Sbfc Finance Limited has informed the Exchange about Transcript
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SBFC Finance reported Q1 FY26 PAT of INR 101 crores, up 28% YoY and 7% QoQ, marking the first quarter crossing the INR 100 crore profit mark. AUM grew 30% YoY to INR 9,351 crores, supported by 215 branches (10 added this quarter). Asset quality remained range-bound with GNPA at 2.78% and PCR at 44.4%, while credit cost stood at 1.11%. Yields improved 11 bps QoQ to 17.99% and spread expanded 14 bps to 8.67%, with ROE rising to 13.53% from 12.3% in Q1 FY25. Management flagged rising 1+ DPDs and stress in smaller ticket MSME loans, particularly after political events in Karnataka last quarter, leading them to tighten underwriting and raise rejection rates by 10%. Guidance remains for 5-7% QoQ AUM growth, 50 bps reduction in cost-to-income for the full year, and 15-20 bps higher credit cost from current levels.
Shareholders should note management's cautious stance on asset quality with guided credit cost increase, balanced against improving profitability metrics, falling cost of borrowing, and a clear path to a 15% ROE target. The mix shift toward gold loans and tightening on smaller MSME tickets signals prudent navigation of cycle stress, though near-term margin may face pressure from higher provisioning.