Arman Financial Services (ARMANFIN) Q4 24/25 earnings summary

Executive summary

• FY25 was marked by significant stress in the microfinance sector, leading to a sharp decline in profitability and asset growth, with AUM down 15% YoY to INR 2,245 crore and disbursements down 25% to INR 1,713 crore.

• Profit after tax dropped sharply to INR 52 crore from INR 174 crore in FY24, reflecting higher provisions and write-offs.

• Standalone segments (MSME, Micro LAP, Two-Wheeler) showed resilience and growth, offsetting some microfinance pressures.

• Collection efficiency remained stable at 95.3% for FY25, with an active customer base of ~7.2 lakh.

• Audited standalone and consolidated financial results for the year ended March 31, 2025, were approved and published, with unmodified opinions from statutory auditors.

Financial highlights

• FY25 net profit dropped to INR 7.8 crores for Namra Finance and INR 52 crores consolidated, down 70% YoY, due to INR 264 crore in provisions and write-offs.

• Gross total income for FY25 rose 10% YoY to INR 730 crores; net total income up 24% to INR 491 crores.

• Pre-provision operating profit increased 14% to INR 333 crores.

• Gross NPA improved to 3.37% as of March 2025, net NPA at 0.55% consolidated; cumulative provisions cover 5.23% of consolidated AUM.

• Net worth (consolidated) as of March 31, 2025, stood at ₹87,441.33 lakhs.

Outlook and guidance

• Management remains cautious on near-term growth in the MFI segment, expecting normalization only after sector deleveraging.

• Plans to grow AUM to INR 5,000+ crore by leveraging capital raised and expanding in MFI, MSME, two-wheeler, and LAP segments.

• Strategic focus on increasing MSME share to 35% and reducing MFI to ~60% over time.

• Portfolio stabilization and asset quality improvement are top priorities; growth will be considered once asset quality is satisfactory.