Strong turnaround: asset quality normalizing, but sequential softness lingers

Gross NPA 5.4% from 7.5% YoY; net NPA 0.8% from 3.8%; slippages INR 75 Cr from INR 468 Cr

Secured portfolio INR 14,465 Cr (62% of advances), 35% YoY growth; MARG INR 12,909 Cr (56% of portfolio), 42% YoY

Quarterly NIM 7.9% vs prior guidance 7%; CFO says may moderate but kept above 7.5%

Q1 annualized credit cost 4.4%; management cites low net NPA (INR 184 Cr) and low slippages (INR 40 Cr net)

EH loans 185% YoY, 14% QoQ; 32% of gross advances; but early-stage segment from small base

PAT INR 80 Cr vs INR 24 Cr prior quarter (QoQ +233%); but revenue QoQ -8.2%, gold disbursements lower

Advances 27% YoY vs prior 20–25% target; secured portion 35% YoY growth; portfolio mix improving as guided

7.9% current (vs prior 7% target); management expects to hold above 7.5% despite deposit pressure

Now targeting 2% by FY27 exit; prior guidance was 2% by FY28 end—brought forward one full year

Disbursements lower Q-on-Q due to gold price correction; management notes lower repledging intensity vs prior year

185% YoY growth, 14% QoQ, now 32% of gross advances; maximum ticket INR 10 lakh, targeting financial inclusion graduation

Net NPA only INR 184 Cr, slippages INR 74 Cr gross (INR 40 Cr net); no drastic NPA increase expected; confidence cost will decline next quarter.

Too early to give precise number; liability side shaping, RBI policy uncertain; FY28 will be higher than revised FY27 estimate.

Rates will be lower going forward; expect INR 20–25 Cr this quarter; will continue but at lower magnitude.

CRAR 24% comfortable; exploring as market conditions improve; no specific P/B discussions started; will respect existing investor sentiments.

2% to 2.5% reasonable given growth rate, IT/tech investment, spread; all factors considered.

26-state branch network built last 2 years; couldn't leverage due to asset quality issues; now will expand deposit franchise across geographies.

FY27: 50 branches planned, 17 already opened; phased rollout in newer geographies; mostly semi-urban and rural (25% regulatory requirement).

Continuing at 40–45% range; book-level LTV 72%, not at upper limit; prudent buffer maintained.

Historically low delinquencies on MFI portfolio; conscious decision not to cover; will reconsider going forward post-past challenges.

Gold prices no longer rising unidirectionally; lower repledging intensity; people closing and rebooking less; reflects price correction normalization, not demand drop.

Guidance: 22–25% asset growth; with current disbursements, confident in achieving this.

Q1 delivered 27% YoY advance growth; management reaffirmed guidance; current pace supports target.

Prior target 7%; call beat at 7.9%; management cites lower cost of funds, lower slippages as supports.

Technology transformation program; expected to improve scalability, automation, operational efficiency over coming decade.

71% of deposits from Kerala; rapid outflow risk if regional shocks; diversification to 26-state network in progress but still early-stage.

Gold loans 42% of portfolio; Q1 disbursements lower QoQ due to gold price correction; lower repledging intensity signals potential cycle weakness.

Emerging households now 32% of advances with 185% YoY growth from small base; calibrated strategy for migration from microfinance; execution risk on portfolio quality.

ESAF 2.0 StratoNeXt platform full implementation by end of calendar 2026; adoption and integration risk across branches.

Credit cost 4.4% annualized; management targeting 2% by year-end; dependent on slippage moderation and low net NPA stock.