# 1. Financial Performance ## A. Key Figures * **Disbursements:** **₹398 Cr** H1 FY26 (+15% YoY) * **Net Interest Income:** **₹38 Cr** Q2 FY26 (+9% YoY) · **₹68 Cr** H1 FY26 (+21% YoY) * **Profit After-Tax:** **₹11 Cr** Q2 FY26 · **₹21 Cr** H1 FY26 (+26% YoY) * **AUM:** **₹1,400 Cr** → **₹1,500 Cr** (+6% QoQ) * Capital Adequacy Ratio: 26.54% ## B. Revenue & Disbursements * **Record Disbursement Momentum:** Strong H1 growth driven by two-wheeler demand, dealer network expansion, and geographic reach, culminating in a record **₹40 Cr monthly disbursement in October**. * **Lag in Profit Realization:** Despite robust disbursements, profitability lags due to timing concentration in Q3, limiting near-term earnings conversion. ## C. Net Interest Income * **Margin Resilience:** Net interest margin held strong at **56%**, with NII growth outpacing AUM expansion due to higher processing fees and short loan tenures in the two-wheeler segment. * **Funding Efficiency:** YoY and sequential NII growth achieved despite modest balance sheet growth, reflecting improved cost of borrowings and deployment efficiency. ## D. Profit After-Tax * **Profitability Pressure Easing:** Negative interest carry on **₹400 Cr liquidity** weighed on H1 profits but has now been deployed, setting up for improved earnings in second-half quarters. ## E. Balance Sheet Strength * **Robust Capital Buffer:** Capital adequacy ratio of 54% provides significant headroom for growth, well above the **RBI’s regulatory minimum**. --- # 2. Loan Book & Asset Quality ## A. Key Figures * **AUM:** **₹1,500 Cr** (as of Sep-25) (+36% YoY) * **Stage 1 Assets:** **₹1,393 Cr** (80% of portfolio) * Stage 3 Assets: ₹53 Cr (3.52% of gross) · Net Stage 3: 2.68% (up from 2.64%) * NPA Ratio: 3.5% · Final Credit Loss: <1% ## B. AUM Growth & Mix * **Robust Expansion:** AUM growth at strong double-digit pace, supported by scalable operations and deep rural penetration. * **Rural-Centric Footprint:** Portfolio remains predominantly rural, with **65% of AUM** concentrated in rural markets. ## C. NPA & Provisioning * **Operational Edge:** Industry-leading sanction speed—over 60% of loans approved in under one minute—enhances customer acquisition and portfolio quality. * **Proactive Risk Management:** Dedicated recovery team activates after 180 days of NPA; write-offs initiated when recovery prospects are remote. * **Balance Sheet Resilience:** Adequate provisioning maintains healthy coverage and supports capital strength. ## D. Stage 1/2/3 Assets * **High-Quality Portfolio:** Majority of assets classified as Stage 1, reflecting strong underwriting and early-stage asset health. * **Contained Delinquency Pressure:** Slight uptick in Stage 3 and net Stage 3 ratios, but credit loss remains minimal, indicating effective collections. ## E. Recovery Performance * **Exceptional Loss Mitigation:** Despite a 5% NPA ratio, final credit loss held below **1%**, underscoring best-in-class recovery execution. --- # 3. Funding & Cost of Borrowing ## A. Key Figures * Cost of Borrowing: **10.67%** (improved vs. prior) · **~100 bps reduction** since March * **Borrowings:** **₹1,467 Cr** (up from ₹1,098 Cr) * **Liquidity & Post-Sept Disbursements:** **₹400 Cr** liquidity maintained · **₹290 Cr** sanctioned and disbursed post-September ## B. Cost of Borrowings * **Favorable Funding Trend:** Significant reduction in borrowing costs driven by RBI rate cut pass-through, improved credit outlook, and stronger lender relationships. * **Forward-Looking Guidance:** Expect **further 25–50 bps decline** in borrowing costs next quarter as favorable conditions persist. * **Festival-Led Leverage:** Increase in borrowings primarily funded anticipated festival season demand while maintaining robust liquidity buffer. ## C. Lender Relationships * **Co-Lending Pipeline:** Partnerships under evaluation with **2–3 lenders**, though **Moto Capital not confirmed** as a partner. * **No Current Assignments:** No direct loan assignments executed with banks this year, and **no active discussions** underway despite potential for future placements. --- # 4. Product & Segment Performance ## A. Key Figures * **Two-Wheeler Financing Mix:** **~82%** of total book * **Used Two-Wheeler Portfolio:** **1%** of total portfolio · **₹20 Cr** disbursed * **Small Business Loan Portfolio:** Grew to **~₹70 Cr** (from ₹48 Cr in Q1) · **₹70–75 Cr** total unsecured disbursements ## B. Two-Wheeler Financing * **Strong Sales Momentum:** October volumes surged **50%** on improved supply and demand tailwinds from rate cuts enhancing affordability. * **Product Upskilling Trend:** Consumers are upgrading engine capacity (e.g., 110cc → 125cc → 150cc) due to **INR18,000–20,000 savings** on larger models, boosting value perception. * **Technology-Led Efficiency:** Industry-first **instant disbursement via JustPay**, straight-through processing, and DigiLocker integration streamline customer experience. * **Strategic Focus in UP:** Exclusive focus on two-wheeler financing in Uttar Pradesh with intent to stabilize presence over next six months. ## C. Used Vehicle Loans * **Emerging Used Two-Wheeler Segment:** Portfolio showing traction post-rate cuts, with **dedicated vertical established** and performance on par with new two-wheeler loans despite higher yield. * **Used Car Challenges & Pivot:** Traction below expectations due to limited reach and suboptimal customer profile; new **co-lending model** introduced to target **5–16% IRR** and improve quality. ## D. Small Business Loans * **Rapid Expansion in Unsecured Lending:** Portfolio scaled to near **₹70 Cr** across expanding geographies (Pune, Nashik, Ahmedabad), with all disbursements unsecured to date. * **Favorable Early Performance:** DNP of **75** considered best-in-class, though early in the 30-month cycle; portfolio dominated by working capital loans with **₹5 L average ticket**. ## E. MSME LAP Pipeline * **New Secured Product Launch Imminent:** MSME LAP (secured) set to launch by **January**, enabling mixed collateral structure; **MSME Lab** to broaden product suite. --- # 5. Geography & Distribution ## A. Key Figures * **Dealer Network:** **1,250+** dealers · **1,726** employees (**700+** sales team) * **Funding Partners:** **3** public sector banks · **10** private sector banks · **25** NBFCs * **BC Partnerships:** **3** new added in the quarter · **6-month-old** program showing strong traction ## B. State-Wise Expansion * **Focus on Penetration Over Reach:** No new state entries this year; strategic emphasis on deepening footprint in **Uttar Pradesh, Madhya Pradesh, and Chhattisgarh**. * **Uttar Pradesh Momentum:** Robust disbursement trends and low NPA performance driving rapid expansion, with **12 new locations launched** and **10–15 more planned** across key urban and semi-urban clusters. * **Urban Credit Quality Improvement:** Major cities including Mumbai, Pune, and Jaipur show declining risk ratios, now in the **26%–27% range**, indicating stronger asset quality in established markets. ## C. Dealer Network * **Scalable Distribution Infrastructure:** Extensive dealer and banking partner network supports nationwide reach and funding scalability. ## D. BC Partner Program * **Strategic Channel for Efficient Growth:** New partnerships with experienced regional players in underserved markets (e.g., Karnataka) enable low-cost AUM expansion and improved profitability. * **Sustainable Partnership Model:** Management intends to **gradually scale collaborations** where internal teams are thin, prioritizing market capture without incremental opex or credit risk. * **Early Success Validated:** BC program demonstrates strong adherence to credit standards and **excellent collection performance** within six months of launch. --- # 6. Credit & Operational Risks ## A. Key Figures * **Co-Lending Exposure:** **₹125 Cr** last year · **₹75 Cr** currently ## B. Delinquency Trends * **Risk Mitigation Without Formal Framework:** Company informally monitors loan end-use to ensure funds are directed toward working capital or expansion, not debt repayment, despite absence of a formal system. ## C. Co-Lending Delays * **Disbursement Headwinds Resolved:** Q2 disbursement growth slowed due to delay in GST rate card announcement, but clarity has now been achieved, removing the impediment. * **Reduced Co-Lending Activity:** No new co-lending or direct assignments this year; existing exposure with Muthoot Capital meaningfully wound down. --- # 7. Guidance & Outlook ## A. Key Figures * **AUM Guidance:** **₹1,700–1,750 Cr** (FY-end) · **₹85–90 Cr** unsecured book (capped at 7% of AUM) * **Profit CAGR Target:** **30%–35%** (FY27–FY28 outlook) ## B. Profitability Outlook * **Sustained Profit Trajectory:** Company reaffirms **30–35% CAGR** profit growth path, underpinned by disciplined expansion and digital efficiency gains. * **Margin Tailwinds:** Declining borrowing costs expected to boost future profitability and financial resilience. ## C. Disbursement Forecast * **Strong Sales Momentum:** Two-wheeler disbursements showing robust growth, with elevated demand extending from October 2025 into coming quarters. * **Rate-Led Demand Pull-Forward:** Recent rate cuts accelerating buyer sentiment, driving forward purchases planned for next 1–2 years.