FY26 AUM growth guidance revised to 21-23%
Management expects AUM growth of 21-23% for FY26, down from medium-term guidance of 24-26%, due to heightened competition and higher attrition.
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What management said would happen.
growth
NII expected stable in FY26
Net interest income is expected to remain stable and in line with FY25, supported by cost of fund reductions and product mix shifts.
NIM/NTI to moderate by 15-20 bps in FY26
Net interest margin (as NTI/Assets) is expected to moderate by 15-20 bps due to lower investment income and lower assignment income.
ROA expected range-bound at 2.0-2.2% for FY26
Return on assets is expected to remain in the 2.0-2.2% range, in line with medium-term guidance, with ROE moderating to 11-12% due to excess capital.
Retail disbursements to pick up with affordable/near-prime segment
Management expects retail disbursement growth to accelerate as the affordable and near-prime verticals start delivering, offsetting the current 7% YoY growth in retail disbursements.
Credit cost to remain in 14-17 bps range
Normalized credit cost (excluding overlay releases) is expected to stay in the 14-17 bps band, as overlay is nearly exhausted (only ₹10 crore remaining).
Developer finance mix not to exceed 15%
Management stated internal view is to keep construction finance mix below ~15% of AUM, currently at 11.7%.
Leverage ratio target of 8x
Management considers 8x leverage as sustainable and will manage capital deployment to reach that level over time.
NIM compression of 15-20bps for FY26
Management expects full-year net interest margin to decline 15-20bps year-over-year, factoring in portfolio yield pressure and another expected rate cut in December.
AUM growth to revert to medium-term guidance in FY27
Management expects AUM growth to return to its medium-term trajectory in FY27 as attrition pressures ease with rate stabilization.
OPEX to NTI target of 14-16% in 3-4 years
Management reiterated its aspiration to achieve an operating expense to net total income ratio of 14-16% over a 3-4 year horizon.
Leverage ratio target of 7.5x in 2-2.5 years
Management expects to reach a gearing ratio of approximately 7.5x within two to two and a half years, driven by growth and capital management.
Medium-term AUM growth of 24-26%
Management expects AUM to grow at 24-26% annually over the next three years, driven by home loans and the new affordable vertical.
OPEX to NIM to decline to 14-15%
Operating expenses as a percentage of net interest income are targeted to fall to 14-15% in the medium term, from 19.8% currently.
ROA of 2-2.2% and ROE of 13-15%
Return on assets is guided at 2-2.2% and return on equity at 13-15% in the medium term, with leverage of 7-8 times.
Credit cost to remain at 20-25 bps
Credit costs are expected to stay in the range of 20-25 basis points, with GNPA between 40-60 bps and provisioning coverage of 40-50%.
NTI compression of 8-10 bps for FY26 vs FY25
Net total income margin expected to compress 8-10 basis points for the full year, revised from earlier 15-20 bps guidance due to higher assignment income in Q3.
Sambhav loan monthly disbursement run rate target of INR 600 crore+ in 12-15 months
Management targets doubling the current monthly run rate of INR 325-350 crore to over INR 600 crore within 12-15 months through strategic investments.
Medium-term AUM growth guidance of 24-26% over 3-4 years
Management reiterated medium-term AUM growth of 24-26% over 3-4 years, contingent on industry growth of 12-14% and stabilization of attrition.
Cost of funds expected to decline 20-25 bps in FY27
Management expects cost of funds to reduce by 20-25 bps in FY27 due to repricing of existing borrowings and lower incremental borrowing costs.
Cost of funds to decline 34-35 bps in FY26
Assuming 75 bps cumulative repo rate cuts, management expects cost of funds to drop by 34-35 bps on a full-year basis in FY26.
NIM compression of 10-15 bps expected
With steady book mix, net interest margin could compress by 10-15 bps during FY26, partly offset by asset mix changes.
Credit cost guidance of 20-25 bps on assets
On a steady-state basis (excluding assignment effects), credit cost is expected to be 20-25 bps on assets under management.
No equity capital raise in FY26
Management stated there is no plan to raise new equity capital in FY26, with leverage at 5.1x and headroom up to 7.5x.
FY27 ROA towards upper end of 2%-2.2% medium-term range
Management expects ROA to be at the upper end of the medium-term guidance range, assuming no policy rate change, with margin compression offset by OpEx efficiency and lower credit costs.
Sambhav monthly disbursements to exceed INR 600 crore in 12 months
The Sambhav business is on track to achieve monthly disbursements of over INR 600 crore within the next 12 months.
Q1 FY27 NIM likely sideways with slight compression
Net interest margin in Q1 FY27 is expected to be broadly stable versus Q4 FY26, with a slight compression possible due to yield pressure.
Full-year FY27 guidance to be provided with Q1 results
Management will provide a detailed assessment for FY27 along with Q1 FY27 results, given macro uncertainty.