Financial Services Sector — Q3 FY26 Earnings Overview

RBI directed INR 12.83 billion provision for agricultural PSL non-compliance; similar observations could arise for other portfolios.

Branch expansion into Bihar, Jharkhand, and Rajasthan for secured MSME lending could face underwriting challenges in unfamiliar markets.

Management disclosed a 40% dropout rate due to deliberate pruning of over-leveraged customers, which could limit growth if new acquisition slows.

Analyst noted ROE is low relative to capital base; management did not provide a clear path to improve ROE, indicating potential inefficiency.

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.