Concall AI

Moneyboxx Fin. — Q1 FY26 earnings call

Call held 28 Jul 2025

Management summary

Moneyboxx Finance Limited reported a strategic shift towards secured lending and higher-ticket loans in Q1 FY26, with AUM growing 23% YoY to INR918 crores and total income up 29% to INR59 crores. While profitability was impacted by higher credit costs and muted disbursement growth, the company is focusing on improving asset quality, reducing cost of funds, and leveraging new technologies like Cattle AI to enhance operational efficiency and risk management. Management expects profitability to improve as credit costs normalize and AUM growth picks up, targeting INR1,400 crores AUM for FY26.

Highlights

Asset Under Management (AUM) grew 23% YoY to INR918 crores.
Total Income increased 29% YoY to INR59 crores.
Net Interest Income grew 26% to INR39 crores.
Net Interest Margin (NIM) stood at 14.36%.
Profit After Tax (PAT) was INR24 lakhs, down from INR4.30 crores in Q1 FY25.
Secured loan book now constitutes 49% of AUM, up from 27% in Q1 FY25.
Disbursements to customers with 750+ credit score increased to 20.3% of total, up from 5% last year.
On-book Gross NPA rose to 7.28% and Net NPA to 3.78%, with Provision Coverage Ratio at 50%.

Key financials

01 AUM ₹918 Cr +23%YoY
02 Total Income ₹59 Cr +29%YoY
03 Net Interest Income ₹39 Cr +26%YoY
04 NIM 14.4%
05 PAT ₹0.24 Cr -94.4%YoY
06 On-book GNPA 7.3%
07 On-book Net NPA 3.8%
08 CRAR 28.4%

What they filed

Q1 FY27: revenue down 11.9%, net profit down 12.5% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	49	52	52	59	55 +11%	55 +6%	63 +21%	52 −12%
Expenses	30	34	37	36	31	31	39	28
EBITDA	19	18	15	23	24 +21%	—	—	—
Margin	39%	35%	29%	40%	43%	—	—	—
Other income	0	0	0	0	0	0	0	0
Interest	16	16	17	21	21	21	21	21
Depreciation	2	2	2	2	2	2	3	3
Profit before tax	2	0	-4	0	0 −85%	0 +79%	0 +112%	0 −44%
Tax rate	4%	17%	37%	44%	9%	21%	0%	17%
Net profit	2	0	-5	0	0 −86%	0 +75%	0 +109%	0 −12%
EPS	0.31	0.03	-0.81	0.04	0.04	0.05	0.07	0.03

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.

Segment breakdown

AUM by State
31.3% Madhya Pradesh Share
Portfolio Mix
49% Secured Loan Book Share of AUM75% On-book Portfolio Share of AUM25% Managed Book Share of AUM
Disbursement Mix
47% Livestock-based Disbursement Share50% Loans below INR3 lakhs Share20% Loans INR5-10 lakhs Share64% Secured Disbursement Share20.3% Disbursement to 750+ Credit Score Customers

Capital allocation

high confidence

Liquidity Liquidity disclosed The company maintains a strong liquidity buffer of INR165 crores as of June 30, 2025.

Our liability mix is now well diversified with 42% from debt capital markets, 33% from domestic institutions and 25% from banks. We also maintain a very strong liquidity buffer of INR165 crores as of June 30, 2025.

Guidance & targets

AUM

AUM Target AUM · FY26 · High confidence at least INR1,400 crores

In terms of AUM, I can tell you that we are targeting at least INR1,400 crores for this year.

— Deepak Aggarwal

Portfolio Mix

Secured Lending Share Portfolio Mix · March 2026 · High confidence around 70%

We are confidently targeting a secured lending share of around 70% by March 2026, which we believe will play a critical role in ensuring more stable asset quality, stronger risk mitigation and reduced default rates.

— Deepak Aggarwal

Operating Efficiency

Operating expenses as % of AUM Operating Efficiency · next few years · Medium confidence below 10%

However, cost optimization is a key priority, and we are targeting to bring opex below 10% over the next few years, supported by stronger AUM growth in coming quarters.

— Deepak Aggarwal

Cost of Funds

Cost of Funds Cost of Funds · medium term · Medium confidence single digits

Looking ahead, we expect our cost of funds to gradually decline and move into single digits in the medium term, supported by favourable regulatory environment, which is cut in the repo rates, improvements in our credit rating and increasing scale of operations.

— Deepak Aggarwal

Credit Cost

Credit Cost Credit Cost · this year · High confidence around 3%

So in total, expect a cost of around 3% for the current year.

— Deepak Aggarwal

AUM Concentration

Madhya Pradesh AUM Share AUM Concentration · over the year · Medium confidence 25%

So one is directionally quarter-on-quarter, the share of MP will come down. So it will happen organically. Right now, we don't have that plan of further diversification for this year. But yes, incrementally, you will saw this decline to 25% over the year.

— Deepak Aggarwal

Market context

RoA and RoE Returns · this year · Medium confidence Positive

And we will have a positive ROA and ROE. Let's see how the quarters proceed.

— Deepak Aggarwal

What to watch in Q2 FY26

AUM Growth Trajectory

next quarter

Current INR918 crores (23% YoY growth)

Target Progress towards INR1,400 crores for FY26

Why it matters

AUM growth is crucial for improving operational efficiency and overall profitability, especially after muted Q1 disbursements.

In terms of AUM, I can tell you that we are targeting at least INR1,400 crores for this year.

Risks & concerns

Higher Credit Costs
medium

Higher credit costs absorbed operating core profit, impacting PAT and RoA/RoE in Q1, but expected to normalize.

Management acknowledged
Muted Disbursement Growth
medium

Lower-than-expected disbursement growth in Q1 contributed to higher operating expenses as a percentage of AUM and lower profitability.

Management acknowledged
Rising GNPA/NNPA
medium

On-book GNPA rose to 7.28% and Net NPA to 3.78%, driven by flat AUM growth and ongoing credit cycle, but management expects slippages to normalize and asset quality to improve from Q3.

Management acknowledged
Rural Stress and MFI Impact
medium

Last year saw rural stress due to floods and MFI impact, leading to higher delinquencies in the Agri space, though management notes improvements with monsoon and RBI actions.

Management acknowledged

Q&A highlights

6 direct

NPA Trend and Collection Efforts Partial

See, because the bucket is increasing, one, on the denominator side, the AUM has not increased. So that's one of the reasons. But you still have incremental cash bounces, which move towards NPA. So that number is decreasing. Every quarter, that number is coming down from INR18 crores in December to INR13 crores in March to INR10 crores in last quarter.

Analyst questioned the rising 30-plus bucket despite improved portfolio, and management clarified that while AUM growth was flat, absolute NPA numbers are decreasing, and new collection strategies are being implemented.

Asked by Mihir Shah

Secured vs Unsecured NPA Breakdown Direct

It's about 80%, 20%. So I mean, in terms of overall GNPA, 20% is coming from the secured book and 80% is coming from the unsecured book.

This provides a crucial breakdown of the GNPA, indicating that the majority of stress is still concentrated in the unsecured portfolio despite the strategic shift.

Asked by Mihir Shah

Cost of Funds Trajectory Direct

So this year, with one bank, we already have 11%. And we are in this month or next month, we are expecting that rate to come down to 10%. I'm seeing that now banks are coming in the range of, say, 11.5%, 11.7%, incrementally, we will be getting that rate even in this year, even when the rating doesn't improve this year.

Analyst sought clarity on the expectation of marginal cost of funds dropping to single digits, and management provided specific current bank offers and a timeline for further reduction, linking it to scale and credit rating.

Asked by Sunidhi Joshi

Disbursement Growth and Strategic Shift Partial

So yes, businesses have declined. A large fact is one is the subdued market environment. Also, is that our strategic shift, you would see that like livestock disbursements have decreased from 64% to 47%, that higher credit bureau score customer have been increased, higher ticket loans have been increased. So there is a strategic shift in how we are building our portfolio going forward.

Analyst questioned the YoY decline in Q1 disbursements, and management explained it as a result of both a subdued market and a deliberate strategic shift towards higher-quality, higher-ticket segments, which temporarily impacts volumes.

Asked by Sunidhi Joshi

Scaling Credit Sourcing for High-Credit Customers Direct

So, one thing here is that is a shift of mindset, which helps. I mean, the way some of the new branches are changing. So if you see the 6 new states like Gujarat, Bihar and 4 states in South, they have built with that mindset only that we have to secure only secured customer with a better credit rating.

Analyst asked about scaling the sourcing of high-credit-score customers, and management detailed the organizational and operational changes, including mindset shifts in new branches and hiring specialized staff.

Asked by Hitanshi Agarwal

Cattle AI App Impact on Business Direct

So this will help us because it's a large portfolio and the customer will also be happy seeing the report in terms of identification of disease, etcetera and definitely, in terms of credit quality, it will help us a lot.

Analyst sought details on the new Cattle AI app, and management explained its features and how it contributes to risk control, customer satisfaction, and overall credit quality, supporting AUM growth.

Asked by Varun Mishra

AUM Concentration and Geographic Diversification Direct

So in terms of geographic diversification now, we are a very well diversified. So we have presence in 12 states. And incrementally, you will see that the share of Madhya Pradesh declining. So as South takes up shape. So just to tell you that out of 163 branches, about 25% are in MP.

Analyst questioned the high AUM concentration in Madhya Pradesh, and management clarified their existing diversification across 12 states and the organic plan to reduce MP's share over time.

Asked by Darshan Shah

Collection Efficiency and Cost-to-Income Direct

So I just wanted to understand, besides your traditional operating costs, how much do these additional kind of helping and services build up in that cost? And that is why are we seeing that the cost-to-income is elevated? ... So you see the 1 part is that in terms of cost. So this year for this veterinary services, I see a cost of around INR1.5 crores, last year it was about INR1.2 crores. So one is that impact is there, but not a very large impact.

Analyst probed the elevated cost-to-income ratio and the cost contribution of additional services. Management clarified the relatively small direct cost of these services and highlighted their indirect benefits in attracting grants and improving ESG.

Asked by Darshan Shah

3 min read 6 chapters

Detailed narrative

Strategic Shift to Secured and Higher-Ticket Lending

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.

Financial Performance Overview and Profitability Impact

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.

Asset Quality and Enhanced Collection Efforts

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%.

Cost of Funds Reduction and Capital Adequacy

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.

Technological Innovation with Cattle AI

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.

Operational Efficiency and Geographic Diversification

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.

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

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