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    Finkurve Fin.

    508954
    Financial Services·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

    5

    • 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

    3

    • 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.

    What Changed2

    vs Q4 FY26

    Guidance items17 → 7 (-10)Risks discussed2 → 3 (+1)

    Key financials

    Single quarter

    11 metrics
    1. 01AUM₹833 Cr+118%YoY
    2. 02Branch Network98 branches
    3. 03Income Growth—+31%YoY
    4. 04PAT Growth—+24%YoY
    5. 05NPA2%

    Capital allocation

    2
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Liquidity

    Liquidity disclosed

    Cash position has remained strong across quarters with undrawn sanctions as well.

    Guidance & targets

    7
    CategoryTargetPriority
    AUM Growth
    AUM Growth
    40-50%
    		High
    Branch Expansion
    New Branches
    50-60
    		High
    Branch Expansion
    Branch Growth Rate
    40-50%
    		High
    Leverage
    Leverage Ratio
    4x
    		High
    Co-lending
    Co-lending Proportion of AUM
    10-15%
    		Medium
    NIM
    NIM
    11-12%
    		Medium
    Product Mix
    PL Product Tenure
    3-6 month
    		High

    AUM Growth Rate

    next quarter / 1 year
    Current118% YoY
    Target40-50% 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.

    How to verify

    key_financials.metrics[label='AUM'].yoy_growth

    Risks & concerns

    3
    RiskSeverity

    NIM compression due to low leverage

    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

    medium

    High OPEX to AUM and Cost to Income ratios

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

    medium

    Dependence on external factors for growth

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

    low

    Q&A highlights

    8

    “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

    3 min read7 chapters

    Detailed Narrative

    01

    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%.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    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. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.