Moneyboxx Fin. — Q2 FY26 earnings call

Call held 31 Oct 2025

Management summary

Moneyboxx Finance reported a quarter of strategic transition, focusing on secured lending and improving portfolio quality, which led to a significant increase in secured disbursements and AUM share. While AUM and total income showed growth, profitability was impacted by muted disbursements and higher credit costs compared to the previous year. The company is optimistic about future growth and asset quality improvement, supported by capital raise plans and operational efficiencies.

Highlights

  • Assets Under Management (AUM) grew 16% YoY to INR 892 crores.

  • Disbursements reached INR 115 crores, up 23% QoQ.

  • Secured lending accounted for 69% of total disbursements in Q2 FY26, significantly up from 43% last year.

  • The secured loan book now stands at 55% of total AUM, compared to 32% in Q2 last year.

  • Total income increased 10% YoY to INR 55 crores.

  • Profit after tax was INR 0.3 crores, down from INR 2.3 crores in Q2 FY25.

  • Operating expenses as a percentage of AUM stood at 12.7%, slightly lower than 12.8% in FY25.

  • The Board approved a 1:1 bonus issue, and CRAR stands at 27.1%.

Key financials

  1. AUM ₹892 Cr +16%YoY
  2. Disbursements ₹115 Cr +23%QoQ
  3. Total Income ₹55 Cr +10%YoY
  4. Profit After Tax ₹0.3 Cr -87%YoY
  5. Operating Expenses as % of AUM 12.7%
  6. Average Lending IRR 26.4%
  7. Average Borrowing IRR 12.8%
  8. On-book Gross NPA 3.3%
  9. On-book Net NPA 1.7%
  10. Collection Efficiency 92.5%
  11. CRAR 27.1%
  12. RoA 0.1%
  13. RoE 0.4%
  14. Credit Cost H1 3%

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue49 52 52 59 55 +11%55 +6%63 +21%52 −12%
EBITDA19 18 15 23 24 +21%— — —
Net profit2 0 -5 0 0 −86%0 +75%0 +109%0 −12%
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

high confidence
  • Liquidity Liquidity disclosed Strong liquidity buffer of INR 97 crores as of September 30.
    Our liability mix is now well diversified, 43% from debt capital market. This is one area where, again, Moneyboxx get a very good response. So, we are now very large retail base of lenders through NCDs, 28% each from BIs and banks. We also maintained a strong liquidity buffer of INR 97 crores as of September 30.

Guidance & targets

Portfolio Mix

  • Secured Lending Share (AUM) Portfolio Mix · FY26 · High confidence 70%
    We confidently target a secured lending share of 70% by March 2026, which we believe will play a critical role in ensuring more stable asset quality, long-term portfolio with stronger risk mitigation and reduced default rates.

    — Deepak Aggarwal

  • Secured Lending Share (AUM) Portfolio Mix · next year (FY27) · High confidence 80-85%
    in terms of secured lending, we are targeting a 70% AUM in secured lending for FY '26, then 80% by next year and say, 80%, 85%.

    — Deepak Aggarwal

  • Cattle Loans Share Portfolio Mix · next 2-2.5 years · High confidence below 40%
    while in the past, cattle loans had the majority, like 2/3 share, this will come down to below 40% in the next 2, 2.5 years.

    — Deepak Aggarwal

  • Secured AUM Target Portfolio Mix · March 2027 · High confidence minimum 80%
    80% is secured. It could be even more, but minimum 80% secured.

    — Deepak Aggarwal

Growth

  • AUM Growth Growth · coming year (FY26) · High confidence 25-30%
    And definitely, we are targeting over 25% growth to maybe 30% growth at least in the coming year as well in terms of AUM growth. So, 25% to 30% Y-o-Y growth will definitely happen.

    — Deepak Aggarwal

AUM

  • AUM Target AUM · March 2027 · High confidence INR 1,800 crores plus
    March '27, internally, what we are targeting is INR 1,800 crores plus.

    — Deepak Aggarwal

Asset Quality

  • Credit Cost Asset Quality · FY26 · High confidence 3-3.5%
    So, we still believe that credit cost for FY '26 will be in the range of 3%, 3.5% lower than the last year, but still in the 3-ish kind of range.

    — Deepak Aggarwal

Efficiency

  • OPEX as % of AUM Efficiency · next 2 years · High confidence below 10%
    Cost optimization is still a key, and we are targeting to bring OPEX down below 10% over the next 2 years, supported by stronger AUM growth in coming quarters.

    — Deepak Aggarwal

Profitability

  • NIM Profitability · H1 FY26 · Medium confidence 14% plus
    It will be in the similar range as in the H1, it will be in the 14% plus.

    — Deepak Aggarwal

What to watch in Q3 FY26

Warrant conversion completion

Next quarter (Dec-Feb)
Current INR 80 crores pending
Target Full conversion by March 12th, 2026

Why it matters

Crucial for capital infusion to support AUM growth and strategic initiatives.

So, the most important part now is the warrant raise. So, we have to bring it before 12th of March. Definitely, our intention is to bring it much before that. So, you will see warrant starts coming in between December and February. So, that's the first target, because that's the INR 80 crore which is required, and that gives adequate comfort for this year AUM.

Risks & concerns

  • Overleverage and guardrails in the MFI sector

    medium

    The MFI sector suffered significantly from overleverage and regulatory guardrails in the past 1-2 years, which Moneyboxx is addressing by shifting its portfolio.

    Management acknowledged

  • Tighter market for lenders across the board

    medium

    The market for all lenders is currently tighter, though management sees improving trends quarter-on-quarter.

    Management acknowledged

  • Slow Indian legal system for loan recovery

    medium

    While the legal system is slow, the company is committed to pursuing legal action for recovery, especially for secured loans, expecting results over time.

    Management acknowledged

Q&A highlights

8 direct
Customer quality and asset quality guidance for secured lending Direct
So, one, I would say is that at the overall level, our secured portfolio is doing much better than the unsecured portfolio, and especially the new book, which is getting made. So, initially, when we started secured lending, especially our customer base was very similar, which is MFI Plus-Plus. ... So, that ways the quality is improving.

Clarifies the improving asset quality of the new secured loan book and the transition in customer profile.

Asked by Nisarg Vora

Reason for higher credit costs despite ARC transaction Direct
Credit cost has declined a bit, but see, ARC is for the past portfolio. So, what we sold in ARC was in the NPA accounts or the write-off accounts. Credit cost relates to moving of incremental portfolio to NPA.

Explains that ARC sales address legacy NPAs, while credit costs reflect ongoing incremental slippages.

Asked by Nisarg Vora

Impact of increasing portfolio quality on growth and profitability guidance Direct
I don't think so, Nisarg. See, the market size is very, very large. So, the larger market in India is for the secured loans. ... And definitely, we are targeting over 25% growth to maybe 30% growth at least in the coming year as well in terms of AUM growth.

Reassures that focus on quality will not impede growth, citing a large market for secured loans and providing AUM growth targets.

Asked by Nisarg Vora

Warrant conversion timeline and AUM target for March 2027 Direct
So, the most important part now is the warrant raise. So, we have to bring it before 12th of March. ... March '27, internally, what we are targeting is INR 1,800 crores plus.

Provides specific timelines for capital infusion from warrants and a long-term AUM target, indicating confidence in future growth.

Asked by Sagar Singh

Outlook on credit cost and NPA for next 2-4 quarters Direct
So, we still believe that credit cost for FY '26 will be in the range of 3%, 3.5% lower than the last year, but still in the 3-ish kind of range. And post that, it should start improving.

Offers a forward-looking perspective on asset quality and credit cost, suggesting stabilization and eventual improvement.

Asked by Shekhar Gupta

Branch expansion plans Direct
Shekhar, we don't have any plans to increase branches at current level, because see we already have a pan-India presence with 160 branches. So, what we are looking at now is very significantly in terms of controlling our OPEX, and get the number from these branches.

Indicates a shift from network expansion to optimizing existing branch productivity and controlling operating expenses.

Asked by Shekhar Gupta

Collection efficiency for secured lending Direct
So, as you will notice in the presentation, the collection efficiency is about 96% in the secured. ... Yes, historically, what we have done, there is some pain. which is there. But still, it's much better than the unsecured.

Provides a key metric for the new secured portfolio and acknowledges room for improvement, especially compared to ideal rates.

Asked by Anand Kumar

Q3 log-in trends and conversion ratios Direct
So, the conversion ratios have really improved whilst because of the fact that we have added some log-in fee to the unsecured, then the count of log-ins probably have come down, but the conversion is much, much better. ... So, I see a very positive trend there, in terms of log-ins and conversion.

Highlights operational improvements in lead filtering and conversion, suggesting better quality of new business generation.

Asked by Anand Kumar

3 min read 7 chapters

Detailed narrative

Economic and Sector Overview

India's economy remains resilient, with the Reserve Bank of India projecting GDP growth of 6.8% in FY26, driven by increasing domestic demand and rural recovery. Retail inflation eased to an 8-year low of 1.5% in September, prompting the RBI to cut the repo rate to 5.5%. The NBFC sector is stabilizing, supported by RBI actions and improved governance, creating a favorable environment for growth.

Strategic Portfolio Transformation

Moneyboxx is undergoing a significant strategic shift to strengthen and diversify its portfolio. The share of livestock-based disbursements has reduced from 64% in Q1 FY25 to 37% in Q2 FY26. The company is focusing on higher-value lending, with loans of INR 5-10 lakhs growing fivefold to 60% of disbursements, aiming for improved revenue per loan and a more stable customer base.

Shift to Secured Lending and Asset Quality Focus

A major strategic shift is towards secured lending, which accounted for 69% of total disbursements in Q2 FY26, a substantial rise from 43% in Q2 last year. The secured loan book now constitutes 55% of total AUM, up from 32% in Q2 last year, with a target of 70% by March 2026. This move is expected to ensure more stable asset quality and reduced default rates. Disbursements to customers with a credit bureau score of 650 and above increased to 72% in Q2 FY26, up from 50% last year, indicating a focus on safer borrowers.

Financial Performance and Profitability

AUM grew 16% year-on-year to INR 892 crores, with an on-book portfolio of INR 693 crores and a managed book of INR 199 crores. Disbursements reached INR 115 crores, up 23% from the previous quarter. Total income grew 10% YoY to INR 55 crores. However, profit after tax was INR 0.3 crores, a significant decline from INR 2.3 crores in Q2 FY25, primarily due to muted disbursements and higher credit costs.

Operational Efficiency and Funding

Operating expenses as a percentage of AUM stood at 12.7%, slightly lower than 12.8% in FY25, with a target to bring OPEX below 10% over the next two years. The average lending IRR was 26.4%, while the average borrowing IRR reduced to 12.8% (incrementally 12.1%). The company maintains a strong liquidity buffer of INR 97 crores as of September 30 and has a CRAR of 27.1%.

Capital Raise and Shareholder Returns

The company raised INR 175.8 crores in equity, with INR 84.72 crores expected from warrant conversions by March 2026. The Board also approved a 1:1 bonus issue, aiming to reward shareholders and reflect confidence in the company's net worth despite recent valuation declines. Management expects warrant conversion to occur between December and February.

Technology and Future Outlook

Moneyboxx launched its proprietary Cattle AI solution in March 2025 for automated cattle verification, enhancing risk controls and lending experience. The company is targeting 25-30% YoY AUM growth for the coming year and an AUM of INR 1,800 crores plus by March 2027, with at least 80% secured. The focus remains on strengthening collection efficiency and improving overall credit quality.

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