India · Delayed Price · Currency is INR Arman Financial Services Earnings Call Transcripts
Fiscal Year 2026
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AUM grew 7% sequentially to INR 2,274 crore, with strong disbursement momentum and improved asset quality. Profitability rebounded, collection efficiency reached 96.3%, and new products like micro LAP and solar loans are being piloted for future growth.
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Asset quality and collection efficiency improved, with impairment costs declining and disbursements rebounding in Q2 FY2026. MSME and LAP segments showed strong growth, while microfinance stabilized. Management remains cautious but optimistic for further recovery and sustainable growth.
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Q1 FY26 saw a consolidated loss due to elevated MFI credit costs, but non-MFI segments posted strong growth and stable asset quality. Management expects MFI recovery in H2 FY26, with ongoing structural reforms and strong capital adequacy supporting future growth.
Fiscal Year 2025
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FY25 saw a sharp decline in microfinance profits and AUM due to rural stress and higher provisioning, while MSME and other segments grew robustly. Asset quality improved, but management remains cautious on near-term MFI growth, focusing on stabilization and operational efficiency.
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AUM and disbursements declined year-on-year due to sector-wide stress, with increased impairment costs and loan write-offs impacting profitability. The company prioritized asset quality, strengthened underwriting, and maintained strong liquidity, while MSME and LAP segments showed resilience.
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Cautious growth and focus on asset quality led to lower disbursements but improved operational efficiency. Rising impairment costs and overleveraging in rural lending impacted profitability, though liquidity remains strong and risk mitigation is prioritized.
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Q1 FY25 saw strong AUM and income growth but a 22% drop in PAT due to higher credit costs and lower yields. Asset quality remains under pressure from over-leveraging and external disruptions, but management expects gradual improvement post-Diwali.