Q1 2027 IndoStar Capital Finance Ltd Earnings Call Transcript
Key Points
- Retail disbursements grew 44% year-on-year to INR1,235 crore, exceeding the 35% CAGR guidance.
- Asset quality improved significantly with early delinquency ratio down to 2.29% from 5.5% and non-starter ratio down to 1.65% from 3.76% year-on-year.
- Micro LAP business scaled rapidly with AUM up nearly 3x year-on-year to INR217 crore, maintaining 99.7% current portfolio and 0.17% 90+ DPD.
- Cost of funds declined by ~80 basis points year-on-year, with further reductions expected as high-cost borrowings mature.
- Capital adequacy ratio remains strong at 34.8%, providing ample headroom for growth.
- Portfolio quality improved with 84% of customers having CIBIL score above 725 and new-to-credit exposure reduced to 4%.
- Disbursement yield improved to 17.6% from 17.4% sequentially, reflecting focus on profitable growth.
- Collection efficiency dipped to around 95% in Q1 FY27, with seasonal uptick in early delinquency and non-starter ratios.
- Vehicle finance AUM growth was muted at 3% sequentially due to tightened underwriting and asset sales.
- Net interest income growth was modest at 2% sequentially, impacted by higher liquidity buffer costs.
- Credit costs remain elevated at INR81.4 crore, with technical write-offs of INR62 crore and continued provisioning.
- Macroeconomic headwinds persist, including El Nino risks, uneven monsoon, and elevated inflation, which could impact demand.
- The old book (pre-Jan 2025) still contributes 80% of NPAs, and meaningful improvement in headline GNPA/NNPA is expected only over the next 2-3 quarters.
- The company maintains an excess liquidity buffer of INR529 crore, which adds a negative carry of INR8 crore during the quarter.
Ladies and Gentlemen, Good day and welcome to Industar Capital Finance Limited Q1 FY27 Earnings Conference Call hosted by MUFG Intime.
(Operator Instructions)
Thank you. Good afternoon, everyone. I welcome you all to the Q1 FY27 earnings conference call for Indostar Capital Finance Limited. To discuss this quarter's performance, we have from the management Mr. Randhir Singh, Managing Director and Executive Vice Chairman, and Mr. Jayesh Jain, Chief Financial Officer. Before we proceed with the call, I would like to mention that some of the statements made in today's call may be forward-looking and may involve risks and uncertainties. For more details, kindly refer to the investor presentation and other filings that can be found on the company's website. Without further ado, I would like to hand over the call to the management for their opening remarks and then we can open the floor for Q&A.
Thank you and over to you, sir.
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