SBFC Finance Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript SBFC Finance Ltd filed with BSE on 05 May 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
SBFC Finance reported AUM of Rs 11,270 crores for March 2026, up 29% year-on-year and 8% quarter-on-quarter, with MSME AUM at Rs 8,873 crores and gold loan AUM at Rs 2,374 crores. Full year PAT grew 31% year-on-year to Rs 451 crores, while quarterly PAT was Rs 123 crores, up 30% year-on-year. Management discussed cost of funds, cost of operations and cost of credit trends, an annual refresh of the PD/LGD model for ECL calculation, and branch expansion from 205 to 251 branches during FY26.
Numbers mentioned
AUM: INR 11,270 crores (March 2026)
p. 6
“our AUM for the March '26 is INR 11,270 crores with a growth of 29% on a Y-o-Y basis and 8% on a Q-o-Q basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
MSME AUM: INR 8,873 crores (March 2026)
p. 6
“Our MSME AUM is at INR 8,873 crores, which is 79% of AUM, as Mahesh was talking about, with a growth of 22% on a Y-o-Y basis and 4% on a Q-o-Q basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
Gold loan AUM: INR 2,374 crores (March 2026)
p. 6
“The loan against gold AUM is now INR 2,374 crores, which is 21% of AUM, as Mahesh mentioned, with a growth of 63% on a Y-o-Y basis and 22% on a Q-o-Q basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
Yield: 17.61% (Q4 FY26)
p. 6
“our yields for the quarter is at 17.61%”
Narayan Barasia, page 6 of the filed PDF · View the filing
Cost of borrowing: 8.52% (Q4 FY26)
p. 6
“Our cost of borrowing for the quarter is at 8.52%”
Narayan Barasia, page 6 of the filed PDF · View the filing
Spread: 9.09% (Q4 FY26)
p. 6
“our spreads for the quarter is at 9.09% with a growth of 56 basis points on a Y-o-Y basis and a 5 basis points on a Q-o-Q basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
Opex: 3.93% (Q4 FY26)
p. 6
“our opex for the quarter is 3.93%, which is a 69-basis points reduction on a Y-o-Y basis and almost same as on a Q-o-Q basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
GNPA: 2.61% (Q4 FY26)
p. 6
“our GNPA is at 2.61%, which has seen a reduction of 10 basis points on a Q-o-Q basis and almost 13 basis points on a Y-o-Y basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
PCR: 41.64% (Q4 FY26)
p. 6
“Our PCR stands at 41.64%”
Narayan Barasia, page 6 of the filed PDF · View the filing
Credit cost: 1.38% (Q4 FY26)
p. 6
“Our credit cost for the quarter is 1.38%”
Narayan Barasia, page 6 of the filed PDF · View the filing
Capital adequacy ratio (CRAR): 32.8% (March 2026)
p. 6
“our capital adequacy is sufficient at 32.8%, as Aseem was mentioning, with a tangible net worth of INR 3,465 crores as of March'26”
Narayan Barasia, page 6 of the filed PDF · View the filing
Return on average AUM: 4.57% (Q4 FY26)
p. 6
“Our return on average AUM is 4.57%, with a return on average tangible equity of 14.48% for the quarter”
Narayan Barasia, page 6 of the filed PDF · View the filing
PAT: INR 123 crores (Q4 FY26)
p. 6
“Our PAT for the quarter is INR 123 crores, growing by 30% on a Y-o-Y basis and 4% on a Q-o-Q basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
PAT: INR 451 crores (FY26)
p. 6
“Our PAT for the full year is INR 451 crores, which has grown by 31% on a Y-o-Y basis”
Narayan Barasia, page 6 of the filed PDF · View the filing
Branch count: 251 branches (March 2026)
p. 6
“We added 21 branches during this quarter, bringing the total branch count to 251 as of March 2026”
Narayan Barasia, page 6 of the filed PDF · View the filing
Total provisions to IRAC norms multiple: 1.84%, 2.1x IRAC norms (FY26)
p. 4
“it's just gone up about two basis points to 1.84%, which is 2.1x the IRAC norms that the banks use”
Aseem Dhru, page 4 of the filed PDF · View the filing
PPOP growth: almost 37% (FY26)
p. 5
“our efficiencies came in from finance cost and opex, which ensured that our PPOP grew by almost 37%”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Stage 2 assets: moved from almost 6% to 16% (FY26)
p. 6
“our stage 2 moved up from almost 6% to 16%”
Mahesh Dayani, page 6 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.
Branch network — 275 branches · FY27
stated firmly by Mahesh Dayani
p. 5
“We expect to stabilize at 275 branches during the year, allowing us to consolidate and evaluate the performance of these investments before scaling further.”
Mahesh Dayani, page 5 of the filed PDF · View the filing
AUM growth — 5% to 7% on a quarterly basis · FY27
stated firmly by Mahesh Dayani
p. 5
“Our overall guidance remains unchanged at 5% to 7% on a quarterly basis.”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Gold share of AUM — closer to 25% · FY27
stated conditionally by Mahesh Dayani
p. 5
“Given the firm outlook on gold prices and addition in branches, this share of gold may gradually move closer to 25%.”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Portfolio mix MSME/Gold — 75% and 25% · FY27
stated firmly by Mahesh Dayani
p. 5
“Overall, the portfolio mix between MSME and gold is expected to remain stable between 75% and 25%.”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Spreads — 9% · FY27
stated firmly by Mahesh Dayani
p. 5
“We are expected to hold the spreads at the current level.”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Opex — 20 to 25 basis points · FY27
stated firmly by Mahesh Dayani
p. 5
“our opex is expected to decline by 20 to 25 basis points through the year”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Credit cost — range-bound with marginal benefits of 5 basis points · FY27
stated conditionally by Mahesh Dayani
p. 6
“we are expected to remain range-bound all through the year with some marginal benefits of 5 basis points here or there.”
Mahesh Dayani, page 6 of the filed PDF · View the filing
Co-origination share — 18% to 19% of AUM · FY27
stated firmly by Mahesh Dayani
p. 5
“we are expected to remain at similar levels all through FY27”
Mahesh Dayani, page 5 of the filed PDF · View the filing
AUM growth — double the book · next 3 to 3.5 years
stated as an aspiration by Mahesh Dayani
p. 5
“the segment presents an opportunity to potentially double the book over the next 3 to 3.5 years”
Mahesh Dayani, page 5 of the filed PDF · View the filing
Disbursal run rate — INR 300 crores a month
stated conditionally by Mahesh Dayani
p. 9
“Can we move back to a number of roughly on an average of INR 300 crores a month? The answer is yes.”
Mahesh Dayani, page 9 of the filed PDF · View the filing
Capital sufficiency — sufficient for around 2 years · 2 years
stated conditionally by Sanket Agrawal
p. 12
“So at the moment, I think around 2 years from now is at a minimum that you can use up the capital and accrual of profits.”
Sanket Agrawal, page 12 of the filed PDF · View the filing
1+ delinquency ratio — 7% to 9%
stated firmly by Sanket Agrawal
p. 15
“1+ being in the range of, say, 7% to 9%, the credit cost being in the range right now at, say, 1.2% to 1.4%”
Sanket Agrawal, page 15 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 the company is entering a second phase focused on deepening presence in existing operating states, remaining a direct-sourcing model, and digitizing processes other than customer-facing origination and personal discussions.
Answered by Mahesh Dayani
Asked by Sucrit Patil: What are SBFC's key priorities for expanding lending reach and leveraging digital platforms?
p. 7
“We have, in terms of our acquisition, almost 3/4 of our customers borrow for the first time.”
Mahesh Dayani, page 7 of the filed PDF · View the filing
CFO noted repo rate reductions have helped cost of borrowing, and risk officer described a digitized personal discussion app and branch risk rating system.
Answered by Rajiv Thakker
Asked by Sucrit Patil: How does SBFC manage risks like funding costs, regulatory compliance and credit defaults?
p. 8
“we have digitized the way they do personal discussions. So there is an app which we have which we are using, wherein the customer PDs are done through this app”
Rajiv Thakker, page 8 of the filed PDF · View the filing
Management explained that large upfront investments were already made at state and regional levels, so incremental costs at the front-end are low.
Answered by Mahesh Dayani
Asked by Raghav: How has per-unit opex remained flat despite growth, and can this continue?
p. 8
“the incremental cost is not a significant incremental cost that we have. The incremental cost is fairly to the front-end teams where the unit cost is fairly low”
Mahesh Dayani, page 8 of the filed PDF · View the filing
Management said branch additions were largely gold-driven, and momentum was deliberately paused in some MSME markets due to caution, with capacity to accelerate later.
Answered by Mahesh Dayani
Asked by Raghav: Why is manpower being added while disbursement volumes are declining?
p. 9
“Markets where we are not very confident of, some pockets in South, some pockets in East and some pockets in West, where we are not very confident, we've not shied away those branches, but we've paused the momentum in some of these markets.”
Mahesh Dayani, page 9 of the filed PDF · View the filing
Management said there is sufficient untapped opportunity in existing distribution to achieve growth targets without needing external sourcing channels for at least two years.
Answered by Sanket Agrawal
Asked by Raghav: Will SBFC eventually need to use DSAs or connectors as it scales, given its direct sourcing model?
p. 10
“for at least the next two years, we don't seem to have that need to go and chase growth through other channels”
Sanket Agrawal, page 10 of the filed PDF · View the filing
Management said most gold-related growth has been price-driven rather than volume-driven, and expects gold prices to be range-bound while growth going forward will rely more on branch expansion.
Answered by Mahesh Dayani
Asked by Nischint Chawathe: How sensitive is the growth guidance to gold price movements?
p. 11
“most of the gold growth which has happened, not only for us, but I think across the industry is largely price-driven”
Mahesh Dayani, page 11 of the filed PDF · View the filing
Management said the guidance reflects caution given macro uncertainty around fuel prices and weather, while risk officer noted no stress yet visible from LPG/fertilizer-related sectors based on April numbers.
Answered by Rajeev Thakker
Asked by Nischint Chawathe: Given improving early delinquency numbers, is the credit cost guidance simply cautious?
p. 11
“based on our April numbers, we don't see any stress emanating from whatever sectors which are showing some stress because of the LPG and fertilizers”
Rajeev Thakker, page 11 of the filed PDF · View the filing
Management estimated the company can sustain roughly two years of growth on current capital before needing to raise more.
Answered by Sanket Agrawal
Asked by Nischint Chawathe: How long is current capital sufficient given growth plans?
p. 12
“around 2 years from now is at a minimum that you can use up the capital and accrual of profits”
Sanket Agrawal, page 12 of the filed PDF · View the filing
Management said ROE is treated as an outcome of controlled cost metrics and steady growth rather than a direct target, citing current leverage and ROA levels.
Answered by Sanket Agrawal
Asked by Prithviraj Patil: Is 18% ROE achievable over the next three years and are new products planned?
p. 13
“it will be very optimistic for us to go and say out that we'll reach 18% ROE”
Sanket Agrawal, page 13 of the filed PDF · View the filing
Management said South region disbursals grew softer while West markets compensated, though it offered to verify the specific AUM mix figures offline.
Answered by Mahesh Dayani
Asked by Meghna Luthra: Why did the western region's AUM share jump from 15% to 23% within a quarter?
p. 13
“the disbursals in South and the resulting AUM in South grew a little softer last year, which was more than made up in some of the key markets in West”
Mahesh Dayani, page 13 of the filed PDF · View the filing
Management said there is no additional overlay beyond the annual PD/LGD model refresh reflected in stage-wise provisioning.
Answered by Sanket Agrawal
Asked by Meghna Luthra: Is there any management overlay on provisions above regulatory requirements?
p. 14
“We don't have any additional overlay. It's just the refresh of the model happens in March, and that refresh is reflecting on stage wise provisioning.”
Sanket Agrawal, page 14 of the filed PDF · View the filing
Management said assets facing collection difficulty or high time value of money loss are sold to ARCs under the SARFAESI route, providing a P&L boost when it pays off.
Answered by Sanket Agrawal
Asked by Mihir Shah: How does SBFC decide which loans to sell to ARCs versus collecting itself?
p. 15
“Those asset classes then we lay it out to ARCs at a certain commercials and then see if those recoveries can better happen under the SARFAESI route that they can use.”
Sanket Agrawal, page 15 of the filed PDF · View the filing
Management said rating decisions rest with rating agencies and it would not be appropriate to comment on the outcome.
Answered by Aseem Dhru
Asked by Manav Shah: Can investors expect a credit rating upgrade in coming quarters?
p. 15
“I cannot, I mean, we cannot comment on what is not in our hands.”
Aseem Dhru, page 15 of the filed PDF · View the filing
Risks flagged
Rising fuel-driven inflation due to currency weakening
p. 4
“rising inflation through fuel, an imported one because of a weakening currency, is a certainty”
Aseem Dhru, page 4 of the filed PDF · View the filing
Rising interest rates from demand-supply pressures in the economy
p. 4
“Rising interest rates on sheer demand-supply situation in the economy is a certainty.”
Aseem Dhru, page 4 of the filed PDF · View the filing
Growing fiscal and trade deficits amid oil shock
p. 3
“Growing fiscal deficit plus widening trade deficit, forces of the current oil shock that has constrained supply and materially changes our import bills, forex reserves, and right now widening our fiscal deficit.”
Aseem Dhru, page 3 of the filed PDF · View the filing
Risk to Gulf remittances and Indian IT flows
p. 3
“the Gulf remittances are at risk, and with what's happening with AI, Indian IT flows are at risk, too”
Aseem Dhru, page 3 of the filed PDF · View the filing
Weak monsoon/harsh summer affecting economic performance
p. 3
“The weather gods may be sending an extra harsh summer, as we can already see right now, when followed by an El Nino, which even today our country performance is driven by performance of the southwest monsoon winds.”
Aseem Dhru, page 3 of the filed PDF · View the filing
Softening demand environment as income growth lags
p. 4
“In a softening demand environment due to income growth not keeping pace, I can bet that every company commentary you will read this year will be about squeezing costs.”
Aseem Dhru, page 4 of the filed PDF · View the filing
Household leverage rising in certain states leading to paused growth
p. 10
“we felt that the leverage at a family household level in certain pockets, certain states, have gone up”
Mahesh Dayani, page 10 of the filed PDF · View the filing
Temporary liquidity crisis and G-Sec rate volatility
p. 7
“Obviously, there's a kind of liquidity crisis as of now in the market, but this is very temporary.”
Narayan Barasia, page 7 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.