Indostar Capital Finance Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Indostar Capital Finance Ltd filed with BSE on 05 Aug 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
IndoStar Capital Finance reported Q1 FY27 retail disbursements of Rs 1,235 crore, up 44% year-on-year, with AUM at Rs 8,244 crore, up 6% year-on-year and 2% sequentially. Profit after tax was Rs 11 crore, a recovery from a loss of Rs 424 crore in Q4 FY26 which had included one-time provisioning on security receipts and a management overlay. Management said asset quality metrics such as early delinquency and non-starter ratios improved year-on-year, and that the Micro LAP business grew disbursements 85% year-on-year with AUM increasing to Rs 217 crore.
Numbers mentioned
Retail disbursements: INR1,235 crores (Q1 FY27)
p. 4
“our retail disbursements stood at INR1,235 crores compared to INR1,306 crores in the previous quarter and INR858 crores in the same period last year, reflecting a healthy 44% year-on-year growth”
Randhir Singh, page 4 of the filed PDF · View the filing
AUM: INR8,244 crores (Q1 FY27)
p. 7
“our AUM stood at INR8,244 crores, up 2% sequentially and 6% year-on-year”
Jayesh Jain, page 7 of the filed PDF · View the filing
Profit after tax: INR11 crores (Q1 FY27)
p. 8
“profit after tax for the quarter stood at INR11 crores against a loss of INR424 crores in Q4 FY26”
Jayesh Jain, page 8 of the filed PDF · View the filing
Pre-provision operating profit: INR92.9 crores (Q1 FY27)
p. 8
“the pre-provision operating profit for the quarter stood at INR92.9 crores, largely stable compared to INR93.3 crores in Q4 FY26”
Jayesh Jain, page 8 of the filed PDF · View the filing
Net interest margin: 8.8% (Q1 FY27)
p. 8
“This came mainly from NIM expansion to 8.8% from 6.2% a year ago”
Jayesh Jain, page 8 of the filed PDF · View the filing
Gross Stage 3: 4.84% (Q1 FY27)
p. 7
“Asset quality remained broadly stable with Gross Stage 3 at 4.84% and Net Stage 3 at 2.48%”
Jayesh Jain, page 7 of the filed PDF · View the filing
Micro LAP disbursements: INR50 crores (Q1 FY27)
p. 5
“disbursements stood at INR50 crores, up 85% year-on-year, while AUM increased to INR217 crores, nearly 3x the level a year ago”
Randhir Singh, page 5 of the filed PDF · View the filing
Capital adequacy ratio: 34.8% (Q1 FY27)
p. 8
“Capital adequacy ratio stood at 34.8%, giving us adequate headroom for growth”
Jayesh Jain, page 8 of the filed PDF · View the filing
Disbursement yield: 17.6% (Q1 FY27)
p. 7
“our disbursement yield improved to 17.6% from 17.4% in Q4 FY26”
Jayesh Jain, page 7 of the filed PDF · View the filing
Write-off: INR62 crores (Q1 FY27)
p. 8
“This quarter's charge was largely technical write-off of INR62 crores and normal provision on ECL on NPA and standard asset of INR32.2 crores”
Jayesh Jain, page 8 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.
Disbursement CAGR growth — 35% CAGR · FY27-FY29
stated firmly by Randhir Singh
p. 13
“what we had guided was that we are targeting 35% CAGR disbursement growth over the next 3 years”
Randhir Singh, page 13 of the filed PDF · View the filing
PAT target — INR450 crores to INR500 crores · FY29
stated firmly by Randhir Singh
p. 6
“Moving on to our progress towards FY29 guidance of 35% CAGR growth in disbursements and a target PAT of INR450 crores to INR500 crores.”
Randhir Singh, page 6 of the filed PDF · View the filing
Micro LAP AUM — double · FY27
stated firmly by Randhir Singh
p. 6
“We remain on track to double our Micro LAP AUM during FY27”
Randhir Singh, page 6 of the filed PDF · View the filing
Micro LAP portfolio mix of AUM — 15% to 20% · next 3 to 5 years
stated as an aspiration by Randhir Singh
p. 9
“I think what we're targeting broadly on our AUM mix is about 15% to 20% over next 3 to 5 years for Micro LAP”
Randhir Singh, page 9 of the filed PDF · View the filing
Front-end sales headcount — 50% higher · March 2027 over March 2026
stated firmly by Randhir Singh
p. 6
“our target is to increase it further so that we have about 50% higher sales headcount by March '27 over March '26”
Randhir Singh, page 6 of the filed PDF · View the filing
Branch network — 500 branches · this year
stated firmly by Randhir Singh
p. 6
“We target to cross 500 branches this year”
Randhir Singh, page 6 of the filed PDF · View the filing
Q2 disbursement growth — 35% plus year-on-year · Q2 FY27
stated conditionally by Randhir Singh
p. 12
“I think it's fair to say that we should again have in Q2 a 35% plus kind of disbursement growth”
Randhir Singh, page 12 of the filed PDF · View the filing
New book share of AUM — about 85% · Q4 FY27
stated conditionally by Randhir Singh
p. 5
“the new book percentage should increase to about 85% by Q4 FY27”
Randhir Singh, page 5 of the filed PDF · View the filing
Disbursement yield — 17% plus · next few quarters
stated firmly by Randhir Singh
p. 12
“we do not plan to make any significant changes. We basically historically maintained over the last many quarters, 17% plus, a few percentage basis here and there”
Randhir Singh, page 12 of the filed PDF · View the filing
Cost of borrowing on book — converging towards 9% · by March
stated conditionally by Randhir Singh
p. 14
“This is really one of the last tranche of our high-cost borrowing. So it should be behind us, high cost borrowing of the old book. By March, we should be converging towards 9%.”
Randhir Singh, page 14 of the filed PDF · View the filing
Micro LAP average ticket size — about INR10 lakhs
stated as an aspiration by Randhir Singh
p. 10
“I think you should see us stabilizing around INR10 lakhs, thereabouts”
Randhir Singh, page 10 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 targets Micro LAP reaching 15-20% of AUM mix over the next 3-5 years.
Answered by Randhir Singh
Asked by Rehan Saiyyed: What is the optimal portfolio mix between vehicle finance and Micro LAP over 3-5 years?
p. 9
“I think what we're targeting broadly on our AUM mix is about 15% to 20% over next 3 to 5 years for Micro LAP”
Randhir Singh, page 9 of the filed PDF · View the filing
Management said despite tightening underwriting significantly, the company continued to grow, suggesting the market has enough space.
Answered by Randhir Singh
Asked by Rehan Saiyyed: Are competitors becoming more aggressive on underwriting or pricing in used commercial vehicle financing?
p. 9
“in spite of significantly tightening our underwriting, we still continue to grow”
Randhir Singh, page 9 of the filed PDF · View the filing
Management attributed this to seasonal softness and said improvement continues as the old book runs off.
Answered by Randhir Singh
Asked by Shalin Kapadia: Why did collection efficiency dip this quarter and how is it trending in July?
p. 10
“as of now at the end of June quarter, almost 80% of NPAs pertain to our old book”
Randhir Singh, page 10 of the filed PDF · View the filing
Management said ticket size is being increased consciously to drive AUM growth while maintaining yields, targeting stabilization around Rs 10 lakhs.
Answered by Randhir Singh
Asked by Shalin Kapadia: What is the thinking behind increasing Micro LAP average ticket size and where will it stabilize?
p. 10
“we have increased the ticket size yet still maintaining yields of about 20%”
Randhir Singh, page 10 of the filed PDF · View the filing
Management said competitive intensity remains low in the Tier 3-6 semi-urban and rural areas they operate in.
Answered by Randhir Singh
Asked by Shalin Kapadia: Is there heightened competition in the Rs 8-10 lakh Micro LAP ticket size segment?
p. 11
“the segment that we operate in, there's not been that much of a competition in the last 5 years or so”
Randhir Singh, page 11 of the filed PDF · View the filing
CFO explained the P&L yield decline was a mathematical/denominator effect from higher liquidity buffers, while disbursement yields remained stable.
Answered by Jayesh Jain
Asked by Shalin Kapadia: Why did loan yield decline while NIM expanded this quarter?
p. 11
“16.5% is more of a mathematical thing because of adjustments on the loan book and the total assets, right?”
Jayesh Jain, page 11 of the filed PDF · View the filing
Management said July trends look good and expects 35% plus disbursement growth to continue into Q2.
Answered by Randhir Singh
Asked by Varun Gajaria: How are disbursements shaping up for coming quarters given the macro scenario?
p. 12
“the early trends for July look quite good”
Randhir Singh, page 12 of the filed PDF · View the filing
Management attributed the muted growth to prior underwriting tightening and some direct assignment/asset sale transactions, expecting AUM growth to accelerate as disbursements rise.
Answered by Randhir Singh
Asked by Sohani Singh: Why did vehicle finance AUM grow only 3% sequentially despite a larger branch network?
p. 12
“we had tightened our policy if you have been following us. We tightened our policy significantly from Jan onwards, and there was obviously a dip of significant dip in our disbursements”
Randhir Singh, page 12 of the filed PDF · View the filing
Management reiterated the 35% CAGR disbursement growth target, noting Q1 exceeded it at 44%.
Answered by Randhir Singh
Asked by Sohani Singh: What sustainable growth rate does management believe achievable without compromising underwriting?
p. 13
“we are targeting 35% CAGR disbursement growth over the next 3 years. That was our guidance in the last quarter, and we are taking all the steps to meet those numbers”
Randhir Singh, page 13 of the filed PDF · View the filing
Management said passenger car disbursements have grown to exceed M&HCV disbursements, while M&HCV demand has been muted recently.
Answered by Randhir Singh
Asked by Saumya Rahuvanshi: Which vehicle finance product segments are seeing the strongest demand?
p. 14
“passenger car disbursements in volumes have become higher than M&HCV disburse”
Randhir Singh, page 14 of the filed PDF · View the filing
CFO confirmed last quarter's write-off was much smaller.
Answered by Jayesh Jain
Asked by Rahul Kumar: What was the write-off figure for the prior quarter compared to this quarter's INR62 crores?
p. 14
“We wrote off around INR7.5 crores last quarter.”
Jayesh Jain, page 14 of the filed PDF · View the filing
CFO said the tranche is around Rs 250 crore at about 13% interest, to be repaid in Q2.
Answered by Jayesh Jain
Asked by Rahul Kumar: What proportion of borrowings is the maturing high-cost tranche and when is it repaid?
p. 14
“That's around INR250-odd crores, which is at you can take around 13% interest rate.”
Jayesh Jain, page 14 of the filed PDF · View the filing
Management said historically South was strongest and North/East/West weaker, but region-specific tightening has brought more uniform portfolio quality.
Answered by Randhir Singh
Asked by Raj Patel: What is the regional asset quality trend across the portfolio?
p. 15
“our asset quality has been strongest in the South region. We had much weaker portfolio performance in North and in a few states in East as well as a few states in West”
Randhir Singh, page 15 of the filed PDF · View the filing
Management named specific pockets in Bihar, Jharkhand, Maharashtra and Rajasthan as areas of relatively higher stress.
Answered by Randhir Singh
Asked by Raj Patel: Which geographies show relatively higher credit stress currently?
p. 16
“Generally on the new books, we are largely okay, except for a few pockets, let's say, Bihar, some places in Bihar, a few places in Jharkhand, a little bit in Maharashtra”
Randhir Singh, page 16 of the filed PDF · View the filing
Risks flagged
Global geopolitical uncertainties and uneven monsoon affecting demand
p. 3
“The operating landscape continues to be influenced by global geopolitical uncertainties, concerns around an uneven monsoon, and the potential impact of El Nino”
Randhir Singh, page 3 of the filed PDF · View the filing
Below-normal monsoon due to El Nino impacting kharif sowing and reservoir levels
p. 3
“monsoon rainfall during July is expected to remain below normal due to El Nino conditions, which could impact kharif sowing and reservoir levels in certain regions”
Randhir Singh, page 3 of the filed PDF · View the filing
Elevated energy prices and weather uncertainties as risks to urban and rural demand
p. 3
“global conflicts, elevated energy prices and weather-related uncertainties remain key risks that could impact both urban and rural demand”
Randhir Singh, page 3 of the filed PDF · View the filing
Management overlay maintained against West Asia situation risk
p. 7
“This excess was held as a contingency against the West Asia situation and any likely tightness in the system liquidity”
Jayesh Jain, page 7 of the filed PDF · View the filing
Overlay release depends on macro developments and sustained performance
p. 7
“Any release will depend on sustained portfolio performance, macro developments and our ECL framework”
Jayesh Jain, page 7 of the filed PDF · View the filing
Customers delaying vehicle purchases due to fuel price and availability concerns
p. 14
“we have seen some of our customers delaying the purchases in both the used as well as new, I think, primarily in response to their concern of prices, availability of fuel, etcetera”
Randhir Singh, page 14 of the filed PDF · View the filing
Old loan book continuing to contribute disproportionately to NPAs
p. 5
“almost 80% of our NPAs pertain to the old book before Jan 2025 and fresh addition in NPA in June quarter is almost 70% contributed by the old book”
Randhir Singh, page 5 of the filed PDF · View the filing
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