Strong growth masked by capital strain and gold tail risk

PAT ₹713Cr (160% YoY, 40% QoQ) driven by gold and home finance momentum; NPM 18.2%, ROE 19.5%

Consolidated AUM ₹1.15L Cr (38% YoY), gold loans ₹58,406 Cr; but QoQ growth only 11% (not 21%)

Delivered strong home finance momentum; Girish confirmed 39% disbursement growth, 4% AUM QoQ

Q1 credit cost 1.6% within guidance band; but improvement dependent on housing LAP cleanup

Management explicitly said slower-than-planned in Q1; assignment income down ₹173Cr→₹43Cr YoY signals shift to co-lending model

Girish committed 17-18% AUM/book growth, 30%+ disbursement growth FY27; no prior target. Yield improvement 68-70 bps on incremental book vs last 2Q.

FY27 credit cost 1.5-1.7% reaffirmed; Q1 actual 1.6%. Downside contingent on housing LAP cleanup over 2 years (no change from prior messaging).

Nirmal confirmed unsecured personal and business loans halted. Microfinance Samasta itself survived; LAP/secured MSME continue.

QIP, stake sale (subsidiaries), perpetual debt, co-lending easing, listing microfinance all on table post-AGM. Nirmal avoided equity raise until 'reasonable valuations' available.

Nirmal outlined multiple options (QIP, stake sale, perpetual debt, co-lending, listing microfinance). Prefer not desperate raise; working all levers this quarter. Post-AGM approval valid full year.

Girish: 39% QoQ disbursement growth both put together; home 80%, LAP 18-19%. FY27 full-year outlook 17-18% book growth, 30%+ disbursement; Q1 soft, Q2+ expected to improve.

Housing finance micro LAP (₹440Cr) and BLC book (₹260Cr) higher GNPA than peers; cleanup over 2 years will drive cost decline. Gold losses near-zero historically.

AI is new animal; wide range reflects uncertainty. OpEx/AUM at 3.4%, marginal decline to 3.3-3.4% expected; AI trajectory black box over 2-3 years.

Gold: customers cautious, hold jewelry (emotional value), give time. Housing: mending structurally; will decline significantly. Pivoting to secured portfolio.

Housing LGD 33-34%. ROA improvement: 40-50bps from credit cost decline, 20-30bps from NIM + opex; margins stable, benefits from cost and credit.

Nirmal: Competition on yield and LTV both ways. Huge market (PSU banks ₹3L+ Cr), many unorganized. We have franchise, branches, not chasing cutthroat; learning curve for new players.

Unsecured lending discontinued, so role redefined. Previous CFO in strategy but health issues. Tier-1 and Tier-2 mostly 15-30 years tenure (gold head 25-30 years); old people are strength.

Girish: Portfolio reallocation underway. Mid-teens ROE target next 3 years; cutting prime (low margin), pivoting affordable+emerging. Year's disbursement = 18-20% book, so 50-60% portfolio color change in 2-3Y.

INR475Cr demand filed appeal with CIT. Standard process (CIT → Tribunal → HC → SC). No new development.

Moody's 1 notch above Fitch/S&P (Ba3). Fitch actively engaged, post-results to committee; 'very optimistic' for upgrade. Will engage other agencies.

Q1 credit cost ~1.6% based on avg loan book; FY27 guidance 1.5-1.7%. Raised $500M dollar bond (higher cost) for diversification; expect cost down post-FCNR liquidity easing.

Correction: 11% QoQ (not 21%). Tonnage 5-6%, prices corrected Feb not this Q. LTV healthy cushion; maintaining discipline.

Gold seasonal (no penalty, customers hold off until day 90). MSME unsecured discontinued (portfolio shrinking). Very marginal movements; not concerning.

Venkatesh: Microfinance 3-4% QoQ growth steady (not 30-40% like 2024). ROA target 2.5-3% closer to 3% by year-end. Diversifying into retail, secured loans.

Income assessment now mandatory. Consumption loan max 75% LTV; income-generating >75% with cash flow assessment. We launched income-generating product, tech-driven for small businesses. Tenure unchanged (2Y available).

Gold 30+ at 3.8%, marginal increase. Seasonal; historically in this range. Not manageable; customers hold back based on LTV cushion, not actual default risk.

Upfront income based on transactions done in quarter. Q1 transactions fewer vs prior quarter due to co-lending pickup. Will analyze and get back. Going forward income negligible as co-lending scales.

Always had monthly/quarterly/6M/bullet options with different rates (monthly lower for good customers). Income-gen only started Q1; too early to assess traction but no significant variance yet.

All banks different policies/thresholds. We do CIBIL pull, digital data, customer talk to estimate income. Banks work with us in joint lending; most happy with our process. Work each bank separately on their standards.

38% AUM growth YoY suggests revenue momentum but no explicit ₹/% target given

OpEx/AUM at 3.4%, marginal decline to 3.3-3.4% range; AI benefits over 2-3 years to contain further

Assumes credit cost progression 1.5-1.7% FY27, then steep decline next 2Y as housing LAP stabilizes

Branch expansion will partially offset opex leverage benefits; fixed cost model with scale upside

Gold loans 51% of AUM. Sharp price correction unhedged tail risk. Management consciously maintaining LTV discipline but sudden 15-20% gold fall could trigger loss spike.

Parent CET1 at 12.24%, close to 15% regulatory minimum. Growth at 38% will pressure capital further. Equity raise timing/valuation uncertain; multiple options (QIP, stake sale, perpetual debt) all have execution risks.

Larger NBFCs (Shriram, others) entering gold loans last 1-2 quarters. Competition on both yield and LTV. New players have learning curve but market is huge (PSU banks alone ₹3L+ Cr); unorganized sector still large.

Housing GNPA 'much higher than peers' (per Nirmal). Micro LAP book ₹440Cr and BLC book ₹260Cr acknowledged as 'problem' portfolios. Cleanup over 2 years will drag credit costs 1.5-1.7% in FY27.

CFO change in progress; previous CFO in strategy but health issues cited. Unsecured lending business head redefined role as unsecured business discontinued. Risk of execution gaps if transitions not managed well.