Transcript-Q1FY26
SGFIN · price
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Awaiting price reaction for this filing.
SG Finserve reported Q1 FY26 AUM of INR2,630 crores, up 13% QoQ and 86% YoY, with operating income of INR67.59 crores (+25% QoQ, +55% YoY) and an all-time-high PAT of INR24.52 crores (+27% YoY). Gross NPAs remained nil, supported by 80% secured book and improved book churn of 30 days (vs 36 days). Q1 PAT was suppressed by a one-time ESOP charge of INR2.7 crores; full-year FY26 ESOP impact is INR9.9–10 crores, dropping to under INR1 crore in FY27. Management reiterated FY26 AUM target of INR3,500–4,000 crores and FY27 target of INR6,000 crores, with 15–18% ROE and ~4.5% ROA guidance. Average loan book for FY26 is expected at INR2,900–3,000 crores, with yields of 12.25–12.5% and cost of borrowing at ~8.25%, implying a ~4% spread. The company highlighted INR6,400 crore MOU portfolio, 48 anchor tie-ups, INR340 crores equity infusion expected by April 2026, and banking line expansion to INR4,500 crores by FY27.
Strong execution with negligible NPAs and a clear path to AUM and profitability growth; the FY27 drop in ESOP drag should support meaningful margin expansion and better PAT optics, which is positive for shareholders. Investors should watch sequential AUM additions, average loan book disclosures (which the company has now agreed to publish), and progress on warrant conversion and banking line sanctions.