SBFC Finance Q3 FY26 Earnings Call Transcript Released

SBFC Finance Limited has released the transcript of its Earnings Conference Call held on January 24, 2026. The call featured insights from MD & CEO Mr. Aseem Dhru, Executive Director Mr. Mahesh Dayani, Chief Finance Officer Mr. Narayan Barasia, and other senior management. Mr. Dhru discussed macroeconomic trends, including concerns about rising household debt and potential interest rate hardening. He also highlighted positive factors like the wealth effect from gold prices at the lower pyramid and stable oil prices. The company reported a "nothing-to-report" quarter with AUM growth on track to end the fiscal year at 5%-7% quarter-on-quarter, a 50 basis points reduction in operating cost, and credit cost within a 5-10 basis point variation.

During the call, a significant leadership transition was announced: Mr. Aseem Dhru will transition to the role of Non-Executive Vice Chairman, and Mr. Mahesh Dayani will take over as MD & CEO. Mr. Dhru expressed confidence in a smooth succession.

Financially, as of December 31, 2025, SBFC's Assets Under Management (AUM) stood at ₹10,478 crores, a 29% year-on-year growth. MSME AUM constituted 81% of the total at ₹8,497 crores, while loan against gold was ₹1,954 crores (19% of AUM). The yield for the quarter was 17.78%, with a cost of borrowing at 8.74%, resulting in a spread of 9.04%. Operating expenses (opex) continued to improve. Gross Non-Performing Assets (GNPA) remained stable at 2.71% with a Provision Coverage Ratio (PCR) of 46.2% and a credit cost of 1.29%. Capital Adequacy Ratio was strong at 31.7%. Profit After Tax (PAT) for the quarter was ₹118 crores, a 34% year-on-year increase.

Management addressed questions regarding a decline in disbursement volumes, attributing it to cautious filtering in Southern and Eastern markets due to bureau score concerns. They clarified that employee count has increased, not decreased, and hiring will align with business growth. The resignation of the Chief Collection Officer was also discussed, with a new officer expected by April and no anticipated disruption due to a strong internal structure. Discussions also covered the impact of the new wage code (₹2.24 crores), efforts to improve operating efficiency, and a target of 15% Return on Equity (ROE). The company aims to maintain its net interest margin by focusing on spreads and managing credit costs, with plans for liability diversification. The gold loan AUM is expected to remain under 20%, despite current growth. Management reiterated the 5%-7% AUM growth guidance for the fiscal year and will provide FY27 guidance in April.