Event Participants
Executives
2 Jay Mota, Manish Shah
Analysts
11 Agarwal Ram, Ankur Raj, Deeya Jain, Jay Jain, Pranav, Raj, Raj Jain, Rohan Shah, Rohan Shah, Shlok Sanghvi, Tushar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Net Interest Income | ₹42 crores | +36% YoY, driven by AUM growth and margin expansion |
| Profit After Tax | ₹13 crores | +36% YoY, tracking historical growth trajectory |
| Assets Under Management (AUM) | ₹1,731 crores | +22% YoY; +1% QoQ due to seasonal Q1 pattern |
| Disbursements | ₹226 crores | +37% YoY, strong demand across core vehicle finance |
| Two-Wheeler Share of AUM | 84.1% | Down from prior periods; target 75-77% by FY27 end |
| Top-Up Loan Share | 5.1% | Growing as vintage branches mature past 3-year mark |
| Three-Wheeler Share | 3.1% | Supported by all-India TVS Motor tie-up |
| Used Vehicle Loan Share | 1.5% | Early stage; scaling with dedicated leadership |
| Stage 1 Assets | ₹1,619 crores (93.55%) | Strong asset quality, improved QoQ |
| Stage 2 Assets | ₹53 crores (3.4%) | Lower vs previous quarter |
| Gross Stage 3 Assets | ₹59 crores (3.41%) | Gross NPA at 3.41%, Net NPA at 2.52% |
| ECL Provision | ₹25 crores | 3.3x IRAC norm of ₹7.57 crores, healthy excess buffer |
| Capital Adequacy Ratio (CRAR) | 24.40% | Down from 29.81% in FY25; well above regulatory minimum |
| Average Cost of Borrowing | 10.86% | +15-20 bps QoQ due to high liquidity (₹200 cr) carried in Q1 |
| Borrowing Mix | 60% Term Loans, 25% NCDs, 15% PTC/CC | Diversified funding across 3 PSU banks, 10 private banks, 25 NBFCs |
| ROA Target (FY27) | ~3.5% | Up from current levels driven by high-yield product mix shift |
| NIM Target (FY27) | 13-14% | Supported by declining cost of funds and rising yields |
Geographic & Segment Commentary
Core Vehicle Finance (2W/3W/Used Car): 95%+ secured portfolio; 2W disbursements drive 84% of AUM; seasonal Q1 weakness (no festivals) masks 37% YoY disbursement growth; Q2/Q3 historically deliver bulk of AUM growth due to festival seasons.
South India Expansion (Nammaloan/Sreesastha Partnership): Launched in Karnataka July 2026; Tamil Nadu entry within FY27; targeting ₹60-75 crore AUM in FY27; break-even expected in 6-9 months (vs typical 9-12); 100% funded by Manba, BC model with full hypothecation; senior ex-TVS Credit hire leading operations.
MSME Loan Against Property: Launched Q1 FY27; ticket size ₹8-20 lakhs targeting shop-owning businessmen; initial goal 2-3% of AUM by FY27 end; secured lending diversification; disbursements just commenced.
EV & Rural Financing: Battery replacement finance for e-3W at ₹60,000 ticket (post 15-month usage); OEM tie-ups with risk-sharing; initially for existing customers then broader market; partnerships with AMU Leasing and S.H. Finserv expanding rural reach.
High-Yield Product Suite: Personal loans, top-up loans, used 2W loans scaling as branches mature (5 of 6 states >4 years vintage); dedicated senior leadership now overseeing these products; targeting 30% of incremental lending at higher IRRs.
Company-Specific & Strategic Commentary
Capital Raise: ₹100 crores via preference shares by September/October 2026 to support 35-40% AUM growth and restore CRAR headroom; management anticipated decline from 29.81% to 24.40%.
Digital Transformation: 90% proprietary tech stack (LOS/LMS/LAS) built over years; only MSME LAP uses vendor-owned software; investing significantly in personal loan software this year; 60% loans approved in 1 minute, 92% same-day sanction; fully digital disbursement (e-sign, NACH, scan-based) now live across all products.
In-House Collection Advantage: 85% collections handled internally by 600-person team vs peers using third-party agencies; materially lowers opex and supports asset quality; cited as key competitive moat.
State Expansion Framework: Selection criteria: (1) market size for 2W/3W, (2) TransUnion credit performance data, (3) competitive landscape, (4) 15% market share target in 4 years, (5) leadership availability, (6) OEM partner strength. FY27 focus: deepen UP, MP, Rajasthan gaps + South entry; no new North states planned.
Shareholder Returns: First interim dividend of ₹0.25/share (FV ₹10) declared for FY27, signaling confidence in cash flow generation.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| AUM Growth (FY27) | 35-40% YoY | Based on strong momentum; Q2/Q3 festival quarters to drive bulk of growth |
| ROA (FY27) | ~3.5% | Driven by product mix shift to higher-yield personal, top-up, used 2W loans (30% of incremental) |
| NIM (FY27) | 13-14% | Cost of borrowing declining, lending yields rising with mix change |
| Two-Wheeler AUM Share | 75-77% by FY27 end; 65% in 3 years | Diversification via personal, top-up, used 2W, 3W, MSME LAP, battery finance |
| Nammaloan AUM (FY27) | ₹60-75 crores | Break-even in 6-9 months; Karnataka live, Tamil Nadu within FY27 |
| MSME LAP AUM Share | 2-3% by FY27 end | New product; ticket size ₹8-20 lakhs; secured lending entry |
| Capital Raise | ₹100 crores via preference shares by Sep/Oct 2026 | To fund growth pipeline and maintain CRAR buffer above regulatory minimum |
| PAT Growth Trajectory | ~30%+ YoY sustained | Q1 PAT +36% YoY; management expects similar quarterly performance |
Risks & Constraints
| Risk | Context |
|---|---|
| Capital Adequacy Pressure | CRAR declined from 29.81% (FY25) to 24.40% (Q1 FY27); ₹100 cr preference share raise by Oct 2026 critical to support 35-40% AUM growth; delay or shortfall would constrain disbursements. |
| Cost of Funds Volatility | Average borrowing cost rose 15-20 bps to 10.86% in Q1 due to ₹200 cr liquidity buffer carried post March 2026; management expects decline but rate cycle uncertainty persists; NIM guidance assumes favorable funding cost trajectory. |
| Product Concentration Risk | 84% AUM in two-wheelers despite diversification efforts; transition to 65% target over 3 years depends on successful scaling of untested products (MSME LAP, battery finance, personal loans) and South India execution. |
| Geographic Execution Risk | Simultaneous expansion in UP/MP (large but competitive), Rajasthan (gap filling), and South India (new market with BC partner); requires leadership bandwidth and credit discipline in unfamiliar geographies. |
| Asset Quality in New Segments | MSME LAP and battery replacement finance have no track record; battery product tied to OEM risk-sharing but e-3W operator cash flows vulnerable to utilization drops; MSME LAP ticket sizes (₹8-20L) imply higher per-loan exposure. |
| Regulatory & Rating Dependency | CARE BBB+/Positive and Acuite A- ratings support funding access; any negative rating action or NBFC regulatory tightening (LCR, risk weights) could increase borrowing costs or limit bank funding lines. |
Q&A Highlights
Capital Raise & CRAR Trajectory
- Question: CRAR declined from 29.81% to ~25%; need for more capital? (Rohan Shah, Eternal Capital)
- Answer: Management anticipated decline; raising ₹100 crores via preference shares by September/October 2026 to manage growth and expansion. (Manish Shah)
Product Diversification Strategy
- Question: Which products will replace 2W share as it drops to 60-65%? (Rohan, Investor)
- Answer: Top-up loans, personal loans, used 2W loans, small business loans, MSME LAP. Senior leadership now dedicated to top-up/personal/used 2W; small business loan already at ₹6-7 cr/month disbursements, ₹100+ cr AUM. (Manish Shah)
MSME LAP Details
- Question: Ticket size, customer profile, tenure for MSME LAP? (Rohan Shah, Eternal Capital)
- Answer: Targeting shop-owning businessmen; ticket size ₹8-20 lakhs (max ₹20L); secured against property; just launched, targeting 2-3% AUM by FY27 end. (Manish Shah)
Battery Replacement Finance
- Question: Ticket size, contribution, growth outlook for e-3W battery financing? (Pranav, Investor)
- Answer: ₹60,000 ticket; addresses battery degradation at 15-month mark preventing NPA; initially for existing customers with OEM tie-ups and risk-sharing; will expand to wider market. (Manish Shah)
Technology Strategy & Capex
- Question: Proprietary vs outsourced tech; tech capex as % of revenue? (Pranav, Investor)
- Answer: 90% proprietary (LOS/LMS/LAS); only MSME LAP uses vendor-owned software; investing significantly in personal loan software this year; tech spend to remain in similar range as % of expenses. (Manish Shah)
Profitability Outlook
- Question: Expected profitability trend for coming quarters? (Ankur Raj, Investor)
- Answer: Cannot give specific guidance but will grow in historical range; AUM growth 35-40%; PAT grew 30%+ this quarter, similar performance expected. (Manish Shah)
Funding Strategy & Borrowing Cost
- Question: Debt reduction in Q1; liquidity strategy; borrowing cost trajectory? (Tushar, Investor)
- Answer: Reduced