# 1. Financial Performance ## A. Key Figures * **Fees and Commission Income:** **₹341 Cr** (Q2 FY26, +20% YoY) · **₹573 Cr** (H1 FY26, +21% YoY) * **PBT & PAT (Q2 FY26):** **₹344 Cr** (+2x YoY) · **₹270 Cr** (+16% YoY), with **adjusted PAT up 40% YoY** * **PBT & PAT (H1 FY26):** **₹937 Cr** (+4x YoY) · **₹724 Cr** (+80% YoY) * **Balance Sheet:** **₹10,241 Cr** net worth (ex-minority), **₹107** book value per share, **18x** debt-to-EBITDA ## B. Revenue & Growth * **Record Fee Growth:** Fees and commission income at all-time high, showing sustained **strong double-digit growth momentum** for two consecutive quarters. * **ROA Drivers:** Net total income margin at **10% of average assets**, supported by disciplined opex at **6%** and low credit costs of **1%**, though overall ROA remains at **1%**. ## C. Profit Margins * **Robust Earnings Expansion:** PBT and PAT surged on a half-year basis, with adjusted PAT reflecting **strong underlying profitability** after normalizing for prior-year tax credit. * **Cost Discipline:** Operating expenses managed strategically to balance long-term investment against short-term savings, avoiding **"penny wise and pound foolish"** trade-offs. ## D. Balance Sheet * **Structural Strength:** Balance sheet described as proactively strengthened—not repaired—with **sustained resilience** through cycles, including during pandemic stress periods. * **Deleveraging Progress:** Significant improvement in leverage metrics, signaling enhanced financial flexibility and risk profile. ## E. Cash Flow * **Cost Reallocation:** Employee costs declined from reduced lending activity, while **costs shifted to AIF platform** as key talent moved to support real estate AIF fundraising. * **Streamlined Operations:** Closure of **MSME and FIF businesses** led to leaner cost base, aligning resources with core **real estate credit and syndication model**. --- # 2. Loan Book & Asset Quality ## A. Key Figures * **Non-Core Exposure:** **₹2,000 Cr** real estate (from ₹10,000 Cr) * **Private Markets Capital:** **₹13,000–14,000 Cr** (₹6,500 Cr net worth + ₹7,000 Cr debt) * **Delinquency & GNPA:** **1.6%** GNPA · **6%** 30+ delinquency * **Recoveries (ARC):** **₹1,273 Cr** recovered last year · **₹1,589 Cr** borrowing (↓27% YoY) * **Impairment:** **₹14 Cr** half-yearly (annualized ~₹28 Cr) * **Recovery Outlook:** **₹1,000–1,500 Cr** expected over next 6–9 months ## B. Credit Portfolio * **Orderly Runoff:** Smooth rundown of private markets book with **no toxic assets** and recoveries on track, especially from pre-COVID legacy. * **Strategic Discipline:** Loan growth now cautious and quality-focused, with credit standards **tighter than pre-COVID**, prioritizing risk control over scale. * **Portfolio Composition:** Home loan to LAP ratio maintained at **2:1**, anchored by NHB regulatory requirements; **20% of home loans** to "new to credit" customers from Tier 2/3 cities. * **Underwriting Rigor:** Multi-dimensional risk assessment across **customer type, sourcing, LTV, and CIBIL**, with tailored underwriting for cash salaried and affordable segments. ## C. Delinquency Rates * **Controlled Risk Parameters:** Despite **55–60% average LTV** (up to 85% in Tier 1), historical **loss given default at only 12%**, reflecting strong collateral recovery. * **Stable Delinquency:** 30+ delinquency and GNPA both at **6%**, indicating contained asset quality stress despite elevated EMI bounces. ## D. Provision Coverage * **High Cushion:** Troubled real estate loans carry **94% provision coverage**, with **84% of provisioned assets secured** by tangible collateral. * **Minimal Surprise Risk:** Significant provisions already taken, supporting expectation of **clean balance sheet evolution** and strong cash flow conversion. ## E. Recovery Performance * **Robust Recovery Execution:** **₹1,273 Cr** ARC recovery in past year drove 27% debt reduction; **major sticky asset resolved via NCLT** with bank-backed bid. * **Near-Term Recovery Pipeline:** **Q1 momentum** sustained by closed NCLT asset; **₹1,000–1,500 Cr** in additional recoveries expected from real estate and distressed assets. * **Operational Resilience:** Despite **20% EMI bounce rate**, **6-month collection efficiency at 98%**, supported by dedicated **1,700-person collections team**. --- # 3. Segment & Business Performance ## A. Key Figures * **Wealth Management PAT:** ₹73 Cr H1 FY'26 (+16%) * **Asset Management PAT:** ₹355 Cr H1 FY'26 (>5x) * **Private Markets PAT:** ₹77 Cr H1 FY'26 (includes ₹19 Cr write-back) * **Home Loans AUM:** ₹3,031 Cr (+28% YoY) * **Home Loans Revenue:** ₹210 Cr H1 FY'26 (+23%) · ₹109 Cr Q2 FY'26 (+41%) ## B. Wealth Management * **Profit Recovery Underway:** H1 profitability rebounded with **strong double-digit growth** in PAT, despite a weaker Q2 due to lower transactional and pre-IPO income. * **Strategic Expansion:** Headcount and branch network grew **sharply YoY**, reflecting continued investment to drive **faster year-on-year growth** in a core strategic business. * **Digital Drag, Not Distraction:** Cumulative digital investments of **₹200–250 Cr** have weighed on profits, but remain integral to long-term strategy; ex-digital profits not disclosed. * **Demerger Considered, Not Committed:** Potential separation of wealth business under review, contingent on achieving **much larger scale** to justify a standalone listed entity. ## C. Asset Management * **Breakout H1 Performance:** Despite quarterly losses, H1 PAT surged over fivefold, signaling **strong operating leverage** from prior build-up investments. * **AUM Growth in Progress:** Non-liquid AUM rose to **₹12,100 Cr** by Q2, supported by new product launches, though growth remains challenged by competitive positioning. * **Build Phase Continues:** Business remains in investment mode with **team expansion to 250–275** and infrastructure upgrades, targeting **AUM doubling in 2–3 years**. ## D. Private Markets * **Robust Core Profitability:** Segment delivered **strong H1 PAT growth**, with **₹58 Cr from operations** and significant contribution from **ARC asset resolutions** (lumpy across quarters). * **Scaled Growth Trajectory:** Private credit book at **₹4,000 Cr**, targeting **20% annual growth** into FY'27, backed by a **strong syndication pipeline**. * **Integrated Platform Advantage:** Unified management across private credit, real estate, and private equity drives **high ROE and low risk**, unlocking **co-investment synergies** as a **yield improver**. ## E. Home Loans * **Accelerating Momentum:** Affordable home loans delivered **robust revenue and profit growth**, with **41% YoY revenue growth in Q2** and **near-doubling of quarterly PAT**. * **Branch-Led Expansion:** Network expanded to **134 branches**, supporting **28% YoY AUM growth** and sustained market penetration. --- # 4. Capital & Funding Mix ## A. Key Figures * Interim Dividend: ₹1.5 per share declared ## B. Dividend Policy * **Shareholder Returns Maintained:** Interim dividend of ₹5 per share aligns with sustained commitment to increasing distributions. ## C. Capital Allocation * **Strategic Balance Sheet Management:** Ongoing focus on strengthening the balance sheet while actively investing in growth opportunities despite macro uncertainty. * **Flexible Capital Deployment:** Allocation driven by risk-adjusted returns, enabling targeted expansion across real estate, distressed credit, and bespoke lending platforms. --- # 5. Product & Fund Development ## A. Key Figures * **Employee Strength (Asset Management):** **211** (+18% YoY) ## B. AIF Fundraising * **Strategic Expansion:** Asset management headcount growth reflects scaling under the AIF umbrella, with **third-party asset management** positioned as a core growth pillar. * **Real Estate AIF Momentum:** Fund received regulatory approval and is in active fundraising, with **strong investor traction** and a targeted first close by June next year. * **Disciplined Deployment:** Capital allocation will prioritize **compelling risk-adjusted returns** over rapid scale, reinforcing a quality-over-volume mandate. * **Enabling Investments:** Strategic outlays in technology and infrastructure aim to position the firm as **preferred banker for large corporates** and **institution of choice for the buy side**. ## C. Pre-IPO & PE Funds * **Pre-IPO Fund in Pipeline:** Firm has filed for a pre-IPO fund, leveraging its **#1 ECM franchise** and high **"right to win"** advantage, pending regulatory approvals. * **Multi-Fund Rollout Plan:** PE fund to follow pre-IPO launch; **real estate credit fund** already approved, indicating broadening alternative asset footprint. * **ECM Economics:** BRLM commissions range from **2% to 3%**, typically split across 3–4 banks, with individual take of **80 bps to 1%** on average. --- # 6. Client & Channel Trends ## A. Key Figures * **Recurring AUM:** **₹32,000 Cr** Wealth business (+26%) · Share of total AUM at **28%** * **SIP Book:** **₹115 Cr/month** mutual fund segment (+59%) · Peaked at **₹122–123 Cr** before moderating * **Non-Liquid AUM:** **₹12,100 Cr** average (+36%) * **Relationship Managers:** **204** (doubled from 101) ## B. SIP & AUM Trends * **Strong Momentum in Recurring Flows:** Recurring AUM and SIP volumes show robust double-digit growth, underpinned by structural tailwinds in India’s savings shift toward capital markets. * **Recent SIP Softness:** Monthly SIP inflows moderated from peak levels amid market volatility, with **digital clients** driving most of the pullback due to **frisky and volatile behavior**. * **Favorable Macro Backdrop:** High liquidity and bank credit availability continue to support sales momentum, though developer appetite for high-rate loans remains limited. ## C. Channel Strategy & Mix * **Strategic Pivot to IFA Channel:** Company is prioritizing SIP growth via IFAs, which generate **stickier assets** compared to the more volatile DIY digital segment. * **Lagging Impact of RM Expansion:** Despite doubling the **relationship manager** base in the past year, full AUM contribution from new hires is still unfolding. --- # 7. Regulatory & Market Risks ## A. Regulatory & Market Risks * **Uncertain Regulatory Impact:** SEBI’s proposed mutual fund circular remains under consultation, with final implications for AUM and operations pending industry feedback; regulator emphasizes non-disruptive outcomes. * **Broking Revenue Pressure:** Lower Q2 revenues reflect industry-wide declines in trading volumes, exacerbated by regulatory changes that have dampened options trading activity over the past four quarters. * **Strategic Lending Shift:** In response to unpredictable recovery timelines, the company is pivoting from balance sheet lending to funds and cash flow-backed structures to safeguard ROA. --- # 8. Guidance & Outlook ## A. Key Figures * Wealth Management Profits: **₹73 Cr** (first half FY '26) · Scaling expected in FY '27/'28 * **Private Markets ROA Target:** **3%–4%** annually (not 8% implied) * **Digital Segment Breakeven:** Targeted by **FY '27** * **IPO Process Duration:** **~9 months** average (3–4 months regulatory) * **Private Markets Quarterly Earnings Power:** **>₹70 Cr** ## B. ROE Targets * **Capital Efficiency Confirmed:** Core business already profitable with **14% ROE** on capital employed, reflecting strong underlying returns. * **Model Integrity:** Current financial model remains a reliable proxy for full-year performance, pending improvement in credit cost control. ## C. Breakeven Timeline * **Digital Burn Reducing:** Losses from digital investments have meaningfully narrowed, with further reduction expected over the next 6–12 months. * **Credit Cost Trajectory:** Higher first-half credit costs expected to decline in the coming quarter, supporting margin stability. ## D. IPO Plans * **Strong Deal Momentum:** Active in 10–15 IPOs in Q1, including large mandates, with similar activity expected over next 2–3 quarters. * **Pipeline Expansion:** New business pipeline has strengthened versus prior quarter, signaling improved growth visibility.