Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
4 Chirag (Head of Strategy & Investor Relations), Krishnan Vishwanathan (CFO & ED), Neha Shivran (Chief Data Analytics Officer), Ranvir Singh (Chairman & CEO)
Analysts
6 Abhishek Murarka (HSBC), Aditya Mundra (Mytemple Capital), Devansh Dhruv (Equentis Wealth Advisory), Manish Ostwal (Nirmal Bang Securities), Nidhesh Jain (Investec India), Tushar (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| AUM | ₹8,001 crore | Up 61% YoY, 13% QoQ; driven by sharper risk models and high-quality customer acquisition |
| Disbursements | ₹3,812 crore | Up 37% YoY; slower than AUM growth as repeat customers move to longer tenures |
| Registered Users | 74.6 million | Up 33% YoY |
| Customers Served | 12.25 million | Up 26% YoY |
| Total Income | ₹677 crore | Up 45% YoY; fell 249 bps QoQ as % of avg AUM — deliberate shift to lower-priced high-quality customers and higher off-book share (49.7%→53.6%) |
| PPOP | ₹256 crore | Up 42% YoY |
| PAT | ₹95 crore | Up 59% YoY, 16% QoQ |
| ROA | 5.05% | Steady; reflects growth quality and risk discipline |
| ROE | 21.20% | Delivered despite ₹850+ crore IPO capital raised in May 2026 |
| Credit Cost | 6.80% of avg AUM | Down from 7.02% QoQ and 8.85% YoY; tracking to 15% FY27 reduction guidance |
| Gross NPA | 2.25% | Range-bound |
| Net NPA | 0.36% | Range-bound |
| Stage 2 | 3.15% | Improved from 3.9% YoY; sequential increase is seasonal (Q1 phenomena) |
| Collection Efficiency | 96.82% | Range-bound; Q1 seasonally lower |
| Stage 3 ECL Coverage | 84.1% | Among highest in industry |
| Stage 2 ECL Coverage | 80.4% | Among highest in industry |
| CAR (NBFC subsidiary) | 40.2% | Up from 25.3% QoQ post-IPO |
| Net Worth | ₹2,245 crore | Nearly 4x March 2023 level; built on retained earnings and IPO proceeds |
| On-book AUM | ₹3,716 crore | 46% of total; off-book ₹4,284 crore at 54% (up from 49.7%) |
| Opex / AUM | ~18% | Down from 19.9% QoQ; 54-55% fixed cost |
Geographic & Segment Commentary
- Personal Loans (Core Product): Interest yield 29-30%, rising to ~36-37% with ancillary fees (processing, bounce charges, insurance). Repeat customers are decisively high quality and moving to longer tenures; vintages sourced since December 2025 show materially better bounce rates, collection efficiency and early delinquencies, driving the credit cost improvement.
- Loan Against Property (LAP): AUM ₹617 crore across 101 branches in 8 states (7.7% of total book). Built as a technology-enabled product — model-based underwriting, branch-led fulfillment, smart document processing, and AI-validated property valuation. Over 40% of LAP customers come from the existing personal loan base; branch payback 7-8 months vs 16-18 months industry; breakeven expected by Q3 FY27 with 20%+ ROE target.
- Geographic Strategy (PIN Code): 17,000 PIN codes served; 11,000 contribute 98% of business. 450 PIN codes paused in Q4 FY26 on early-warning flags; 180 reopened in Q1 as signals turned modestly positive, 270 remain paused. July trends improved further, supporting cautious optimism.
Company-Specific & Strategic Commentary
- AI/Technology Underwriting: Over 7,200 signals read per borrower (bureau, banking flows, device intelligence, alternative data); models progressed from decision trees to gradient boosting to transformer-based systems. AUC at 74% (up from 66% in 2023), separating good vs bad customers 2.5x better than bureau score alone. Multi-agent fraud system runs 50+ checks including deepfakes, false documents, and network fraud.
- Collections Architecture: 7,000+ field agents and 1,000+ telecallers with 95%+ of collections in-house. AI voice agents recover at 80%+ of human efficiency (up from 70%); feature store monitors 7,200 signals for drift; AI-assisted support covers 100% of calls with response time under 90 seconds; 80%+ of code now written with AI.
- Product Expansion: Mutual fund distribution capability launched with AMFI registration secured, targeting the large base of customers who invest in SIPs/MFs; adds fee income alongside existing insurance distribution. LAP being scaled as the second lending product.
- Underwriting Tightening: Approval bands cut from 4 to 3.7 in specific segments; added EPFO credit checks and account aggregator verification to flag salary profiles potentially disrupted by AI-driven employment changes; caution applied to self-employed segments with declining banking credits.
- Capital Position: IPO completed in May 2026 raised ₹850+ crore; NBFC CAR jumped to 40.2% from 25.3% QoQ; funding supported by 45+ lending partners with balanced 46:54 on/off-book split.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| AUM Growth | 40%+ for next 12 months (FY27) | Reaffirmed firmly; 13% QoQ growth in Q1 implies over-delivery on the 40% number |
| Credit Cost | 15% reduction for FY27 | Tracking well (6.80% Q1 vs 8.85% Q1FY26); driven by high-quality customer mix and better recent vintages |
| ROA | 5%+ sustained | Steady at 5.05%; benefits of operating leverage, cheaper cost of funds, and lower risk are passed to customers only after realizing in the book (with a lag) |
| ROE | 20%+ for next few quarters | Delivered at 21.20% despite IPO capital influx; LAP also targeting 20%+ ROE |
| Cost of Funds | 100+ bps improvement over next 3 quarters | Incremental borrowing at 12.9% loaded (150 bps below FY26 avg); old 18-24 month debt running off; 200-300 bps improvement expected over 3 years |
| Opex | Stable over 3 years; 4-5% operating leverage benefit | 54-55% fixed cost; AI-driven headcount efficiencies and scale |
| Total Income Margin | Continues to decline deliberately | 249 bps QoQ drop; cumulative 8-9% P&L benefit over 3 years from op-leverage, cost of funds, and risk reduction offsets margin compression |
| LAP | Breakeven by Q3 FY27 | Tech-enabled model; branch payback 7-8 months; 20%+ ROE target |
| Organic Channel | 40-50% stabilization target | Currently 31% (up from 8% in 2022-23); brand-driven sourcing quality |
Risks & Constraints
| Risk | Context |
|---|---|
| Industry Stress Pockets | Bureau data shows headline asset quality benign, but stress concentrated in small-ticket loans, multi-lender borrowers, and households taking new lines to service existing debt. Management watches early-warning signals; installed lender-level action via PIN code pauses and segment-level tightening. |
| AI Reshaping Salary Profiles | Early signs of AI reducing employment durability in specific segments; management added EPFO credit checks, account aggregator verification, and tightened approval bands (4→3.7) in affected segments. |
| Q1 Seasonality | Stage 2 elevated sequentially (QoQ) due to seasonal factors; collection efficiency at 96.82% and bounce rates normalized by July. Historically a Q1 phenomenon that reverts by Q2-Q3. |
| Revenue Margin Compression | Deliberate strategy of shifting to lower-priced high-quality customers plus rising off-book share (49.7%→53.6%) compresses total income/AUM (down 249 bps QoQ). Must be offset by 4-5% op-leverage benefit, 200-300 bps cost-of-fund reduction, and lower credit cost over 3 years. |
| Geopolitical (West Asia) | Risk is second-order: higher oil prices, shipping costs, and customer confidence. Management monitoring, no direct book impact currently. |
| FLDG Capital Blockage | 5% FLDG on off-book disbursements blocks capital; unutilized portion not reflected in credit cost but reduces capital available for lending. |
Q&A Highlights
AUM Growth Sustainability
- Question: What factors support AUM growth and how sustainable is it? Can we surpass full-year guidance? (Tushar, Individual Investor)
- Answer: Growth driven by two factors — relentless risk containment (sharper models approving more high-quality customers) and balanced prudence (reopening 180 of 450 paused PIN codes). Simple math: 13% QoQ growth already implies over-achievement of the 40% next-12-month guidance; management firmly confident of over-delivering. (Ranvir Singh, CEO)
Risk Reconciliation: PIN Codes, Bounce Rates & July Trends
- Question: How many PIN codes are now paused? Collection efficiency is lower and bounces higher, yet you're more confident on more PIN codes — how does this tally? How did July trend vs June? (Abhishek Murarka, HSBC)
- Answer: Of the 450 PIN codes paused last quarter, 180 restarted; 270 remain paused and are monitored. The decision to reopen is based on credit cost (down 205 bps YoY to 6.80%, and 22 bps QoQ) rather than the bounce metric, which is range-bound and affected by technical bounces, seasonality, and portfolio tenure mix. New vintages since December 2025 show markedly improved bounce and loss expectations. July bounced back and improved vs June-end averages. (Ranvir Singh, CEO)
Yield, Pricing & Margin Strategy
- Question: What is the incremental yield on products, and how will the reduced revenue margin be compensated in the DuPont to deliver 5% ROA? (Abhishek Murarka, HSBC; Nidhesh Jain, Investec)
- Answer: Personal loan interest yield is 29-30%, rising to 36-37% with fees; LAP averages ~21.8% (range 16-24%). Strategy: over 3 years, three unambiguous benefits — 4-5% operating leverage (opex flat at 18.0% of AUM, 54-55% fixed), 200-300 bps cost-of-fund reduction, and ~40% lower risk/credit cost — cumulatively 8-9% benefit. Management passes benefits to customers only after realizing in the book (with a lag), protecting ROA at 5%+. (Ranvir Singh, CEO)
Cost of Funds & Rating Upgrade Path
- Question: Is the reported cost of borrowing higher? What is the incremental cost and the path to improvement? (Abhishek Murarka, HSBC)
- Answer: Cost moved from monthly to daily average AUM basis (reported increase is an anomaly from quarter-end debt raise timing; daily-average basis shows ~10 bps improvement). Only one incremental raise in Q1 at 12.9% loaded cost — 150 bps below FY26 average. Guidance: 100+ bps cost-of-borrowing improvement in H2 FY27 as old 18-24 month debt rolls off. Active rating engagement with India Ratings and CRISIL; upgrade could meaningfully impact FY28 cost of funds. (Krishnan Vishwanathan, CFO; Ranvir Singh, CEO)
Product Roadmap & Long-Term Strategy
- Question: How should we think about product additions to serve customers over a decade horizon? (Manish Ostwal, Nirmal Bang)
- Answer: Pecking order evaluated: gold loan, business loan, education loan, auto loan, loan against mutual funds. Management won't speculate on the next launch. LAP remains the immediate focus (7.7% of book, scaling well), with product additions to be done in a way that absorbs burn while delivering 5% ROA and 20%+ ROE consistently. Personal loan alone remains a massive opportunity — no year of less than ~60% growth in company history. (Ranvir Singh, CEO; Krishnan Vishwanathan, CFO)
Organic Channel & Fee Income
- Question: What is the share of organic channel sourcing and how will mutual fund distribution contribute to fee income? (Nidhesh Jain, Investec; Manish Ostwal, Nirmal Bang)
- Answer: Organic channel at 31% in Q1, up from ~27% last quarter and 23-24% FY26 average (was 8% in 2022-23); expected to stabilize at 40-50% as a credible brand builds. Fee income beyond lending comes from insurance (already live with credible partners) and mutual fund distribution (AMFI registered) — adds a new revenue line and strengthens profitability without altering the core business. (Ranvir Singh, CEO)
AI Impact on Underwriting & Salary Profiles
- Question: Can you elaborate on early signs of AI reshaping salary profiles and how underwriting has changed? (Nidhesh Jain, Investec)
- Answer: Industry sourcing over last two quarters shows higher delinquency signs, while OnEMI's post-December vintages show the opposite (better bounce, collection efficiency, early indicators). Specific tightening: (1) salaried applicants lacking recent EPFO credits — flagged with additional EPFO and account aggregator checks (salary credit as fresh as yesterday, not stale data); (2) self-employed with declining banking credit over 6 months — reduced disbursements; (3) approval band cut from 4 to 3.7 in specific segments — under re-evaluation this quarter. (Ranvir Singh, CEO)
LAP Business Scale-up & Economics
- Question: How is the LAP venture performing? What are ROA/ROE targets, branch payback, and early vs recent bucket performance? (Devansh Dhruv, Equentis Wealth Advice)
- Answer: LAP risk curves shaping up well, with early vintages (1.5-2 years old) performing as per or better than expectations. Breakeven expected by Q3 FY27. Branch payback at 7-8 months vs 16-18 months industry due to 40%+ customers sourced from existing PL base. ROE target: 20%+, making it non-dilutive; also spreads fixed expenses further. (Ranvir Singh, CEO)
FLDG Accounting & Product-wise Disclosure
- Question: Does FLDG form part of opex/credit cost, and can we get product-wise yield disclosure? (Aditya Mundra, Mytemple Capital)
- Answer: Only the utilized FLDG portion is recognized in credit cost; the unutilized 5% blocks capital but doesn't flow through P&L. Product-wise disclosures (yield, NIM) will consider from next quarter — currently only on-balance-sheet NIM is disclosed (avg yield ~32%, spread ~18%); off-book is booked as servicing fee income, so distinct commercial arrangements make off-book NIM disclosure misleading. (Ranvir Singh, CEO; Krishnan Vishwanathan, CFO)
Key Takeaway
OnEMI delivered a robust Q1 FY27 with AUM up 61% YoY to ₹8,001 crore and PAT up 59% YoY to ₹95 crore, while credit cost improved 205 bps YoY to 6.80% of average AUM. Management reaffirmed all FY27 guidance — 40%+ AUM growth (over-delivery likely given 13% QoQ), 15% credit cost reduction, 20%+ ROE and 5%+ ROA — while deliberately compressing revenue margins (249 bps QoQ) to acquire higher-quality customers and expand off-book share to 53.6%. Strategy centers on AI-led underwriting (7,200+ signals, AUC 74%, 50+ fraud checks), scaling the technology-enabled LAP book (₹617 crore, 101 branches, breakeven by Q3 FY27), and building fee income via mutual fund distribution post-AMFI registration. Cost of funds is expected to improve 100+ bps over the next three quarters with incremental debt at 12.9%, and a potential credit rating upgrade looms for FY28. Watch items include industry stress pockets in small-ticket multi-lender segments, AI-driven employment disruption affecting salary profiles, and the pace of margin pass-through, though recent vintages and reopened PIN codes support cautious optimism.