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Informist, Thursday, Jul. 23, 2026

 

By Kabir Sharma

 

MUMBAI – SBFC Finance is expected to report another strong quarter for Apr-Jun, supported by robust loan growth, resilient margins, and stable asset quality. Estimates from brokerages indicate net interest income could rise around 25.6% year-on-year, while net profit is expected to grow nearly 27%, driven by continued expansion in its secured micro, small, and medium enterprises lending portfolio and disciplined underwriting.

 

The average of estimates from ICICI Securities Ltd., JM Financial Institutional Securities Pvt Ltd. and Kotak Securities Ltd. points to net interest income of INR 2.89 billion, up 25.6% on year and 4.9% sequentially. The net profit is expected at INR 1.28 billion, representing a 26.6% year-on-year and 4.1% quarter-on-quarter growth. SBFC Finance is scheduled to declare its earnings Saturday.

 

Among the brokerages, JM Financial has the highest estimates for both key earnings metrics, projecting net interest income of INR 2.95 billion and net profit of INR 1.29 billion. Kotak Securities has the most conservative estimates of net interest income of INR 2.79 billion and net profit of INR 1.248 billion. Meanwhile, ICICI Securities expects net interest income at INR 2.92 billion and net profit at INR 1.291 billion.

 

SBFC Finance's net profit for the March quarter had jumped a shade over 30% on year to INR 1.23 billion. Revenue from operations for the quarter had jumped nearly 26% to INR 4.54 billion.

 

The key driver for the June quarter is likely to remain strong credit demand from the micro, small and medium enterprise segment, where SBFC Finance has built a niche through secured business loans. Brokerages expect the lender to continue gaining market share as demand from small businesses remains healthy despite lingering macro uncertainties earlier in the quarter.

 

JM Financial expects SBFC Finance's assets under management to grow about 27% year-on-year and 5.5% sequentially, making it one of the fastest-growing MSME-focused lenders under its coverage. The brokerage believes growth will continue to be supported by strong disbursement momentum and sustained demand for loans against property, while profitability should remain broadly stable despite a marginal increase in credit costs. 

 

The broader sector backdrop also appears favourable. ICICI Securities believes fear surrounding the impact of the West Asia conflict, higher fuel prices and tighter liquidity eased considerably through June, with business activity normalising after a temporary slowdown in May.

 

Another important metric for investors will be margins. Funding costs had emerged as a concern earlier in the quarter following tighter liquidity conditions, but brokerages now expect spreads to remain largely stable. ICICI Securities notes that most lenders have successfully capped their cost of funds around March quarter levels, allowing them to preserve spreads even as lending growth remained healthy. The sharp moderation in government bond yields towards the end of the June quarter, and the Reserve Bank of India's forex swap facility are also expected to gradually improve systemic liquidity, providing a supportive funding environment for non-banking financing companies. 

 

For SBFC Finance specifically, investors will closely track whether the company can sustain its strong loan growth without compromising underwriting standards. Stable credit costs have been one of the key strengths of the lender over the past few quarters, and brokerages expect that trend to continue. Although JM Financial expects a marginal increase in credit costs across MSME lenders, it believes net interest margin and profitability should remain broadly stable owing to healthy business growth and operating leverage. 

 

Management commentary on loan demand, particularly in secured MSME financing and loans against property, will be another key focus area. Investors are also expected to seek updates on disbursement momentum, funding costs, competitive intensity and any changes in asset quality trends.

 

All three reports on the company available with Informist have a "buy" recommendation on the stock at an average target price of INR 120 per share. This is 33% higher than the current market price of INR 90.52 as of close on Thursday.

 

The following are the estimates for June quarter earnings for SBFC Finance from three brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerages	Net interest income	Net profit
JM Financial Institutional Securities Pvt Ltd.	2.95	1.29
ICICI Securities Ltd.	2.92	1.29
Kotak Securities Ltd.	2.79	1.25
Average	2.89	1.28

 

End

 

IST, or Indian Standard Time, is five-and-a-half houINR ahead of GMT

 

Edited by Himanshi Gupta

 

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