Arman Financial Services Ltd

Financial Performance

• Consolidated AUM: INR 2,925 crores as of June 2026, +36% YoY.
• Quarter disbursements: INR 686 crores, +76% YoY; highest first-quarter disbursements.
• Gross total income: INR 202 crores; +34% YoY, +15% QoQ.
• Net total income: INR 138 crores; PPOP: INR 77 crores.
• PAT: INR 45 crores; vs loss of INR 15 crores in Q1 FY26.
• NIM: 17.4%; ROE: 18.9% annualized.
• Cost-to-income: 44.3% (improved from 51.7% in Q4 FY26).
• CGFMU coverage: ~94% of eligible microfinance portfolio as of 30 Jun 2026.
• Standalone AUM: INR 758 crores; +26% YoY, +4% QoQ.
• Namra AUM: INR 2,167 crores; +39% YoY, +8% QoQ.
• Consolidated equity: INR 979 crores; Liquidity: INR 286 crores; undrawn sanctions: INR 335 crores.
• Share of individual loans in microfinance: 33% of total book.
• Namra NIM: 15.37%; Namra GNPA: 2.59%.

Asset Quality

• GNPA 2.76%; NNPA 0.84%; early delinquencies ~99.5% zero DPD flow forwards.
• Independent credit structure; stronger origination, dedicated collections; higher near-term opex.
• CGFMU protection; not a substitute for underwriting; first line remains selection and collections.

Segment Highlights

• Standalone AUM 758 crores; MSME disbursements 156 crores.
• Namra AUM 2,167 crores; disbursements 530 crores.
• Namra NIM 15.37%; GNPA 2.59%; AUM mix supports overall profitability.

Liquidity and Capital

• Consolidated equity: INR 979 crores.
• Standalone 33.6% capital adequacy; Namra 38.8%.
• Liquidity: INR 286 crores cash/liq; undrawn CC limits; INR 335 crores undrawn sanctions.

Outlook and Guidance

• FY27: growth to be careful, calibrated, and quality-driven.
• Credit cost around 3%–3.5%; CGFMU inclusion 2.5%; potentially 2% if lucky.
• Disbursement capacity supports INR 700–750 crores per quarter.
• July collections marginally lower than June; no material stress yet.
• Individual loans outperform JLG; 68–70% eNACH/UPI; ~85% cashless.

Meeting Details

• Date and time: August 13, 2026 at 04:30 PM IST.
• Type/Mode: Conference call with Analysts/Investors; virtual teleconference.

Participants

• Key company participants: Company Secretary & Chief Compliance Officer.

Purpose

• Discuss quarterly results for quarter ended June 30, 2026.

Additional Notes

• Audio recording of the conference call uploaded on the company website.

Business Overview

• Diversified NBFC targeting rural and semi-urban retail lending.
• Core segments include microfinance, MSME loans, two-wheeler finance, and LAP.
• Namra Finance is the wholly owned microfinance subsidiary.
• Strong growth with FY16–26 AUM CAGR ~32% and NII ~33%.
• Balance sheet shows healthy capitalization with debt/equity 1.8x as of Jun-26.

Key Operational Highlights

• Q1FY27 consolidated income from operations: INR 201.8 Cr.
• NTI: INR 137.5 Cr; PAT: INR 45.2 Cr.
• Namra NTI: INR 91.5 Cr; PAT: INR 29.6 Cr.
• Total AUM: INR 2,925 Cr across segments.
• JLG AUM: INR 1,203 Cr; Individual loans: 964 Cr.
• MSME AUM: 573 Cr; LAP 90 Cr; 2W 93 Cr; Solar 2 Cr.

Financial Performance

• Profit Before Tax: INR 57.2 Cr; PAT: INR 45.2 Cr.
• Gross Total Income: INR 201.8 Cr; YoY +34%.
• Pre-Provision Operating Profit: INR 76.7 Cr; YoY +39%.
• Total Assets: INR 3,036.3 Cr; Shareholders' Funds: 978.9 Cr.
• Borrowings: INR 1,098.1 Cr; Debt Securities: 856.2 Cr.
• Undrawn sanctions: INR 335 Cr; Collections: 96.8% (Jun-2026).

Capital Structure & Liquidity

• Total borrowings: INR 1,098.1 Cr; Debt securities: 856.2 Cr.
• Cash & cash equivalents: 107.8 Cr; Bank balances: 297.8 Cr.
• Total assets: 3,036.3 Cr; Equity funds: 978.9 Cr.
• Undrawn sanctions: 335 Cr; D/E ratio: 1.8x as of 30 Jun 2026.

Strategic Priorities & Outlook

• Aim SME book to 35% and MFI ~60% of AUM; growth-focused mix.
• Target 5–6% post-tax ROA; disciplined risk discipline.

Strategic Initiatives & Digital & Growth

• Digital underwriting with 4D verification, OCR, and e-signing.
• Namra Suvidha app to enhance customer engagement and loan management.
• Geographic expansion: LAP growth into Telangana and MP; 11-state footprint.

Risks & Mitigation

• Risks include earnings volatility, growth management, competition, policy/regulatory changes.
• Mitigation: conservative underwriting, in-house credit appraisal, disciplined collections.

Governance & Leadership

• Chairman: Alok N. Prasad; Executive Director & Group CFO: Vivek Modi.
• Credit ratings reaffirmations: ACUITE A- (Stable); CARE MFI-1 for Namra.

Overview & Key Metrics

• Q1 FY27 unaudited results approved; quarter ended 30 June 2026.
• Consolidated AUM at ₹2,925 crore, highest-ever.
• Disbursements in Q1 FY27 ₹686 crore, up 76% YoY.

Financial Highlights

• Net Total Income ₹138 crore; PPoP ₹77 crore.
• PAT ₹45 crore; QoQ +10% from ₹41 crore in Q4 FY26.
• Shareholders' equity ₹979 crore.

Leverage & Liquidity

• Total borrowings ₹2,403 crore; mix: banks 29.1%, NBFCs/FIs 15.7%, NCDs 35.7%, direct assignments 18.2%.
• Liquidity: ₹286 crore cash/bank; ₹335 crore undrawn sanctions.

Collections & Asset Quality

• Quarter collection efficiency 96.6%.
• GNPA 2.76%; NNPA 0.84%; provisions ₹72 crore.
• CGFMU coverage 94.16% of microfinance portfolio.

Standalone Segment Highlights

• Standalone AUM ₹758 crore; MSME ₹573 crore; Two-Wheeler ₹93 crore; LAP ₹90 crore.
• Q1 standalone disbursements ₹156 crore.
• Standalone net total income ₹46 crore; PAT ₹15 crore; PPoP ₹24 crore.

Namra Microfinance Highlights

• Namra AUM ₹2,167 crore; YoY +39.4%.
• Q1 disbursements ₹530 crore.
• PAT ₹30 crore; ECL provisions ₹43 crore; write-off ₹20 crore.
• Active MFI customers ~4.9 lakh.
• GNPA 2.59%; NNPA 0.89%; CAR 38.83%.

Capital Adequacy

• Arman CAR 33.57%; Namra CAR 38.83%.

Management Commentary & Outlook

• Q1 FY27 encouraging start; collections stable; delinquencies moderated.
• Growth to be careful and calibrated with portfolio quality focus.
• CGFMU coverage at 94.16% enhances credit risk protection.

Fundraising and deviation status

• No Non-Convertible Securities issued in the period.
• No issue proceeds raised or available for utilization.
• Deviation in use of funds: Not Applicable.
• Mode of fund raising: Not Applicable.
• Amount raised: Not Applicable.
• Utilisation status: Not Applicable; no funds raised.
• Audit committee comments: Not Applicable.
• Auditors' comments: Not Applicable.
• Monitoring involvement: Not Applicable.

Asset Cover Details

• NCDs are fully secured by an exclusive charge over book debts.

Board actions

• Board approved unaudited standalone and consolidated results for quarter ended 30 June 2026 with limited review.
• Pushpendrakumar appointed Head - Internal Audit with effect from 12 August 2026; previously Interim Head.

ESOP grant

• ESOP grant: 3600 options at ₹500 per share; vest over 4 years.
• Vesting: 10%, 20%, 30%, 40% over years 1–4; exercisable within two years of vesting.

Consolidated results

• Consolidated Q1 FY2026: total revenue from operations ₹20,177.79 lakh; total income ₹20,181.69 lakh.
• Consolidated PAT ₹4,517.15 lakh; basic EPS ₹42.96; diluted EPS ₹42.69.

Standalone results

• Standalone Q1 FY2026: revenue from operations ₹6,587.24 lakh; total income ₹6,595.96 lakh.
• Standalone PAT ₹1,459.09 lakh; basic EPS ₹13.88; diluted EPS ₹13.79.

RBI loan transfers

• Loans transferred under RBI master direction: 16,193 loans; book value ₹11,762.21 lakh; sale consideration ₹11,506.59 lakh.
• No NPAs transferred; no loan acquisitions or stressed assets.

Meeting Details

• 14 August 2026, 10:00 am onwards.
• One-on-one and group meeting; physical in Mumbai.
• Organizer: Equirus Annual India Conference.
• Attendees: company officials (management).

Participants

• Company management representatives to attend the meetings.

Purpose

• Discussions will be based on publicly available information; no UPSI intended.

Additional Notes

• Schedule subject to change due to exigencies.

Meeting Details

• Date and time: 13 August 2026 at 4:30 PM IST.
• Conference call; group, virtual.
• Organised by Equirus Securities for Arman Financial.

Participants

• Managing Director & Vice Chairman; Executive Director & Group CFO.

Purpose

• Discuss unaudited Q1 FY27 results for quarter ended June 30, 2026.

Additional Notes

• No recording, transcript, or presentation availability noted.