More Stories

Informist, Saturday, Jul. 25, 2026

 

Please click here to read all liners published on this story

--SBFC Finance: Rate hikes sooner if Brent crude oil remains above $100/bbl 
--CONTEXT: SBFC Finance mgmt's comments in post-earnings call with analysts 
--SBFC Finance: Focused on NIM, spreads, return on assets going forward 
--SBFC Finance: Increase in employee costs on hirings, increments 
--SBFC Finance: Added five new branches in Jun quarter 
--SBFC Finance: To add 10-15 new branches in FY27 
--SBFC Finance: Gold ylds to be rangebound, see marginal but not sharp fall 

 

By J. Navya Sruthi and Meera Nair

 

MUMBAI – SBFC Finance Ltd.'s credit cost for average assets under management is likely to be 1.4-1.5% for at least the next two quarters, the company's management said in a post-earnings call with analysts Saturday. The management said the non-banking finance company will focus on net interest margin, spreads, return on assets, and return on equities going forward.

 

"So we are pencilling in that it (credit cost) will be range-bound in the current range," the management said. "So 1.4%, 1.5%, this is the range that we are looking at for at least the next two quarters." For the June quarter, the non-bank lender's credit cost for average assets under management was 1.45%, up from 1.38% in the March quarter and 1.11% in the year-ago quarter.

 

"...We remain focused on spreads, NIMs (net interest margins), ROAs (return on assets), and ROEs (return on equities), as we believe that consistent profitable growth is our North Star," Aseem Dhru, executive vice-chairman, said. The company's net interest margin for average assets under management was 10.68% as on Jun. 30, up from 10.24% a quarter ago and 10.25% a year ago.

 

SBFC Finance's net profit for the June quarter rose nearly 29% on year to INR 1.30 billion. The lender's interest income for the quarter was INR 4.60 billion, up nearly 30% on year and nearly 9% on quarter. Revenue from operations grew nearly 27% on year to INR 4.91 billion.

 

"Aided by the transmission of repo rate cuts, our cost of funds has come down by about 90 basis points year-on-year," Dhru said. "Cost of operations have been calibrated in a downward sloping curve, and we continue our guidance of a 25 basis-point reduction this year."

 

Talking about the company's total expenses, which rose significantly during the quarter, the management said that was mainly because of a significant increase in employee costs amid increment rollouts and hiring of staff for the five new branches opened during the quarter. The company's total expenses rose to INR 3.17 billion in the June quarter from INR 2.53 billion in the year-ago quarter. Its employee benefit expenses were up over 26% on year at INR 888.64 million.

 

"One, obviously, is the rollout of increment.... The second is that the last (March) quarter, we opened close to 20-25 branches. Again, this (June) quarter, we've added five. So all the employees that we've hired, full-blown cost has come in this quarter," the management said. "What will happen over a period of next nine months is that ... those employees become productive, and we add it to the AUM (assets under management)."

 

After the earlier aggressive expansion and addition of new branches, the company expects to open only 10-15 branches in the financial year 2026-27 (Apr-Mar). As on Jun. 30, its branch count was 256. "We up-fronted a lot of it in the H2 (Oct-Mar) of last year. So we will go slow this year. We will be in the range of 10-15 branches, not beyond that," the management said. 

 

The management expects yields on gold loans to remain rangebound. "My sense is that it's going to be pretty range-bound. I mean, you could see marginal reduction, but not a very sharp fall," Managing Director and Chief Executive Officer Mahesh Dayani said. During the June quarter, yields on gold loans were higher than those on micro, small, and medium enterprise loans, which is the company's key segment.

 

The company's micro, small, and medium enterprises assets under management were at INR 92.71 billion, up 4.5% on quarter. Its micro, small, and medium enterprise loans disbursed during the quarter amounted to INR 8.09 billion, up from INR 7.85 billion in the trailing quarter. The loan-against-gold assets under management were at INR 26.31 billion, up 11% on quarter.

 

Dhru said deposit rates have firmed up and as banks' deposit growth continues to lag lending growth, interest rates in India will have an upward bias. "We could arrive sooner if (Brent) crude (oil price) continues to push $100 (per barrel) and stays above it longer," he said.

 

SBFC Finance announced its results for the June quarter Saturday. Friday, its shares had ended at INR 92.18 apiece on the National Stock Exchange, up nearly 2% from Thursday.  End

 

US$1 = INR 96.56

 

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000  

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.