Arman Financial Services LimitedFinancial ServicesARMANFIN
Q1 FY26 earnings callArman Financial Services Limited
Strong quarter of profitability and asset quality improvement, but management remains cautious on the macroeconomic environment and is prioritizing disciplined growth over volumes.
Numbers
| Metric | This quarter | Change | Five-quarter trend |
|---|---|---|---|
| Consolidated AUM | INR 2,925 crores | 36% year-on-year | |
| Consolidated Disbursements | INR 686 crores | 76% year-on-year | |
| Consolidated GNPA | 2.76% | — | |
| Consolidated NNPA | 0.84% | — | |
| PPOP | INR 77 crores | — | |
| PAT | INR 45 crores | — | |
| Cost to Income | 44.3% | — | |
| Collection Efficiency (Overall Q1) | 96.6% | — |
Financials
| Quarter | Revenue | Net profit (PAT) | Basic EPS |
|---|---|---|---|
| Q3 FY25 | ₹164.77 Cr-2.4% YoY-9.2% QoQ | ₹-7.26 CrTurned loss-making YoYTurned loss-making QoQ | ₹-6.94Turned negative YoYTurned negative QoQ |
| Q2 FY25 | ₹181.49 Cr+13.2% YoY-1.6% QoQ | ₹15.27 Cr-62.6% YoY-51.2% QoQ | ₹14.56-69.7% YoY-51.3% QoQ |
| Q1 FY25 | ₹184.43 Cr+23.4% YoY+0.9% QoQ | ₹31.30 Cr-21.6% YoY-38.4% QoQ | ₹29.88-36.5% YoY-42.8% QoQ |
| Q4 FY24 | ₹182.85 Cr+22.5% YoY+8.3% QoQ | ₹50.82 Cr+40.4% YoY+21% QoQ | ₹52.23+22.5% YoY+9.5% QoQ |
| Q3 FY24 | ₹168.76 Cr+66.1% YoY+5.3% QoQ | ₹42.00 Cr+91.1% YoY+2.9% QoQ | ₹47.71+84.4% YoY-0.7% QoQ |
TL;DR
- Consolidated AUM hit a record INR 2,925 crores, up 36% YoY, while disbursements grew 76% YoY to INR 686 crores.
- Asset quality continued to improve, with consolidated GNPA at 2.76% and NNPA at 0.84%.
- PPOP increased to INR 77 crores from INR 59 crores in the prior quarter, with cost-to-income improving to 44.3%.
- PAT stood at INR 45 crores, a sharp turnaround from a loss of INR 15 crores in Q1 FY26.
- Management emphasizes careful, calibrated growth, maintaining high rejection rates, and is watchful of economic uncertainties.
Said on the call
“The improvement that we are seeing should not necessarily be interpreted to mean that the ground level environment has suddenly become easy. A meaningful part of the improvement is because we are selecting better, monitoring better and also collecting better.”
From the Q&A
| Topic | What management said |
|---|---|
| Management Caution | Despite favorable data, management cites 'PTSD' from past cycles and concerns about rural income growth, inflation, and job quality, leading to a cautious stance. |
| Asset Quality Goal | Management avoided giving a specific credit cost target, noting that when cycles shift, problems escalate quickly, and they are focused on avoiding past euphoria-driven growth mistakes. |
| MSME and LAP Portfolio Stress | Marginal stress in the MSME portfolio and a doubling in LAP GNPA are attributed to sectoral issues in Telangana, not a change in competition or collateral quality. |
| JLG vs. Individual Lending | Management believes the JLG model's risk mitigation is no longer sufficient and is transitioning towards individualized credit assessment, noting the individual portfolio is currently performing better. |
| Infrastructure Capacity | Management stated the current infrastructure can support microfinance disbursements of INR 700-750 crores per quarter. |
| LAP Business Challenges | Scaling LAP is difficult due to high competition and a cultural shift from unsecured to secured lending, with the main issue being competition, not infrastructure. |
| Credit Cost Guidance | When pressed, management referenced a prior comment expecting credit costs of 3% to 3.5% but clarified it is not a formal guidance. |
Guidance
- Aim to reduce opex ratio to 7% by end of FY27.
- Continue to recalibrate growth based on collections, early delinquencies, borrower cash flows, and macroeconomic conditions.
- Credit cost may be around 3%, but no formal guidance given.
Source
Summary written from the transcript filed by Arman Financial Services Limited for the call held on 13 Aug 2026; published 20 Aug 2026, 13:16 IST.