SBFC Finance (SBFC) Q1 25/26 earnings summary

Executive summary

• Achieved profit after tax of ₹101 crore for the quarter, up 28% year-over-year, marking a significant milestone in quarterly profitability.

• Assets under management (AUM) reached ₹9,351 crore, up 30% year-over-year, with books secured by property and gold.

• Unaudited financial results for the quarter ended June 30, 2025, were approved, showing continued growth in revenue and profitability.

• Branch network expanded by 10 during the quarter, totaling 215 as of June 25, with a focus on small businesses in semi-urban and rural areas.

• Gross NPA stood at 2.78% with a provision coverage ratio of 44.38%.

Financial highlights

• Total income for Q1 FY26 was ₹3,885.42 million, up 30.6% year-over-year.

• Net profit for the quarter was ₹1,008.92 million, up from ₹787.15 million in Q1 FY25.

• Yield for the quarter at 17.99%, with spreads at 8.67%.

• Cost of borrowing reduced to 9.32%, and OpEx at 4.59%, down 25 bps year-over-year.

• Return on average AUM at 4.5%, ROE at 13.5%.

Outlook and guidance

• Targeting 5%-7% quarter-on-quarter AUM growth as business-as-usual.

• Cost of operations expected to reduce by 50 bps over the year.

• Credit cost guidance increased by 15-20 bps for the year, reflecting expected headwinds.

• ROE target remains at 15% over time, with current ROE at 13.5%.

• Focus remains on secured MSME lending in the ₹5 lakh–₹30 lakh segment, a market growing at 24% CAGR.