# 1. Financial Performance ## A. Key Figures * **AUM:** **₹23,450 Cr** Total (+15% YoY) * Disbursements: ₹67.8 Cr Annual (+11% YoY) · ₹400 Cr+ Lifetime * **NIM:** **8.45%** FY26 (+29 bps YoY) · **8.45%** Q4 (+44 bps QoQ) * **Spreads:** **5.20%** FY26 (+31 bps YoY) * **Net Profit:** **₹182 Cr** Q4 (+18% YoY) · **14%** FY26 Growth * **Profitability Ratios:** **3.5%** ROA · **14.67%** ROE * **Net Worth:** **₹5,050 Cr** (+16% YoY) ## B. Revenue & AUM Growth * **Scale Milestones:** The company achieved significant scale in FY26, with the balance sheet surpassing the **₹20,000 Cr** mark and the total customer base reaching **4 lakh**. * **Disbursement Momentum:** Annual lending activity saw double-digit growth, contributing to a lifetime disbursement milestone of over **₹40,000 Cr**. ## C. Margins & Spreads * **Yield Management:** Despite a sequential decline in spreads caused by a **15 bps** PLR cut in March, management maintains a confident outlook on sustaining spreads above **5%**. * **Cost of Funds Optimization:** Profitability was bolstered by a significant **62 bps** improvement in borrowing costs, offsetting seasonal competitive pressures and yield compression. * **Strategic Pricing:** Margin expansion was supported by risk-adjusted pricing and a focus on "yield placement," avoiding low-margin business that falls outside risk boundaries. * **Forward Guidance:** A further **10 bps** PLR cut is planned for June, with the company prioritizing asset quality and credit assessments over aggressive volume chasing. ## D. Cost Structure * **Opex Headwinds:** The opex-to-AUM ratio trended higher, driven by aggressive physical footprint expansion and increased manpower requirements. * **Retention & Incentives:** Operating costs were impacted by the implementation of long-term **ESOP and PSOP schemes** introduced by CVC to retain key talent. * **Denominator Effect:** Slower-than-anticipated growth resulted in negative operating leverage, as the infrastructure and personnel investments outpaced AUM expansion. --- # 2. Loan Book & Asset Quality ## A. Key Figures * **Disbursements:** **₹2,350 Cr** Q4 (+16% YoY / +36% QoQ) * **Credit Costs:** **13 bps** * **Provisions:** **₹130 Cr** Total ECL ## B. Disbursement & Volume Trends * **Improving Operating Rhythm:** Robust quarterly disbursement growth signals a recovery in momentum despite a flat full-year loan count. [3, 10] * **Volume Divergence:** Overall activity was offset by a **year-over-year decline in home loan volumes**, even with cumulative activity gains in the latter three quarters. ## C. Credit Quality & Provisioning * **Strengthening Asset Metrics:** Significant year-over-year improvement in delinquency buckets (1+ DPD) and Stage 3 assets, with credit costs trending well below the long-term guidance of **25 bps**. [4, 5] * **Geographic Resilience:** Credit performance remains healthy across the board; vintage states and emerging markets both maintain GNPA levels below **1.25%** and **1%** of AUM, respectively. * **Macroeconomic Monitoring:** Management reports no negative impact from global inflationary pressures; April bounce rates showed year-over-year improvement. ## D. Repayment & Prepayment Dynamics * **Elevated Repayment Velocity:** The spike in the overall repayment rate is driven by organic customer behavior—including prepayments and extra EMIs—rather than competitive poaching. [11, 12] * **Controlled Balance Transfers:** The BT out rate remains disciplined and below the internal **6% threshold**, indicating strong customer retention despite higher overall churn. --- # 3. Deposit & Funding Mix ## A. Key Figures * **Total Borrowings:** **₹20,400 Cr** Outstanding as of March 31, 2026 * **Incremental Funding:** **₹6,705 Cr** Raised in FY26 at **7.61%** * **Cost of Borrowing:** **62 bps** Full-year decrease * **Spread:** **5.2%** Stabilized * **Capital Adequacy (CRAR):** **44.6%** ## B. Liability Franchise & Strategic Funding * **Institutional Backing:** Secured a significant **₹975 Cr ($108M)** commitment from a multinational institution at competitive rates to bolster the FY26 funding pipeline. * **Record Capital Markets Activity:** Executed the largest NCD placement in corporate history, specifically targeting ESG-linked growth in green housing, women ownership, and MSME lending. * **Diversified Instruments:** Successfully debuted **₹50 Cr** of AAA-rated PTCs, further broadening the funding base beyond traditional bank lines. ## C. Borrowing Costs & Structural Mix * **Benchmark Optimization:** Shifted a substantial portion of the liability mix toward EBLR and market benchmarks to enable faster repricing and contain interest expenses. * **Floating Rate Exposure:** Borrowings are well-diversified with **73%** linked to floating rates, split between external benchmarks and 3-month MCLR. * **Yield Management:** Achieved a notable reduction in borrowing costs and stabilized spreads through proactive liability management. ## D. Liquidity & ALM Position * **Prudent Asset-Liability Management:** Maintained a positive ALM profile with borrowing tenures strategically exceeding asset tenures to mitigate maturity risks. * **Robust Liquidity Buffer:** Retains a strong liquidity position comprising **₹1,900 Cr** in cash/unavailed credit and **₹975 Cr** in documented sanctions. --- # 4. Branch & Distribution ## A. Key Figures * **Branch Network:** **435** Total branches (+31 in Q4) · **15** States covered * **Regional Expansion:** **8 to 10** Branches added per primary growth state · **~3** Branches added in secondary markets * **Productivity Target:** **15% to 20%** Targeted efficiency increase ## B. Network Expansion & Geographic Mix * **Strategic Pivot:** Physical footprint expansion is heavily weighted toward high-potential markets in **Tamil Nadu, Uttar Pradesh, and Gujarat**, while growth remains flat in legacy regions like Maharashtra and Rajasthan. * **Credit Profile Strengthening:** Geographic diversification into southern markets coincided with a credit rating outlook upgrade to **Positive** by both **ICRA and CARE**. * **Market Deepening:** Management is pursuing a "core-plus-expansion" strategy, maintaining strengths in primary markets like Rajasthan while aggressively scaling in untapped geographies to ensure sustainable growth. ## C. Sourcing & Productivity Metrics * **Efficiency Mandate:** To achieve double-digit productivity gains, the company is optimizing the full credit funnel—from **login to disbursement**—rather than focusing solely on final output. * **Operational Headwinds:** Management identified a disconnect where volumes declined despite a larger workforce and branch count, marking this as a critical priority for **FY27** corrective action. * **Sourcing Strategy:** The company maintains a hybrid approach, prioritizing direct channels for control while preserving the existing **indirect sourcing ecosystem** as a vital business component. * **Execution Focus:** Future performance will be benchmarked against **productivity per person** and **revenue per person** through enhanced technology and sharper execution. --- # 5. Strategy & Technology ## A. Key Figures * **Yield Impact:** **20 bps** drop in yields following a **15 bps** PLR cut * **Network Scale:** **435** branches targeted for yield optimization rollout * **Market Experience:** **10-12 years** of local expertise leveraged for direct sourcing ## B. Direct Sourcing Focus * **Internal Channel Rebuilding:** Strategic pivot toward "direct business muscle" to reduce external dependency, utilizing the branch network, CSCs, and digital referral programs. * **Ecosystem Balance:** Prioritizing a branch-driven model as a core historical strength while maintaining channel partners as an essential secondary layer. ## C. Digital Infrastructure * **Capex Cycle Completion:** Major digital capitalization is finished following investments in **Salesforce, Oracle FLEXCUBE, and Oracle ERP Fusion**; no significant core module spending is anticipated. * **Efficiency-Led Tech Spend:** Future investments are limited to non-material collection software and incremental **AI/GenAI** costs aimed at reducing per-unit costs and improving manpower efficiency. ## D. Pricing & Growth Strategy * **Yield Optimization:** Bridging the gap between book and disbursement yields through risk-adjusted pricing and "better placement" on individual cases within the assessed income group. * **Risk-Agnostic Returns:** Management asserts that higher yields will be achieved through conscious underwriting and market presence rather than shifting into riskier customer segments. * **Volume-Driven Growth:** Strategy remains focused on increasing the **number of new customers**; Average Ticket Size (ATS) increases will only reflect **inflation** rather than a strategic shift. * **Geographic Prioritization:** Growth execution is concentrated on maximizing potential in high-growth corridors including **Maharashtra, Gujarat, UP, and Southern states**. --- # 6. Regulatory & Credit Risks ## A. Key Figures * **Repo Rate Impact:** **125 bps** cumulative RBI cut * **Balance Transfer (BT) Out:** **<6%** target threshold ## B. Macroeconomic Sensitivity * **Affordability Tailwinds:** Significant monetary easing has bolstered the affordable housing ecosystem, particularly within **Tier 2 and Tier 3 markets**. * **Inflation Monitoring:** Management is tracking potential headwinds from rising fuel costs, though no material impact on portfolio quality has surfaced to date. ## C. Risk Mitigation & Concentration * **Structural Diversification:** The retail-centric model utilizes a highly granular loan book to insulate the balance sheet from sector-specific volatility and concentration risk. * **Retention Strategy:** Monthly monitoring of peer-group transfers ensures attrition remains within the strict single-digit guidance. ## D. Sectoral Vulnerabilities * **High-Watch Segments:** Active surveillance of **5-6 specific profiles** (including hospitality, travel, and energy) is underway via rigorous tracking of **bouncing rates and 1+ DPD** metrics. * **Credit Exclusion Policy:** The company maintains a defensive posture by avoiding direct financing of energy-intensive profiles, such as chemical factories, to limit exposure to input cost spikes. --- # 7. Guidance & Outlook ## A. Key Figures * **AUM Growth Target:** **20%** Long-term annual objective * **Return on Equity (ROE):** **High teens** Long-term target * **Credit Costs:** **<25 bps** Reaffirmed guidance ## B. Profitability & Efficiency Targets * **Operational Leverage:** Management anticipates a gradual reduction in opex ratios as recent branch investments mature and the balance sheet scales. * **Asset Quality Focus:** Profitability targets are anchored by a commitment to maintain industry-leading credit costs and minimizing funnel leakages from login to disbursement. ## C. Strategic Priorities & Execution * **Leadership Transition:** **Manu Singh** (ex-HDFC Bank/industry veteran) appointed as CEO, bringing **25 years** of experience to lead risk management and governance-led scaling. * **Growth Re-acceleration:** To address recent underperformance relative to peers, the company is optimizing **product placement, geography, and channel management** to restore robust AUM momentum. * **Capital Allocation:** Future operational spend will prioritize **physical branch and network expansion** over major new technology platforms. * **Sustainable Returns:** Strategy emphasizes disciplined, credit-led growth to deliver sustainable risk-adjusted returns while maintaining a customer-first philosophy.