MANBA FINANCE LTD Q2 CONCALL: FY27 & FY28 AUM GROWTH GUIDANCE OF 30–35%, ₹100 CR PROPOSED CAPITAL INFUSION, 25 BPS BORROWING COST REDUCTION EXPECTED & MSME LENDING EXPANSION

• MANAGEMENT REITERATED 30–35% AUM GROWTH GUIDANCE FOR FY27, SUPPORTED BY FESTIVE-SEASON DISBURSEMENTS, GEOGRAPHICAL EXPANSION & NEW LENDING PRODUCTS • MANAGEMENT EXPECTS AUM GROWTH OF APPROXIMATELY 30–35% IN FY28, SUBJECT TO FUNDING AVAILABILITY, CREDIT DEMAND & COLLECTION PERFORMANCE • MANAGEMENT EXPECTS STRONGER AUM ADDITIONS IN H2 FY27, SUPPORTED BY FESTIVE DEMAND & INCREASING CONTRIBUTIONS FROM NEWER GEOGRAPHIES • MANAGEMENT INDICATED APPROXIMATELY ₹120 CR INCREMENTAL AUM FOR OCTOBER 2026 & EXPECTED A SIMILAR ADDITION IN NOVEMBER, SUBJECT TO ACTUAL DISBURSEMENTS & REPAYMENTS • MANAGEMENT TARGETS MSME LOAN AGAINST PROPERTY DISBURSEMENTS OF APPROXIMATELY ₹5 CR PER MONTH BY JANUARY 2027, COMPARED WITH THE CURRENT ₹2–2.5 CR MONTHLY RUN-RATE • MANAGEMENT EXPECTS NEW SMALL BUSINESS LOAN BRANCHES TO CONTRIBUTE APPROXIMATELY ₹3–4 CR IN ADDITIONAL DISBURSEMENTS • MANAGEMENT PLANS TO EXPAND ACTIVE BUSINESS CORRESPONDENT PARTNERS FROM 7 TO APPROXIMATELY 10–12, SUPPORTING DISTRIBUTION & LOAN ORIGINATION • MANAGEMENT EXPECTS A NET REDUCTION OF APPROXIMATELY 25 BPS IN BORROWING COSTS DURING Q3–Q4 FY27, SUPPORTED BY REFINANCING & IMPROVED CREDIT RATING • MANAGEMENT INDICATED NEW BORROWINGS COULD BENEFIT FROM APPROXIMATELY 50–75 BPS LOWER INTEREST RATES FOLLOWING THE CREDIT RATING UPGRADE • MANAGEMENT EXPECTS APPROXIMATELY ₹600 CR OF OLDER HIGHER-COST BORROWINGS TO MATURE OR BE REPAID BY MARCH 2027, SUPPORTING FUNDING COST OPTIMIZATION • MANAGEMENT EXPECTS THE PROPOSED ₹100 CR EQUITY & WARRANT INFUSION, TOGETHER WITH RETAINED EARNINGS, TO SUPPORT APPROXIMATELY 4–6 QUARTERS OF PLANNED BUSINESS GROWTH • MANAGEMENT INDICATED THE PROPOSED ₹100 CR FUNDRAISE WAS EXPECTED TO BE MOBILIZED AROUND 6 NOVEMBER 2026, SUBJECT TO COMPLETION OF THE CAPITAL-RAISING PROCESS • MANAGEMENT CLARIFIED THAT THE REPORTED 24.69% CAPITAL ADEQUACY RATIO EXCLUDES THE PROPOSED ₹100 CR CAPITAL INFUSION • MANAGEMENT TARGETS SAME-DAY LOAN DISBURSEMENTS BY THE END OF FY27, COMPARED WITH THE CURRENT PROCESSING TIME OF APPROXIMATELY 1.5–2 DAYS • MANAGEMENT EXPECTS TECHNOLOGY AUTOMATION & FASTER CREDIT PROCESSING TO SUPPORT OPERATING EFFICIENCY AS THE BRANCH NETWORK EXPANDS • MANAGEMENT PLANS TO INCREASE CONTRIBUTIONS FROM KARNATAKA, MADHYA PRADESH & UTTAR PRADESH AS NEWER BRANCHES & DEALER NETWORKS MATURE • MANAGEMENT INTENDS TO DIVERSIFY GRADUALLY INTO USED TWO-WHEELER FINANCE, MSME LOANS, SMALL BUSINESS LOANS & TOP-UP PRODUCTS WHILE MAINTAINING DISCIPLINED UNDERWRITING • MANAGEMENT INDICATED USED TWO-WHEELER LOANS GENERATE APPROXIMATELY 27–28% YIELDS, WHILE TOP-UP LOANS OFFER AROUND 32% IRR • MANAGEMENT INDICATED SMALL BUSINESS LOANS GENERATE APPROXIMATELY 27–28% YIELDS, WITH REPORTED PRODUCT NPAS OF AROUND 3–4% • MANAGEMENT PLANS TO SCALE UNSECURED PERSONAL LOANS CAUTIOUSLY, GIVEN THEIR HIGHER CREDIT RISK COMPARED WITH VEHICLE-BACKED FINANCING • MANAGEMENT PLANS TO EVALUATE EV BATTERY REPLACEMENT LOANS FOR APPROXIMATELY 18 MONTHS BEFORE CONSIDERING A LARGER ROLLOUT • MANAGEMENT DID NOT PROVIDE FIRM NUMERICAL FY27 PAT, NET INTEREST MARGIN OR RETURN-ON-EQUITY GUIDANCE • Q2 FY27 NET INTEREST INCOME INCREASED 40% YOY TO ₹52 CR, SUPPORTED BY HIGHER LOAN INCOME & IMPROVING FUNDING EFFICIENCY • Q2 PAT INCREASED 20% YOY TO ₹14 CR, REFLECTING HEALTHY EARNINGS GROWTH DESPITE EXPANSION-RELATED OPERATING COSTS • H1 FY27 NET INTEREST INCOME GREW 39% YOY TO ₹94 CR, WHILE PAT INCREASED 28% TO ₹27 CR • AUM REACHED ₹1,811 CR AS OF SEPTEMBER 2026, REPRESENTING 21% YOY GROWTH • Q2 DISBURSEMENTS INCREASED 14.6% YOY TO ₹267 CR, WHILE H1 DISBURSEMENTS GREW 23.9% TO ₹493 CR • MANAGEMENT'S 30–35% FY27 AUM GROWTH GUIDANCE REQUIRES A SIGNIFICANT H2 ACCELERATION RELATIVE TO THE 21% YOY AUM GROWTH REPORTED AT SEPTEMBER-END • GROSS NPA IMPROVED TO 2.96%, WHILE NET NPA STOOD AT 2.19%, REFLECTING BETTER REPORTED ASSET QUALITY • STAGE 1 ASSETS STOOD AT ₹1,710 CR, REPRESENTING APPROXIMATELY 94.44% OF THE TOTAL LOAN PORTFOLIO • STAGE 2 ASSETS STOOD AT ₹47 CR OR 2.60%, WHILE STAGE 3 ASSETS WERE APPROXIMATELY ₹54 CR • EXPECTED CREDIT LOSS PROVISIONS STOOD AT APPROXIMATELY ₹23 CR, COMPARED WITH THE CITED REGULATORY PROVISION REQUIREMENT OF ₹13 CR • MANAGEMENT REPORTED MONTHLY PAYMENT BOUNCE RATES OF APPROXIMATELY 18–20%, WITH AROUND 7–8% OF CUSTOMERS EXPERIENCING RECURRING BOUNCES DURING THEIR LOAN TENURE • MORE THAN 95% OF THE OVERALL LOAN PORTFOLIO REMAINS SECURED, WITH TWO-WHEELER FINANCE CONTINUING AS THE CORE BUSINESS • THE COMPANY OPERATES ACROSS 148 LOCATIONS, MORE THAN 1,900 DEALERS & 7 STATES, SUPPORTING GEOGRAPHICAL DIVERSIFICATION • MANAGEMENT REPORTED MORE THAN 100 DEALERS ONBOARDED IN KARNATAKA WITHIN THE FIRST 60 DAYS OF OPERATIONS • APPROXIMATELY 32,330 NEW CUSTOMERS WERE ADDED DURING Q2, TAKING THE LIVE CUSTOMER BASE ABOVE 2.45 LAKH • CARE RATINGS UPGRADED THE COMPANY'S CREDIT RATING FROM BBB+ POSITIVE TO A− STABLE, SUPPORTING ACCESS TO POTENTIALLY LOWER-COST BORROWINGS • AVERAGE BORROWING COST WAS APPROXIMATELY 10.14%, WITH FUTURE IMPROVEMENT DEPENDENT ON REFINANCING & MARKET INTEREST RATES • LOAN PROCESSING TIME IMPROVED FROM APPROXIMATELY 3.5–4 DAYS TO 1.5–2 DAYS, WHILE MORE THAN 60% OF LOANS WERE SANCTIONED WITHIN ONE MINUTE • APPROXIMATELY 92% OF LOANS WERE SANCTIONED WITHIN ONE DAY, REFLECTING INCREASING AUTOMATION IN CREDIT PROCESSING • KEY RISKS INCLUDE AGGRESSIVE H2 AUM GROWTH REQUIREMENTS, HIGH PAYMENT BOUNCE RATES, NEW-GEOGRAPHY EXECUTION, HIGHER-YIELD PRODUCT CREDIT RISKS & FUNDRAISING COMPLETION • OVERALL OUTLOOK REMAINS POSITIVE, WITH KEY MONITORABLES INCLUDING 30–35% AUM GROWTH DELIVERY, MONTHLY DISBURSEMENT MOMENTUM, ₹100 CR CAPITAL INFUSION COMPLETION, 25 BPS FUNDING COST REDUCTION & STABLE GNPA/NNPA LEVELS

MANBA FINANCE LIMITED

← Back to feed