two years, I would be doubtful.' Current 21% YoY likely plateaus in FY28.

Complete credit assessment: bureau pull, past behavior, CIBIL, end-use assessment. Rural branches distribute and relationship-manage. Center credit ops at Kumbakonam review deviations.

Mostly 5+ year-old accounts (₹645 cr), fully written off. Mix: ₹303 cr collateralized, ₹500 cr zero collateral. Sale price ₹131 cr reflects time-value recovery; fair deal.

20% next two years would be doubtful. Last quarters consistent; 75% granular (deposits <₹3 cr = 48%). New 1,000+ branches now delivering. May grow 21%, 22% but scale slowing.

Not metro product; 250–260 rural/semi-urban branches, ₹40–50 cr book size. 50% agri, 100% have savings accounts. Hard to cross-sell MSME (main product). Gold customers never are MSME simultaneously.

Fixed gold loans capped at 31–32% of ₹21,777 cr; blended yield 10.8%, headroom 5–10 bps. Won't raise Q2. Deposit cost up 10 bps next quarter expected.

21–23% blended FY27, ~22–23% forward. Depends on write-offs (Q1–Q2 had ₹137 cr technical recoveries affecting rate).

₹30 cr adjusted to capital. ₹270 cr incremental; net unprovisioned. Will consume 0.4–0.45% of capital over time. No P&L impact.

Maximum 1–2% growth; won't go beyond 31–32%. Risk assessment, not size-chasing. If criteria match, will grow; else hold.

Advances ₹72,442 cr (+26% YoY, +7% Q2 alone). Multi-quarter delivery track record. MSME, gold, secured retail all growing.

Q2 delivered 3.87%. 55% EBLR pass-through to loans offset 10 bps deposit cost hike expected. Fixed gold (30% of book) headroom 5–10 bps.

H1 FY27 at 45.71%. Wage hike (July) is variable, not recurring. Branch ramp-up offsetting.

800 → 1,000+ branches live. New branches delivering 'quite consistently.' Growth capex ongoing; no specific guidance on spend.

System liquidity tight (FCNR inflows helping). Deposit costs 5.56% Q2, rising. 10 bps hike expected Q3. NIM guided 3.85–3.95%; only 5–10 bps headroom on gold loans.

RBI harmonized LTV directions April 1, 2026. Stricter 75% LTV (vs prior uniform) triggers SMA-2 if breached. 250–260 rural branches predominantly, high concentration. Portfolio SMA-2 (0.67%) may spike.

MD cautious: '20% in next two years I would be doubtful.' Liquidity support from FCNR (limited term), rate competition, granular deposit base (75% <₹3 cr). Slowing growth will constrain credit-side expansion.

Gold loans now 30% of ₹72,442 cr (~₹21.8k cr). Fixed-rate segment (30% of gold book) capped at 31–32% to avoid rate-reset risk. Rural/semi-urban concentration (96% South) limits diversification. Yield (10.8%) high but headroom limited.

Operating expenses up 24% YoY (₹455 cr → ₹562 cr Q2); wage hike in July Q2 explains ₹32 cr impact. Establishment expenses +25%. Cost-to-income target 45–47% FY27 assuming leveling, but inflationary environment may test.