Arman Financial Services Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Arman Financial Services Ltd filed with BSE on 05 Jun 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Arman Financial Services reported record consolidated AUM of Rs 2,728 crores in FY26, up 22% year-on-year, with highest-ever quarterly disbursements of Rs 951 crores. Consolidated profit after tax for Q4 stood at Rs 41 crores, up 85% sequentially and 220% year-on-year, while full-year PAT was Rs 57 crores, up 9% year-on-year. Management attributed the improvement to separation of credit and recovery functions from branch operations and a shift toward individual-level credit evaluation, while noting elevated operating costs from the new underwriting model.
1 statement from this call is not shown because its supporting quote could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Consolidated AUM: INR2,728 crores (FY26)
p. 3
“Arman's AUM crossed to it's record AUM INR2,728 crores in FY '26, representing a year-on-year growth of 22% along with its highest-ever quarterly disbursements of INR951 crores.”
Aalok Patel, page 3 of the filed PDF · View the filing
Consolidated PAT: INR41 crores (Q4 FY26)
p. 4
“Consolidated profit after tax for the quarter stood at INR41 crores, registering a growth of 85% sequentially and 220% year-on-year.”
Aalok Patel, page 4 of the filed PDF · View the filing
Consolidated PAT: INR57 crores (FY26)
p. 4
“For FY '26, profit after tax stood at INR57 crores, reflecting a year-on-year growth of 9%.”
Aalok Patel, page 4 of the filed PDF · View the filing
CGFMU portfolio coverage: 90% (FY26)
p. 4
“About 90% of our Microfinance portfolio is now covered under the CGFMU scheme.”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance AUM: INR1,999 crores (FY26)
p. 4
“the AUM stood at INR1,999 crores, registering a growth of 19% on a year-on-year basis.”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance disbursements: INR738 crores (Q4 FY26)
p. 4
“Disbursements for Q4 FY '26 stood at INR738 crores, reflecting a growth of 88% year-on-year and 62% sequentially.”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance full year disbursement: INR1,798 crores (FY26)
p. 4
“Business momentum improved significantly during the second half of the year, resulting in a full year disbursement of INR1,798 crores.”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance gross total income: INR117 crores (Q4 FY26)
p. 4
“Gross total income for Q4 FY '26 stood at INR117 crores, while for the full year, it stood at INR433 crores, supported by the improving operating environment and lower impairment cost”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance pre-provisioning operating profit: INR41 crores (Q4 FY26)
p. 4
“pre provisioning operating profit improved to INR41 crores for the quarter and INR143 crores for the full year.”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance PAT: INR29 crores (Q4 FY26)
p. 4
“Profit after tax for Q4 FY '26 stood at INR29 crores, while full year PAT stood at INR13 crores.”
Aalok Patel, page 4 of the filed PDF · View the filing
Microfinance GNPA: 3.4% (FY26)
p. 4
“Our GNPA stood at 3.4%, while our NNPA reduced to 0.95%.”
Aalok Patel, page 4 of the filed PDF · View the filing
Stand-alone AUM: INR730 crores (FY26)
p. 5
“Stand-alone AUM grew by 30% year-on-year to INR730 crores with MSME segment contributing 76% of the overall portfolio, followed by the LAP and 2-wheeler businesses.”
Aalok Patel, page 5 of the filed PDF · View the filing
Stand-alone disbursements: INR213 crores (Q4 FY26)
p. 5
“Disbursement momentum across all segments has remained healthy with quarterly disbursement standing at INR213 crores, while full year disbursement stood at INR636 crores.”
Aalok Patel, page 5 of the filed PDF · View the filing
Collection efficiency: above 96% (Q4 FY26)
p. 5
“In Q4 '26, collection efficiency for all segments stood above 96% and while zero bucket or x-bucket collections were 99.5% plus for the whole quarter, reflecting delinquencies returning back to normal pre-cycle levels.”
Aalok Patel, page 5 of the filed PDF · View the filing
Capital adequacy ratio - Namra: 27.86% (as of March 31, 2026)
p. 5
“the company continues to remain well capitalized with capital adequacy ratio of 27.86% for the subsidiary namra financeand 41% for the stand-alone business as of 31st March 2026.”
Aalok Patel, page 5 of the filed PDF · View the filing
Available liquidity: INR229 crores (as of March 2026)
p. 5
“The company continues to maintain a healthy liquidity profile with available liquidity of INR229 crores, comprising of cash bank balances, liquid investments, undrawn CCs, FDOD limits, etcetera.”
Aalok Patel, page 5 of the filed PDF · View the filing
Undrawn sanctions: INR275 crores (as of March 2026)
p. 5
“In addition, we have undrawn sanctions of INR275 crores from existing lenders as of March end, providing adequate financial flexibility to support future business growth.”
Aalok Patel, page 5 of the filed PDF · View the filing
Average cost of borrowing: approximately 12%
p. 6
“Average cost of borrowing continues to be approximately 12%.”
Vivek Modi, page 6 of the filed PDF · View the filing
LAP GNPA: 0.74%
p. 12
“So probably 4 or 5 cases there seems.”
Vivek Modi, page 12 of the filed PDF · View the filing
Provision coverage ratio: about 92%
p. 17
“A simple answer our provision coverage ratio on an asset, provision coverage ratio is about 92%.”
Vivek Modi, page 17 of the filed PDF · View the filing
Digital collections: 35%
p. 19
“The digital itself has moved to about 35%.”
Vivek Modi, page 19 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Opex to assets ratio — around 7% · FY27
stated firmly by Aalok Patel
p. 8
“This year, we are probably targeting to bring it around 7%-odd. That is the target that we have set ourselves. So from 9% to 7%.”
Aalok Patel, page 8 of the filed PDF · View the filing
ROA — 3.5%, 4% plus · FY27
stated conditionally by Aalok Patel
p. 7
“definitely 3.5%, 4% plus is sort of easy to expect, all things considered, if our growth trajectory remains consistent.”
Aalok Patel, page 7 of the filed PDF · View the filing
LAP growth — 20%, 25% · FY27
stated as an aspiration by Aalok Patel
p. 8
“So definitely, we can expect it to grow by 20%, 25%, but not like a huge jump or anything like that.”
Aalok Patel, page 8 of the filed PDF · View the filing
MSME growth — around 25% · FY27
stated as an aspiration by Aalok Patel
p. 8
“And MSME as well, we are targeting somewhere around 25%-odd growth in FY27.”
Aalok Patel, page 8 of the filed PDF · View the filing
Credit cost — ballpark 3% · FY27
stated conditionally by Aalok Patel
p. 11
“I think that's a ballpark a good number of 3%. Yes, I think we should be able to pull that off.”
Aalok Patel, page 11 of the filed PDF · View the filing
Consolidated opex to assets — 7% · medium term
stated as an aspiration by Aalok Patel
p. 12
“But 6% is definitely achievable in the medium term for this year, probably around 7% sounds like a good figure, achievable figure.”
Aalok Patel, page 12 of the filed PDF · View the filing
LAP portfolio credit cost — probably 2%
stated as an aspiration by Aalok Patel
p. 12
“probably 2% is something that good long-term number that we should be happy with.”
Aalok Patel, page 12 of the filed PDF · View the filing
Peak profitability — FY27
stated as an aspiration by Aalok Patel
p. 8
“Unlikely, but we'll get it close.”
Aalok Patel, page 8 of the filed PDF · View the filing
Consolidated AUM aspiration — INR5,000 crores · next 18 to 24 months
stated as an aspiration by Aalok Patel
p. 16
“That aspiration amount still remains, but when and how we achieve it in the...”
Aalok Patel, page 16 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said marginal borrowing costs have been declining and average cost stood near 12%, with some risk from rising MCLR but offset by improved portfolio performance.
Answered by Vivek Modi
Asked by Rohan Mehta: What is the outlook for cost of borrowing and NIM in FY27 given fixed-rate exposure?
p. 6
“Average cost of borrowing continues to be approximately 12%. While the marginal cost in the past 2 quarters would have been 11.75%.”
Vivek Modi, page 6 of the filed PDF · View the filing
Management said costs are currently elevated near 9% due to added recovery and credit staff, and targeted bringing this down to around 7% this year.
Answered by Aalok Patel
Asked by Ronak Chheda: How should investors think about cost-to-asset ratio and its steady-state level?
p. 8
“This year, we are probably targeting to bring it around 7%-odd. That is the target that we have set ourselves. So from 9% to 7%.”
Aalok Patel, page 8 of the filed PDF · View the filing
Management said this was uncertain but they would try to get close to peak profitability.
Answered by Aalok Patel
Asked by Ronak Chheda: Can FY27 profitability exceed the prior peak given AUM has already crossed its peak?
p. 8
“Unlikely, but we'll get it close.”
Aalok Patel, page 8 of the filed PDF · View the filing
Management said write-back collections are fairly good and flow rates into higher buckets are lower.
Answered by Vivek Modi
Asked by Srinath V: Are collections in delayed buckets improving, and could write-backs occur as older NPAs are collected?
p. 9
“So flow order rates are lower if that is your question, yes.”
Vivek Modi, page 9 of the filed PDF · View the filing
Management explained classification depends on whether the loan meets RBI's qualifying asset criteria for microfinance versus retail loans.
Answered by Aalok Patel
Asked by Bhumin Shah: Do MFIN guardrails apply to individual micro loans being scaled up?
p. 10
“It depends on customer profile. If it's a true micro customer, which means its meeting the criteria RBI as a qualifying asset then that automatically becomes a microfinance loan and therefore MFIN guardrails is applied following.”
Aalok Patel, page 10 of the filed PDF · View the filing
Management attributed the rise to lower staging of remaining NPAs after heavy prior write-offs and said credit cost depends on multiple factors including CGFMU coverage and provision reversals.
Answered by Vivek Modi
Asked by Jaiprakash Kumhar: Why is NNPA rising quarter-on-quarter and is more provisioning needed ahead?
p. 15
“whatever NPA actually sits on the books might be of lower staging leading to a lower provisioning requirement based on the expected loss on those states. Hence, a bit of increase rate.”
Vivek Modi, page 15 of the filed PDF · View the filing
Management confirmed CGFMU provides a risk hedge covering about 72% but noted gross NPA could still rise since write-offs cannot occur until claims are filed.
Answered by Aalok Patel
Asked by Prit Nagersheth: Does CGFMU coverage limit the impact of any future asset quality deterioration?
p. 14
“Absolutely. Yes. Correct. As long as you get the claims, it should cover about 72%. So yes, that risk hedge is always there in the form of CGFMU.”
Aalok Patel, page 14 of the filed PDF · View the filing
Management said competition in individual MSME and small-ticket LAP loans has increased as diversifying players enter those segments, while some MFI competitors face liquidity or capital issues.
Answered by Aalok Patel
Asked by Vinay Ambekar: What is the competitive landscape in MFI and LAP currently?
p. 17
“So, in that sense, there was much increased competition in the sort of individual MSME small ticket loans that everybody seems to be doing now calling in different names, but in a sense, it remains a similar product.”
Aalok Patel, page 17 of the filed PDF · View the filing
Risks flagged
Global uncertainty including West Asia conflict disrupting the operating environment
p. 3
“there continues to be global uncertainty including disruptions caused by the West Asia conflict.”
Aalok Patel, page 3 of the filed PDF · View the filing
Domestic economic stress in pockets of the economy
p. 3
“Domestic stress in pockets of the economy persist and there continues to be global uncertainty including disruptions caused by the West Asia conflict.”
Aalok Patel, page 3 of the filed PDF · View the filing
Elevated rejection rates from tighter underwriting reducing disbursement volumes
p. 4
“the rejection rates continue to remain elevated, our quality of the disburse portfolio has improved significantly.”
Aalok Patel, page 4 of the filed PDF · View the filing
Rising operating costs from the new credit and recovery model
p. 4
“the new credit model requires a larger team for detailed underwriting and better monitoring capabilities.”
Aalok Patel, page 4 of the filed PDF · View the filing
Possible rise in MCLR and interest rate stress affecting borrowing costs
p. 6
“I think it that will really start happening in a bigger way. We can say that we're not completely insulated on that.”
Vivek Modi, page 6 of the filed PDF · View the filing
Increased competition in secured LAP lending from NBFCs and MFIs entering the product
p. 10
“a lot of NBFCs are coming to this product. A lot of the MFIs are also trying to come into this product.”
Aalok Patel, page 10 of the filed PDF · View the filing
Uncertain ground-level conditions affecting growth pace
p. 8
“there's a lot of questions, there are a lot of uncertainties.”
Aalok Patel, page 8 of the filed PDF · View the filing
Gross NPA may rise mechanically due to CGFMU claim-filing timing constraints
p. 14
“actually, the percent NPA should increase because until you file the claim, you're not allowed to write it off.”
Aalok Patel, page 14 of the filed PDF · View the filing
High employee attrition making culture harder to maintain
p. 20
“it becomes more and more difficult to maintain with such high attrition because it doesn't a chance to permeate.”
Aalok Patel, page 20 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.