Aye Finance vs Dar Credit & Q3 FY26

Aye Finance delivered a strong Q3 FY26 with PAT surging 87% YoY to ₹43 crore, driven by improving credit quality and operating leverage. Disbursements grew 35% YoY to ₹1,310 crore, while AUM expanded 23.5% YoY to ₹5,232 crore. Credit cost fell to 4.69% of AUM, the fourth consecutive quarterly decline, with collection efficiency on non-overdue loans at 99.3%. Management guided for 29-30% AUM growth in FY26 and a three-year vision of 30% CAGR, credit cost of 3.25-3.75%, and ROA of 4-4.5%. The mortgage book (21% of AUM) is scaling, and repeat loans (39% of growth) enhance efficiency. Key risk: elevated credit costs may normalize slower than expected if macroeconomic stress persists.

Guidance read

FY26 AUM growth of 29-30%: Management expects full-year AUM growth of 29-30%, driven by strong Q4 disbursement momentum. Three-year vision: 30% CAGR, credit cost 3.25-3.75%, ROA 4-4.5%: Over the next three years, the company targets consistent 30% AUM growth, credit cost between 3.25% and 3.75%, and ROA of 4-4.5%. Q4 FY26 annualized credit cost below 4%: Management expects quarterly annualized credit cost to fall below 4% in Q4 FY26, setting up for FY27. Mortgage portfolio to reach 30% of AUM over 3 years: The mortgage loan share is targeted to increase from current 21% to 30% of total AUM over the next three years.

Risk read

Key risks include Bihar regulatory risk from microfinance ordinance — A new Bihar ordinance on microfinance could impact collections, though management believes business loans are less affected and similar past state regulations had minimal impact.; Elevated credit cost normalization may be slower than expected — Credit cost at 4.69% remains above the target range of 3.25-3.75%; any delay in normalization could pressure profitability.; Mortgage team costs weighing on opex — The addition of 1,300-1,400 mortgage staff has increased operating expenses; profitability improvement depends on mortgage book scaling to absorb these costs.; Competition in mortgage lending may pressure yields — Increased supply in the mortgage segment could lead to pricing pressure, potentially offsetting benefits from lower credit costs..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Dar Credit & Capital delivered a strong Q3 FY26 with net profit of ₹2.52 crore and PAT margin expanding to 20%, the highest in five quarters. Revenue stood at ₹12.61 crore and EPS at ₹1.77 (quarterly). The 9-month PAT of ₹7.04 crore already crossed 85% of FY25 full-year PAT, positioning the company for record annual profitability. Growth was driven by disciplined underwriting, a shift toward secured MSME lending (micro LAP) and the niche municipal employee loan product, which together now form the core portfolio. Asset quality remains robust with GNPA at 1.9% and NNPA below 1%. Management guided for AUM to reach ₹235 crore by Q4 FY26 and cross ₹300 crore by FY27, supported by branch expansion into Bihar, Jharkhand, and Rajasthan. No equity fundraising is planned given a strong CAR of 43.84% and ample debt headroom. Key risk: rapid geographic expansion could strain asset quality if underwriting standards slip.

Guidance read

AUM to reach ₹235 crore by Q4 FY26: Management expects to add ₹30-35 crore in AUM during Q4, closing FY26 at around ₹235 crore. AUM to cross ₹300 crore by FY27: Balance sheet assets projected to exceed ₹300 crore by March 2027, with borrowings increasing to ~₹250 crore. Average monthly disbursement of ₹14-15 crore: Internal target for monthly disbursement run-rate to support growth without compromising asset quality. NCD issuance plan of ₹100-125 crore: Company plans to raise ₹100-125 crore via listed NCDs in the coming year to fund growth.

Risk read

Key risks include Geographic expansion into new states may strain asset quality — Branch expansion into Bihar, Jharkhand, and Rajasthan for secured MSME lending could face underwriting challenges in unfamiliar markets.; High customer dropout rate of 40% — Management disclosed a 40% dropout rate due to deliberate pruning of over-leveraged customers, which could limit growth if new acquisition slows.; ROE remains compressed at 7.5% despite high CAR — Analyst noted ROE is low relative to capital base; management did not provide a clear path to improve ROE, indicating potential inefficiency.; No AI adoption may limit scalability — Management stated they do not see need for AI in underwriting, relying on personal touch; this could hinder cost efficiency and scalability vs peers..

Promise ledger

Scorecard data is being built as historical quarters are processed.