Arman Financial Services (ARMANFIN) Q3 25/26 earnings summary

Executive summary

• Leadership transition with founder moving to Whole Time Director and new appointments for Vice Chairman/MD and Executive Director/CFO, aiming for continuity and strategic growth.

• Achieved consolidated AUM of INR 2,274 crore in 9MFY26, with 6.8% quarter-on-quarter growth and a diversified retail lending portfolio across microfinance, MSME, two-wheeler, and LAP segments.

• Disbursements reached INR 1,482 crore, up 26.7% year-over-year, with a strong presence in 11 states and approximately 6.2 lakh active customers.

• The company has navigated industry challenges, including over-leveraging, regulatory changes, and macroeconomic pressures, leading to stronger risk management and operational discipline.

• Maintained high collection efficiency at 96% for 9MFY26, reflecting improved borrower repayment behavior and disciplined field execution.

Financial highlights

• Consolidated AUM reached INR 2,274 crore, up 7% sequentially; disbursements rose 30% QoQ to INR 612 crore.

• Income from operations for 9MFY26 was INR 470.3 crore, down 11% year-over-year; profit after tax for Q3FY26 was INR 22.2 crore, a significant turnaround from a loss in Q3FY25.

• Pre-provision operating profit (PPOP) for Q3 FY26 was INR 55 crore; nine-month PPOP at INR 166 crore.

• Impairment costs dropped from INR 76 crore in Q3 FY25 to INR 26 crore in Q3 FY26.

• Cumulative provisions as of December 2025 were INR 74 crore, covering 3.2% of consolidated AUM.

Outlook and guidance

• Management targets calibrated, sustainable growth, emphasizing risk controls and product innovation over aggressive expansion.

• FY27 growth expected at around 25%, with non-JLG and non-MFI products projected to outpace JLG growth.

• Targeting AUM growth to INR 5,000+ crore in the coming quarters, leveraging recent capital raises and diversified lending segments.

• Plans to expand the SME portfolio to 35% of AUM and reduce microfinance share to ~60% over time.

• MSME book growth to remain steady, with new products like micro LAP and solar loans being piloted for future expansion.