Finkurve Fin. — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Finkurve Financial Services reported a strong Q3 FY26, with AUM growing 118% YoY to ₹833 crores and PAT increasing 24% YoY. The company expanded its branch network to 98 and maintained NPAs below 2%. Management outlined plans for continued growth, targeting 40-50% AUM expansion and 50-60 new branches in FY26, while acknowledging NIM compression due to current low leverage and high upfront investment costs.

Highlights

  • AUM grew by 118% from ₹381 crores to ₹833 crores, including off-book gold loans.

  • Branch network expanded significantly from 72 to 98 branches.

  • PAT grew by 18% quarter-on-quarter and 24% year-on-year.

  • NPAs were maintained below 2%, significantly better than the industry average of 3%.

  • Company aims for 40-50% AUM growth and 50-60 new branches in FY26, demonstrating strong expansion plans.

Concerns

  • Net Interest Margin (NIM) contracted due to low leverage, currently at 15% but expected to align with industry average of 11-12% as leverage increases.

  • ROE is currently 8-9% and ROA is 3.5-4%, which is lower than desired due to low leverage.

  • OPEX to AUM and cost to income ratios appear high due to upfront investments in branch expansion.

Key financials

  1. AUM ₹833 Cr +118%YoY
  2. Branch Network 98 branches
  3. Income Growth — +31%YoY
  4. PAT Growth — +24%YoY
  5. NPA 2%
  6. ROA 3.5%
  7. ROE 8%
  8. NIM 15%
  9. Leverage 1.67×
  10. Collection Efficiency 94%
  11. ROI (Customer Rate) 19.5%

What they filed

Q4 FY26: revenue up 67.2%, net profit up 105.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue28 32 40 40 40 +40%48 +51%52 +30%67 +67%
EBITDA8 8 12 11 15 +73%16 +93%— —
Net profit4 3 6 4 5 +16%6 +71%7 +24%8 +106%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Branch expansion
    Regarding the CAPEX plan, we have a steady growth in terms of our annual operating plan. Last year, since YTD till date, we have grown around 26 branches till the quarter end, and we continue to grow in the similar fashion, similar phase and the growth will be restricted to profitable growth.
  • Liquidity Liquidity disclosed Cash position has remained strong across quarters with undrawn sanctions as well.
    All our assets that you see are current assets including our entire AUM as we do not have any long-term products. That in a way gives a lot of comfort on the overall current assets ratio and liquidity because we also have a PL portfolio which is a 30-day product, plus our cash position has remained strong across quarters with undrawn sanctions as well, so we do not see that as a challenge for coming quarters as well.

Guidance & targets

AUM Growth

  • AUM Growth AUM Growth · near-term / 1 year · High confidence 40-50%
    But with a bigger base, we will continue to grow somewhere around 40% to 50% growth. We can expect to grow in that range provided all the external factors as well as our internal operating plan stays intact.

    — Naveen Kottala, CEO & Priyank Kothari, Executive Director

Branch Expansion

  • New Branches Branch Expansion · FY26 · High confidence 50-60
    This year our target is to add 50 to 60 branches as per our annual operating plan, but again, it depends on a lot of other external factors.

    — Priyank Kothari, Executive Director

  • Branch Growth Rate Branch Expansion · next 1-1.5 years · High confidence 40-50%
    In terms of branch expansion, we are currently at 100 branches. We will be growing this number by 40% to 50% over the next 1-1.5 years.

    — Naveen Kottala, CEO

Leverage

  • Leverage Ratio Leverage · near future · High confidence 4x
    Our next goal and target is to be at 4x. So, there is significant headroom for us to leverage which will eventually lead to expansion in AUM.

    — Priyank Kothari, Executive Director

Co-lending

  • Co-lending Proportion of AUM Co-lending · next year · Medium confidence 10-15%
    But our target for the next year would be to have a co-lending proportion of anywhere between 10%-15% of the overall AUM.

    — Aakash Jain, CFO

NIM

  • NIM NIM · as leverage increases · Medium confidence 11-12%

    Previously 15% → 11-12%

    And once we are at an industry average leverage of 3x to 4x, you will see we will be somewhere in the industry range of 11% to 12% of NIM.

    — Aakash Jain, CFO

Product Mix

  • PL Product Tenure Product Mix · going-forward basis · High confidence 3-6 month

    Previously 30 days → 3-6 month

    On the going-forward basis, our idea is to move the entire PL book from a short tenure 30 days to a 3 to 6 month sort of a book which fairly spreads across the overall fees income that we earn.

    — Aakash Jain, CFO

What to watch in Q4 FY26

AUM Growth Rate

next quarter / 1 year
Current 118% YoY
Target 40-50% growth

Why it matters

To verify if the company can sustain its targeted growth rate on a larger base.

But with a bigger base, we will continue to grow somewhere around 40% to 50% growth. We can expect to grow in that range provided all the external factors as well as our internal operating plan stays intact.

Risks & concerns

  • NIM compression due to low leverage

    medium

    Current NIM of 15% is higher than industry average but expected to contract to 11-12% as leverage increases from 1.67x to target 3-4x.

    Analyst acknowledged

  • High OPEX to AUM and Cost to Income ratios

    medium

    Ratios appear high due to upfront investments in branch expansion, expected to improve over a five-year horizon.

    Management acknowledged

  • Dependence on external factors for growth

    low

    Growth targets (40-50% AUM, 50-60 branches) are contingent on external factors remaining intact.

    Management acknowledged

Q&A highlights

7 direct
NIM contraction despite maintained collection efficiencies Direct
The contraction in NIM that you see is on account of the operating leverage or the leverage that we are having it on our capital. Previously, our capital base was very good. Our CRAR was above 50% and the leverage was less than 1. Currently, as we speak, year-on-year basis, despite the equity infusion that we have done of Rs. 111 crores in May, our leverage has also grown to 1.67.

Clarifies the reason for NIM compression, linking it to the company's current low leverage and capital structure, and indicates future NIM will align with industry averages as leverage increases.

Asked by Urmish Shah

Incremental tech investment for branch network scale-up Direct
Our tech stack is completely in-house built. Incremental tech cost is not there because the investment in tech is already done. For branch expansion, the incremental tech cost will not be there. However, we keep on investing in risk controls, operating leverage, as well as customer experience. So, those will keep on evolving over the time. But per se, expansion will not lead to an incremental tech cost.

Provides insight into the company's technology strategy, indicating that core tech investments are largely complete and branch expansion will not incur significant incremental tech costs, supporting scalability.

Asked by Suraj Shinde

Sustainability of industry growth and competitive strategy Direct
We always believe in faster service as well as markets where a competition is not able to serve properly. So, two things. The market is largely still unorganized. That shift is happening. It will keep on happening for quite some time in the coming future. Even though there is good competition, we also believe that in this business, more than demand, operational excellence matters, execution capability matters more than the demand factor.

Highlights management's view on the gold loan market's structural evolution and their competitive edge based on operational excellence and customer experience rather than aggressive pricing.

Asked by Rahul Kumawat

Gold AUM growth drivers (price vs. branch/productivity) Direct
To answer you and top to what Naveen said, growth has come from two factors. 50% is, of course, coming from new customers and 50% of the growth has come from price rise also. But price rise is something that we do not factor in our annual operating plans, because that is unknown.

Quantifies the contribution of gold price appreciation to AUM growth (50%) and clarifies that future operating plans are based on customer and branch expansion, not speculative price increases.

Asked by Preesha Shah

Optimal branch footprint and AUM per branch Partial
AUM per branch is not a right metric for a company like us, it is quite young. As the branch matures, your AUM keeps growing. The branches should be well seasoned to compare it with the industry. Our branches will not be more than three years or four. More number of branches will not be on that vintage.

Explains why AUM per branch is not a suitable metric for a young, fast-growing company with many new branches, suggesting investors focus on other metrics until the branch network matures.

Asked by Rohan Mehta

Operating leverage and OPEX to AUM ratio Direct
As your branches mature, you definitely get operating leverage there. And as well as the number of branches are increasing, your fixed cost, as they are not increasing to that proportion of branches increase or AUM growth, so definitely there will be operating leverage kicking in. But to estimate a number around that may not be the right thing to do now. But definitely, as the same branch grows, as well as the number of branches grow, both will give us operating leverage.

Confirms the expectation of operating leverage benefits as branches mature and the network grows, but defers specific quantification due to the company's current growth phase.

Asked by Rohan Mehta

Impact of co-lending on operational workflow Direct
There is no major difference in terms of operations, whether it is co-lending, on-book or off-book. The operations remain same. The only difference is on the finance side and the cost of funds side. As such there is no difference in terms of operations. ... There is no difference in the customer experience. The customer, for him, it does not matter.

Clarifies that co-lending primarily impacts the finance side and cost of funds, with minimal changes to operational workflow or customer experience, indicating a streamlined approach.

Asked by Mandira Agarwal

Optimizing liquidity with current ratio of 2.6 and strong asset cover Direct
All our assets that you see are current assets including our entire AUM as we do not have any long-term products. That in a way gives a lot of comfort on the overall current assets ratio and liquidity because we also have a PL portfolio which is a 30-day product, plus our cash position has remained strong across quarters with undrawn sanctions as well, so we do not see that as a challenge for coming quarters as well.

Reassures on liquidity position, citing the short-term nature of assets (30-day PL product), strong cash position, and undrawn sanctions as sufficient buffers.

Asked by Mandira Agarwal

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Finkurve Financial Services reported robust growth in Q3 FY26, with Assets Under Management (AUM) increasing by 118% year-on-year, reaching ₹833 crores from ₹381 crores. The company's branch network expanded significantly from 72 to 98 branches. Profit After Tax (PAT) demonstrated strong performance, growing by 18% quarter-on-quarter and 24% year-on-year, while overall income grew by 31% year-on-year. Asset quality remained strong with Non-Performing Assets (NPAs) maintained below 2%, outperforming the industry average of 3%.

Capital Structure and Net Interest Margin (NIM)

The company's current leverage stands at 1.67x, following an equity infusion of ₹111 crores in May. This low leverage has contributed to a higher Net Interest Margin (NIM) of 15% compared to the industry average of 11-12%. Management indicated that as leverage increases towards their target of 3x-4x, NIM is expected to normalize closer to the industry average. Return on Assets (ROA) is currently between 3.5% to 4%, and Return on Equity (ROE) is 8% to 9%, which are areas the company is actively working to improve through increased leverage.

Growth Strategy and Outlook

Finkurve aims for a sustainable AUM growth rate of 40% to 50% going forward, building on its current base. The company plans to add 50 to 60 new branches in FY26, expanding its network by 40% to 50% over the next 1-1.5 years. This growth is expected to be risk-adjusted and focused on profitability, avoiding aggressive pricing or relaxed underwriting. The company emphasizes its commitment to remaining a pure-play gold NBFC, with gold loans consistently forming over 90% of its loan book.

Technology and Operational Efficiency

The company leverages a next-generation, technology-enabled model, with its tech stack built completely in-house. Technology is primarily used for risk control, customer experience, and operating efficiency. Management stated that incremental tech costs for branch expansion are minimal as core investments are already made. AI is being utilized to automate repetitive and manual processes, improving turnaround times and overall efficiency without compromising risk controls.

Asset Quality and Collection Efficiency

Finkurve maintains a strong focus on asset quality, with NPAs consistently below 2%. The average collection efficiency for the quarter was 94%. Management confirmed that there are no significant state-wise trends or difficulties in collection, with business as usual across all states. The company's prudent underwriting and strong credit discipline are key to its operational model.

Co-lending and Funding Mix

The company is exploring co-lending, with a target to achieve a co-lending proportion of 10% to 15% of its overall AUM in the next year. Management clarified that co-lending primarily impacts the finance side and cost of funds, with no major differences in operational workflow or customer experience compared to on-book lending. The funding mix currently consists of a fair blend of banks, financial institutions, and NCDs, with a target ratio of two-thirds to one-third or 60-40 in the coming years.

Product Mix and Revenue Streams

A shift in product strategy was noted regarding the Personal Loan (PL) product. Previously a 30-day high-churn product, it is being transitioned into a 3-6 month EMI-based product. This change is expected to spread out yields and has impacted fee and commission income, which moderated year-on-year. The company's Rate of Interest (ROI) charged to customers remains healthy at around 19.5%.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Financial Services earnings calls