SRG Housing Finance Q4 FY25 earnings call
In brief
SRG Housing Finance targets ₹1,000-1,100 cr AUM in FY26, ₹1,300-1,350 cr in FY27; FY25 PAT grew 14% to ₹24 cr
- Management's tone
- Confident
- What was said
- Leaned positive
- Guidance
- First guidance issued
- Analyst pushback
- Low
- Stock, next session
- −1.31% (Nifty 50 +0.47%)
- FY25 PAT grew 14% to ₹24 cr on a 26% rise in loan book to ₹759 cr; total income up 22% to ₹155 cr.
- FY26 AUM target of ₹1,000-1,100 cr with disbursement ~₹400 cr; FY27 AUM target of ₹1,300-1,350 cr.
- Asset quality improved: GNPA 1.84% (vs 2.29%), NNPA 0.61% (vs 0.69%); credit cost 1.82%.
- ROA declined to 3.17% from 3.56% as net worth rose to ₹264 cr after ₹80 cr equity raise; targets 3.5%+ next year, 4% later.
- Branch expansion capped at 100 (90 today); no new branches for next 2 years as cost-to-income set to fall.
An AI read of the company's transcript · the filing
The numbers
The quarter, Q4 FY25
| This quarter | A year ago | Last quarter | Margin | |
|---|---|---|---|---|
| Revenue | ₹42.8 cr | +18.3% | +9.8% | |
| Profit before tax | ₹7.7 cr | +0.9% | +7.0% | 18% (21% a year ago) |
| Net profit | ₹6.2 cr | +1.8% | +7.8% | 14.5% (16.8% a year ago) |
| EPS (₹) | ₹4.43 | −3.3% | +6.5% |
From the company's filed results for the quarter ended 31 Mar 2025 (standalone), not from the call.
What moved the numbers, as management explained it
- FY25 PAT grew 14% to ₹24 cr; NII up 22% to ₹72 cr and total income up 22% to ₹155 cr on 26% loan book growth.
- ROA dipped to 3.17% from 3.56% as net worth surged to ₹264 cr from ₹159 cr after ₹80 cr preferential equity raise to M3 Investment. (accounting)
- GNPA improved to 1.84% (vs 2.29%) and NNPA to 0.61% (vs 0.69%); credit cost at 1.82%, down from 2.24% earlier, with Stage 2 at 0.46%.
- Loan book grew 26% to ₹759 cr on 7.4% disbursement growth to ₹305 cr; branches expanded to 90 from 67.
The numbers management led with
- AUM: INR759 cr in FY25 (26% YoY growth); FY26 target INR1,000-1,100 cr
- Disbursement: INR305 cr in FY25 (vs INR284 cr prior year); FY26 target ~INR400 cr
- Equity raise: INR80 cr raised in FY25 (M3 Investment 9.17% via preferential allotment); net worth INR264 cr (vs INR159 cr)
Guidance
Guidance on this call
| What | For | What management said |
|---|---|---|
| AUM | FY26 | around ₹1,000-1,100 crores for FY26 |
| AUM | FY27 | around ₹1,300-1,350 crores for FY27 |
| AUM | FY28 | around ₹1,500 crores the year after |
| Disbursement | FY26 | disbursement around ₹400 crores in FY26 |
| Disbursement | FY27 | disbursement around ₹500 crores in FY27 |
| ROA | FY26 | ROA will cross 3.5% in the next year |
| ROA | — | ROA should cross 4% as equity is utilised |
| NIM | — | NIM will increase as repo rate benefit flows through fixed-rate book |
| Branches | FY26-FY27 | branch count capped at 100 for the next 2 years |
| Loan book potential on 90 branches | — | loan book of ₹3,000-4,000 crores on the 90 branches over time |
| Credit rating | — | A- credit rating expected at AUM of ₹1,000 cr |
The business
By business
Housing Finance (overall)
FY25 AUM ₹759 cr (+26%); PAT ₹24 cr (+14%); disbursement ₹305 cr; NIM 10.63% on spread of 10%; 90 branches across 5 states; Q4 disbursement mix Gujarat 38%, Rajasthan 26%, Maharashtra 26%, Karnataka 7.25%, AP 5%.
AUM ₹759 cr · Loan book growth 26% · Disbursement ₹305 cr (+7.4%) · PAT ₹24 cr (+14%) · PBT ₹30 cr · Total income ₹155 cr (+22%) · NII ₹72 cr · Net worth ₹264 cr · Borrowings ₹584 cr · Liquid funds ₹55 cr · EPS ₹17 · NIM 10.63% · Spread 10% · GNPA 1.84% · NNPA 0.61% · ROA 3.17% · Credit cost 1.82% · Stage 2 0.46% · Branches 90 (vs 67)
Outlook: FY26 AUM ₹1,000-1,100 cr; FY27 ₹1,300-1,350 cr; disbursement ₹400 cr in FY26 and ₹500 cr in FY27; 100 branches then no expansion for 2-3 years; ROA to cross 3.5% next year and 4% longer term
Housing Loan
73% of FY25 loan book; portfolio rate held at 18%; average ticket size ₹8 lakhs; average LTV 44%; 100% secured against property.
73% of book · Portfolio rate 18% · Average ticket size ₹8 lakhs · Average LTV 44% · Salaried 26%, self-employed 74%
Outlook: Rate to remain at 18%; no near-term cut despite falling repo as customers are rate-insensitive
Loan Against Property (LAP)
27% of FY25 loan book; portfolio rate around 20%; 100% secured against property.
27% of book · Portfolio rate ~20%
Outlook: Rate to remain around 20%; share capped by NHB 70% HL minimum mandate
Balance sheet, capex and funding
- Net worth ₹264 cr vs ₹159 cr after ₹80 cr equity raise via preferential allotment to M3 Investment (9.17% stake).
- Outstanding borrowings ₹584 cr vs ₹491 cr; mix 46% banks, 48% FIs, 6% NHB.
- FY25 total fund raise ₹274 cr: ₹194 cr from lenders (30% banks, rest FIs) and ₹80 cr equity.
- Liquid funds ₹55 cr; ALM stated as comfortable; 100% loan book secured against property.
- Rating upgraded to BBB+; expects A- at ₹1,000 cr AUM milestone.
- M3 Investment committed further equity support as needed; only 10 new branches planned beyond current 90.
The industry, as management sees it
Management views the rural and semi-urban affordable-housing segment as structurally under-penetrated with limited competition, where SRG's customer base is insulated from macro shocks. Acknowledges recurring stress in adjacent NBFC segments (DHFL, ILFS, microfinance, personal loans) and tighter NHB/bank norms, but expects no direct spillover to its secured housing book.
Risks management named
- ROA dilution in current year from larger equity base (3.17% vs 3.56%)
- Periodic sector stress (DHFL, ILFS, Corona, microfinance, personal loans, AUM valuation issues) and NHB/bank tightening
- War and macro uncertainty could affect financial markets
- New geographies in Maharashtra, Karnataka, Andhra ramp slower than mature states
Q&A
Q&A was dominated by growth path and operating leverage: AUM guidance (INR1,000-1,100 cr FY26, ~INR1,500 cr FY27), branch cap at 90 until AUM milestone, and ROA recovery to 3.5%+ as opex build-up is now complete. The second key thread was asset-quality resilience (GNPA 1.84%, Stage-2 0.46%, SARFESI-led recoveries). New-geography expansion, M3 Investment as a long-term equity backer, and NIM tailwind from repo cut were positively framed; pushback was limited and management was rarely deflected.
Not answered directly
- Branch-level disbursement productivity (provided state-level data instead)
- Specific cost-of-borrowing figure for current book
Asked for a number, answered without one
- Cost-to-income ratio: Said it will not increase; expense rise has already occurred and will be brought down, with branch count capped at 100 for 2 years.
- Branch-level disbursement rate: Management has not tracked it branch-wise; provided state-wide full-year shares (Gujarat 47%, Rajasthan 29%, Maharashtra 15%, Karnataka 2.72%, AP 2-2.25%) instead.
Every question, with its answer
1. ROA trajectory
Aditya A, Unknown
Question. ROA used to be 3.5% earlier but has come down to 3% due to higher cost-income ratio and ~60 bps credit cost. What is the outlook going ahead?
Answer, Vinod Kumar Jain, Managing Director. ROA is 3.17% vs 3.56% in March. The decline is largely because the equity base has expanded. With planned business growth, branch ramp and PAT growth, ROA should cross 4% on the new equity base and should cross 3.5% in the next year.
Follow-up. Push on outlook: ROA down from 3.5% to 3% - management's view on the path forward.
Answer. Reiterated that higher equity is the main reason; with growth, ROA will cross 4% on this equity and 3.5% in the next year.
2. Competitive intensity
Aman, Unknown
Question. How is the competitive intensity in Rajasthan and what is SRG's right to win given the market appears under-penetrated?
Answer, Vinod Kumar Jain, Managing Director. Acknowledged competition in urban areas but said rural and semi-urban markets are still relatively under-served. 40% of business comes from Rajasthan and the rest from Gujarat; SRG targets monthly disbursements of INR10-15 cr from Rajasthan and can comfortably achieve it.
Follow-up. Is the market being targeted by peers as it appears under-penetrated?
Answer. Each company has its own size and appetite; SRG is not constrained by peers' business levels and can grow at its own pace.
Partly answered.
3. NIM and rate outlook
Kush Tandon, Unknown
Question. Last rate-up cycle hurt NIM on the fixed-rate book and opex was also raised - what is the view on NIM and rates as repo falls? Will customer rates be cut?
Answer, Vinod Kumar Jain, Managing Director. The repo-rate cut will offset the fixed-rate lag from the up cycle. Larger ticket sizes in newer states will bring opex/income ratio down. Expansion (Maharashtra, Karnataka, Andhra) has just started delivering, so opex pressure is largely already in. Net-net, PAT should rise. Customer rates kept at 18% on housing and ~20% on LAP because customers are rate-insensitive.
Follow-up. Will new loans be disbursed at a lower rate as repo falls?
Answer. No - housing loan average portfolio maintained at 18% and LAP at ~20%.
4. AUM guidance
Kush Tandon, Unknown
Question. Any guidance on AUM and loan portfolio growth over the next 2-3 years?
Answer, Vinod Kumar Jain, Managing Director. FY26 target INR1,000-1,100 cr AUM; FY27 around INR1,500 cr. Both required investments (expansion and equity) are now in place, so NIM and PAT should rise together.
Follow-up. Opex has risen with new branches - will that normalize?
Answer. All required hiring (Pan-India team, Mumbai corporate office) is complete; further headcount addition will be far smaller than book growth, so opex ratio should fall.
5. New geography underwriting
Kush Tandon, Unknown
Question. In new geographies, are there underwriting or credit-cost challenges versus the home state?
Answer, Vinod Kumar Jain, Managing Director. Teams are local wherever SRG has expanded. Karnataka in particular has clean documentation and faster government processes; Andhra and Maharashtra (registered mortgage) also workable. No incremental underwriting risk flagged.
Follow-up. So broadly, 4% ROA is achievable at INR1,000 cr AUM?
Answer. Confirmed - yes, broadly 4% ROA at INR1,000 cr AUM.
6. Path to INR1,000 cr AUM
Kevin Shah, Unknown
Question. How will SRG cross INR1,000 cr AUM and balance rising cost with AUM and profit growth, given soft profit growth in recent quarters?
Answer, Vinod Kumar Jain, Managing Director. 90 branches are in place; target monthly disbursement of INR30-40 cr implies annual disbursement of INR400 cr+, adding INR250 cr to book and taking it from INR750 cr to INR1,000-1,100 cr. Larger ticket size + lower rates keep opex in check; even a 1-2% rate cut is profit-accretive given fixed-cost base.
Follow-up. Will branch expansion continue beyond 90?
Answer. Target is 100 branches; once INR1,000 cr AUM is achieved, only ~10 more branches will be added. No further branch expansion in the next 2-3 years.
7. Cost-income ratio
Kevin Shah, Unknown
Question. Will cost-to-income rise further from current 60% to 65%?
Answer, Vinod Kumar Jain, Managing Director. No. Opex build-up has already happened; will be brought down. Only 8-10 branches will be added and only after AUM crosses INR1,000 cr. No branch expansion program for next 2-3 years.
8. Credit cost and asset quality
Aditya, Unknown
Question. Credit cost moved from ~20-30 bps to ~60 bps - is there any stress, particularly in new geographies? What is the Stage-2 book trend?
Answer, Vinod Kumar Jain, Managing Director. GNPA is actually 1.82% now vs 2.24% earlier, lower YoY. Stage-2 book is 0.46% - well controlled. In a 100% secured book, asset-quality stress is structurally lower.
Follow-up. Do you get recovery support from SARFESI?
Answer. Yes - 100% recovery via SARFESI; administration support (DM orders, possession, police) has improved significantly and is speeding up recoveries.
9. FY26/FY27 targets
Moderator (multiple participants), Unknown
Question. FY26 target for AUM, disbursement and branches? And 2-3 year outlook?
Answer, Vinod Kumar Jain, Managing Director. FY26: AUM more than INR1,000 cr (committed INR1,000-1,100 cr), disbursement ~INR400 cr, branches stay at 90. FY27: AUM target ~INR1,300-1,350 cr (with stretch to ~INR1,500 cr), disbursement ~INR500 cr, branches move from 90 to 100 after INR1,000 cr AUM.
10. Geographic diversification
Ravindra Singh, Unknown
Question. How are you diversifying geographically, particularly beyond Rajasthan?
Answer, Vinod Kumar Jain, Managing Director. Diversification already happened: Rajasthan -> Gujarat (22 branches) -> Maharashtra -> Karnataka -> Andhra Pradesh. Tamil Nadu to be included in the next 10 branches. Q4 disbursement mix: Maharashtra 26%, Andhra 5%, Karnataka 7.25%, Gujarat 38%, Rajasthan 26%. No single-state concentration risk.
11. Competitive differentiation
Ravindra Singh, Unknown
Question. How do you differentiate from larger HFCs/NBFCs targeting affordable housing?
Answer, Vinod Kumar Jain, Managing Director. Sticking to small-ticket, semi-urban and rural customers; explicitly avoiding large-ticket and urban segments. The team and operating model are built around this segment and enjoy working there.
Partly answered.
12. Branch productivity
Rupal Ratnavat, Unknown
Question. What is the average branch-level disbursement run-rate at mature branches?
Answer, Vinod Kumar Jain, Managing Director. Branch-level data is not tracked; only state-level. FY25 disbursement mix: Rajasthan 29%, Gujarat 47%, Maharashtra 15%, Andhra ~2.25%, Karnataka 2.72%.
Partly answered.
13. M3 Investment stake
Akash Patar, M3 Investment Pvt. Ltd.
Question. M3 Investment acquired 9.17% via preferential allotment - what do they bring to the table?
Answer, Vinod Kumar Jain, Managing Director. M3's biggest contribution is the equity capital and long-term commitment to support future raises. SRG thanked M3 for the trust and said backer confidence underpins the expansion.
Partly answered.
14. Funding sufficiency
Aniket C, Unknown
Question. You have done three fundraises - how does this help network, borrowing cost and is it enough for the INR1,000 cr target?
Answer, Vinod Kumar Jain, Managing Director. NHB caps leverage at 12x net owned funds but industry typically runs at <5x. With INR264 cr equity at 5x, SRG can comfortably fund growth up to INR1,500 cr AUM without additional equity.
Follow-up. Can you elaborate on senior management hiring for scale and pan-India growth?
Answer. Listed HODs - credit head with 15 yrs exp, National Recovery Head (Sanjay Vaishy/Jorji), Praphull Dwivedi (Head - Programs & Technology), Ashish Kothari (Operations & Product, 18 yrs exp, IIM), Ashwin Bharadwaj (Risk Control), Abhishek Churana (Product & Communications), Suresh (Business), Shubham Katta (HR, IIM Kolkata, ex-AU Bank). Board has three banker Independent Directors plus CAs.
15. Macro slowdown
Arvind Kumar, Unknown
Question. There is a slowdown in the economy - is it affecting SRG?
Answer, Vinod Kumar Jain, Managing Director. Every year brings some stress in finance (DHFL, ILFS, Corona, microfinance, personal loans, AUM valuation issues, NHB/bank tightening). Housing finance has so far been insulated. Rural/semi-urban customers are not impacted by macro shocks - business is regular and sticky. War/macro shocks could affect financial markets but not the underlying business.
Partly answered.
16. NIM trajectory follow-up
Kevin Shah, Unknown
Question. With the repo cut, how will NIM improvement flow through on the existing fixed-rate book in coming quarters?
Answer, Vinod Kumar Jain, Managing Director. NIM will rise; next quarter will see a good impact. Fixed-rate book had absorbed losses during the up cycle and will now benefit from the down cycle.
17. Asset-quality buckets and NCD plans
Anand Mundra, Unknown
Question. What is the Stage 1 and Stage 2 mix? Also plans to diversify borrowings via NCD and current cost of borrowing?
Answer, Vinod Kumar Jain, Managing Director. Stage-1 (0 DPD) 89.23%; 0-30 DPD 3.5%; 30-60 DPD 3.62%; 60-90 DPD 1.76%; 90+ DPD 1.84%. Borrowing mix 49% FIs, 48% banks, 6% NHB. NCDs avoided for short tenor and bullet structures due to cost and ALM; will consider if long-tenor (>5 yrs) NCDs available on acceptable terms.
18. Demand and marketing channels
Akash Patar, M3 Investment Pvt. Ltd.
Question. Any demand issue for higher growth? Should you try Instagram marketing in tier-2/3 cities?
Answer, Vinod Kumar Jain, Managing Director. No demand issue. SRG's customers are not on Instagram - decisions are taken by parents of the house-buyers. Facebook, branch-based direct sourcing and venue marketing (canopy etc.) drive leads. Branches cover a 50-60 km radius.
19. Tamil Nadu and Telangana
Arvind Kumar, Unknown
Question. Will you open branches in Tamil Nadu and Telangana in FY26?
Answer, Vinod Kumar Jain, Managing Director. Yes - the next 10 branches after AUM crosses INR1,000 cr will go into Tamil Nadu and Telangana.
20. Balance transfer
Arvind Kumar, Unknown
Question. What is the balance-transfer share in FY25?
Answer, Vinod Kumar Jain, Managing Director. Balance transfer is ~10-11%; largely churns in and out, with only a 1-2% net impact.
What was said
Topic by topic, in the order it was spoken
FY25 Financial Performance · Vinod Kumar Jain (Managing Director)
- AUM at INR759 cr, marginally above INR750 cr target; 26% YoY growth in loan book.
- Disbursement of INR305 cr in FY25 vs INR284 cr prior year (7.4% growth).
- PAT INR24 cr, up 14% YoY; PBT INR30 cr (vs INR26 cr); total income up 22% to INR155 cr.
- Net interest income INR72 cr vs INR59 cr; net worth stepped up to INR264 cr from INR159 cr post equity raise.
- EPS INR17 vs INR15; spread held at 10% and NIM on gross book at 10.63%.
Loan Book Composition · Vinod Kumar Jain (Managing Director)
- Product mix: housing loan 73%, loan-against-property 27%; salaried 26%, self-employed 74%.
- 100% of book secured against property; average housing-loan ticket size INR8 lakhs; average LTV 44%.
- Average HL yield held at ~18% and LAP yield ~20%; pricing kept stable despite rate environment.
Asset Quality · Vinod Kumar Jain (Managing Director)
- GNPA improved to 1.84% from 2.29% YoY; NNPA at 0.61% vs 0.69%.
- 100% secured book and SARFESI-driven recoveries cited as structural mitigants.
- Stage-2 book at 0.46%; Stage-1 89.23%; 0-30 DPD 3.5%, 30-60 DPD 3.62%, 60-90 DPD 1.76%, 90+ DPD 1.84%.
Funding, Liquidity & Capital · Vinod Kumar Jain (Managing Director)
- FY25 fund raise INR274 cr: INR194 cr debt (30% banks, 70% FIs) and INR80 cr equity.
- Outstanding borrowings INR584 cr vs INR491 cr; mix 46% banks / 48% FIs / 6% NHB.
- Liquid funds INR55 cr; ALM described as comfortable; current credit rating BBB+.
- Management avoided short-tenure and bullet NCDs owing to higher cost and ALM mismatch.
Network & Geographic Footprint · Vinod Kumar Jain (Managing Director)
- Branches scaled to 90 from 67 in FY25; further additions paused until AUM crosses INR1,000 cr.
- Diversification beyond Rajasthan (40% of book) into Gujarat (38%), Maharashtra, Karnataka and Andhra Pradesh.
- Q4 disbursement mix: Gujarat 38%, Rajasthan 26%, Maharashtra 26%, Karnataka 7.25%, Andhra 5%.
In their words
Equity has also come with you. So both the things that were to happen, have happened now. So, your NIM has to increase, your PAT has to increase.
All the things that had to be done have been completed. Now our rating has also become BBB plus. And as soon as it comes around INR1,000 crores, then our rating will also come in A minus.
100% money comes from SARFESI. SARFESI's guidelines are so strong and well-made. Earlier, we used to say that it takes more time. But now, there is a lot of improvement.
To check next time
What management committed to on this call, or the dates they gave.
- AUM trajectory toward ₹1,000-1,100 cr FY26 target
- Disbursement run-rate (FY26 target ~₹400 cr)
- NIM expansion as repo rate benefit flows through fixed-rate book
- ROA recovery toward 3.5% from 3.17%
- New 10 branches in Tamil Nadu and Telangana after ₹1,000 cr AUM
- Rating upgrade to A- as AUM approaches ₹1,000 cr
Transcript
We have not transcribed this call's recording. Read the company's transcript (PDF).
The stock after the call
| After the call | Close | Stock | Nifty 50 |
|---|---|---|---|
| Next session Mon 5 May 2025 | ₹290.45 | −1.31% | +0.47% |
| 5 sessions Fri 9 May 2025 | ₹297.75 | +1.17% | −1.39% |
| 20 sessions Fri 30 May 2025 | ₹312.45 | +6.17% | +1.66% |
From the close of Fri 2 May 2025, ₹294.30: the close before the call day (the call's time is not on file). Adjusted daily closes; the move includes everything else that happened in those sessions.