Moneyboxx Fin.

Moneyboxx Finance is undergoing a significant strategic shift towards secured lending and higher-ticket loans. The share of livestock-based disbursements reduced from 64% in Q1 FY25 to 47% in Q1 FY26, while loans in the INR5-10 lakh range grew fourfold, now constituting over 20% of disbursements. This pivot is aimed at improving revenue per loan, attracting a more stable creditworthy customer base, and strengthening the asset portfolio, with a target of 70% secured lending by March 2026. The company also launched a new Salaried LAP product to further diversify its offerings.

For Q1 FY26, Moneyboxx reported a 23% year-on-year growth in Asset Under Management (AUM) to INR918 crores, with total income increasing by 29% YoY to INR59 crores. Net Interest Income grew 26% to INR39 crores, and Net Interest Margin (NIM) stood at 14.36%. However, Profit After Tax (PAT) significantly declined to INR24 lakhs from INR4.30 crores in Q1 FY25. This dip in profitability was primarily attributed to muted disbursement growth during the quarter and higher credit costs, which management expects to normalize.

On-book Gross Non-Performing Assets (GNPA) rose to 7.28% and Net NPAs to 3.78% in Q1 FY26. Management noted that while AUM growth was flat, the absolute incremental NPA is decreasing, with the 30-plus bucket showing a reduction from INR18 crores in December to INR10 crores in the last quarter. The company has intensified collection efforts by deploying a dedicated team of 103 staff and 50 tele-callers, and a legal team that filed 226 cases in FY25, targeting 3,000-4,000 cases this year. The Provision Coverage Ratio remained steady at 50%, and credit cost for the quarter was 3.65%.

The average borrowing IRR reduced to 12.48%, with the marginal cost of funds at 12.1% in Q1 FY26, reflecting an approximate 1% annual reduction over the past five years. Management expects the cost of funds to further decline to single digits in the medium term, supported by favorable regulatory changes, repo rate cuts, and increasing scale. The Capital to Risk-weighted Assets Ratio (CRAR) stood strong at 28.4%, bolstered by INR91 crores already received from a previously announced INR176 crore equity raise, with the remaining INR85 crores expected by March 2026.

Moneyboxx launched its proprietary Cattle AI solution in March 2025, a cutting-edge technology designed to digitize and automate cattle verification for secured rural lending. This app creates unique IDs for cattle, prevents duplicate funding, and can predict age and identify visible diseases. With over 2 lakh cattle already captured, this innovation is expected to enhance accuracy, strengthen risk control, improve the overall lending experience, and contribute to AUM growth, particularly in the livestock segment. The company also noted that these initiatives, including veterinary services, cost around INR1.5 crores this year but attract grants and improve ESG.

Operating expenses as a percentage of AUM were 13% in Q1, slightly higher than FY26's 12.8% due to lower-than-expected disbursement growth. The company aims to bring this ratio below 10% in the coming years through stronger AUM growth. Geographically, Moneyboxx is diversified across 12 states, with Madhya Pradesh currently accounting for 31.3% of AUM. Management expects MP's share to organically decline to 25% over the year as other regions, particularly in the South, grow.