Moneyboxx Fin. — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Moneyboxx Finance demonstrated strong progress in Q3 FY26, driven by a strategic pivot towards secured lending and improved asset quality. The company reported robust AUM growth, significant reductions in NPAs and credit costs, and a healthy increase in PAT. Management highlighted improving collection efficiencies, a strengthened funding profile, and an upcoming equity infusion to support future growth and profitability, targeting INR 1,500 crores AUM by FY27.

Highlights

  • AUM reached INR 878 crores as of December 2025, with underlying growth of 17% YoY (excluding ARC transaction).

  • Secured loans now constitute 60% of AUM, up from 38% a year ago, with a target of 80% by March '27.

  • Total income grew 5.6% YoY to INR 54.7 crores in Q3 FY26.

  • Profit After Tax (PAT) increased 77.6% YoY to INR 0.35 crores.

  • GNPA reduced sharply to 1.43% (from 5.6% a year ago), and NNPA declined to 0.72% (from 2.88%).

  • Credit costs moderated to 2.07% in Q3 FY26, down from 4.7% last year.

  • Marginal cost of funds reduced to 11.8%, with the average cost at 12.7%.

  • Board approved an equity raise of INR 43.3 crores, reinforcing the balance sheet and boosting CAR to 26.68%.

Key financials

  1. AUM ₹878 Cr
  2. Underlying AUM Growth (excl. ARC) 17%
  3. Total Income ₹54.7 Cr +5.6%YoY
  4. Net Interest Margin (NIM) 14%
  5. PAT ₹0.35 Cr +77.6%YoY
  6. GNPA 1.4%
  7. NNPA 0.72%
  8. Credit Costs 2.1%
  9. CAR 26.7%
  10. Marginal Cost of Funds 11.8%
  11. Average Cost of Funds 12.7%

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 Board approved an equity raise of INR 43.3 crores to reinforce the balance sheet and support AUM growth. The funds are expected to be received within 15 days of the call date (February 13, 2026). This capital infusion is intended to support AUM growth to INR 1,500 crores easily, or up to INR 1,800 crores with co-lending/BC options.
    Board has approved an equity raise of INR43.3 crores, which will further reinforce the balance sheet and support secure-led growth. [...] The larger part will go to -- the larger part will go to book building only. [...] So post this equity raise, we will have INR300 crores plus in net worth, and we can grow AUM to INR1,500 crores easily through -- I mean, also through term debt, but you have co-lending, BC options as well, through which you can take it to INR1,800 crores as well, but I'm saying is it a reasonable target, with INR300 crores of equity, you can build a INR1,500 crores kind of portfolio. So that would be the main purpose of this equity raise. [...] Yes, because it has to come within the next 15 days, as per the guidelines.

Guidance & targets

AUM Growth

  • Secured AUM as % of total AUM AUM Growth · March '27 · High confidence 80%
    We remain on track to move towards approximately 80% secured AUM by March '27.

    — Deepak Aggarwal

  • AUM AUM Growth · next year (FY27) · High confidence INR 1,500 crores
    For next year, the plan is to at least reach at least cross INR1,500 crores.

    — Deepak Aggarwal

Operating Expenses

  • Operating expenses as % of average AUM Operating Expenses · next 2 years · High confidence <10%
    Over the next 2 years, we are targeting operating expenses to trend below 10% of average AUM as scale builds and productivity improves.

    — Deepak Aggarwal

Cost of Funds

  • Cost of funds Cost of Funds · medium term · Medium confidence single digit
    And we expect a gradual move towards single digit borrowing costs in medium term on an incremental basis as our credit profile strengthens further.

    — Deepak Aggarwal

Credit Costs

  • Credit cost Credit Costs · next year (FY27) · High confidence <2%
    From next year, we believe that GNPA will -- I mean, the credit cost will decline to below 2%.

    — Deepak Aggarwal

Asset Quality

  • GNPA Asset Quality · next year (FY27) · High confidence not beyond 2%
    And so, GNPA should not move beyond 2% going forward.

    — Deepak Aggarwal

Profitability

  • ROE Profitability · next year (FY27) · Medium confidence improve
    But we will start seeing improvements from next year.

    — Deepak Aggarwal

  • ROA Profitability · Medium confidence 4-5%
    I believe this is the business, as I said earlier, that this is a business where you can generate ROA of 4% to 5%, not without much difficulty.

    — Deepak Aggarwal

What to watch in Q4 FY26

AUM Growth Target

FY27
Current INR 878 crores (Dec 2025)
Target INR 1,500 crores

Why it matters

Achieving this AUM target is a key indicator of business expansion and market penetration, crucial for future profitability.

For next year, the plan is to at least reach at least cross INR1,500 crores.

Risks & concerns

  • MFI Crisis Impact on AUM and Opex

    medium

    The MFI crisis in FY24/25 caused AUM growth to taper, leading to higher operating expenses relative to AUM and impacting profitability.

    Management acknowledged

  • Profit Growth Volatility

    medium

    Profit growth has been volatile, largely due to slippages and higher operating expenses, which affected the company's profitability.

    Management acknowledged

  • Unfavorable Funding Market for Small NBFCs

    medium

    The Indian market has not been favorable for smaller NBFCs in the last 1-1.5 years due to turmoil in the MFI segment, making capital raising challenging.

    Management acknowledged

Q&A highlights

7 direct
Slippage breakdown for first-time vs. repeat borrowers Partial
So, we can give you the NPF breakdown by that, but we don't have that readily available, that cut.

Analyst sought granular detail on credit risk, but management indicated data was not readily available, suggesting a potential gap in reporting or internal tracking for this specific metric.

Asked by Deepak Karwa

Profit growth volatility and risk-adjusted returns Direct
So, if you analyze that why the profit was less is largely because of slippages and then the higher opex. These are the items on the expense side and even lower growth in AUM, which affected the profitability of the company. Now as we go forward, you would have seen in the presentation that collection efficiency is now coming back to the normal.

Analyst challenged the volatility of profit despite healthy AUM growth. Management attributed it to past MFI crisis, slippages, and opex, but provided a clear roadmap for improvement through better collections and a secured portfolio.

Asked by Deepak Karwa

Branch expansion strategy and productivity Direct
So, we are not now continuing with the branch expansion, Deepak. In fact, wherever some of the branches are not delivering the expected results, we will merge those branches. [...] next year, we will open some of the branches in a better geographic area where we feel that we can really do the kind of business we want to do.

Analyst questioned the effectiveness of branch expansion. Management clarified a shift from aggressive expansion to optimizing existing branches and strategically opening new ones in high-productivity areas, indicating a focus on efficiency.

Asked by Deepak Karwa

Unseen internal stress despite stable GNPA Direct
No. In fact, as you see the collection efficiency, what we see see, we have provisioned what is required and the way we have been doing since inception, making a 50% provision on NPA. But what we are seeing mainly Nish, is that month-on-month since September, all the buckets in terms of collection are showing improved performance ex bucket 1, bucket 2 and NPA.

Analyst probed for hidden asset quality issues. Management provided detailed evidence of improving collection efficiencies, doubled NPA recoveries, and reducing bounce rates, reassuring about the reported numbers.

Asked by Nish Shah

Impact of secured mix on Net Interest Margin (NIM) Direct
So, I'm saying we will still generate between 23% to 24% kind of yield easily. I would say more like 24% over a medium term. But at the same time, the cost of borrowing will also decrease. So, I think maintaining that NIM is not at a current level should not be very difficult because today, it reflects significant portfolio which has moved to NPA, which going forward should stop...

Analyst raised concerns about NIM compression due to the shift to lower-yield secured assets. Management explained that while yields might be lower, reduced risk, declining cost of funds, and FLDG programs would help maintain healthy NIMs.

Asked by Nish Shah

Future trajectory of GNPA and credit costs Direct
From next year, we believe that GNPA will -- I mean, the credit cost will decline to below 2%. And so, GNPA should not move beyond 2% going forward.

Analyst sought specific guidance on asset quality improvement. Management provided clear targets for credit cost and GNPA reduction for the upcoming fiscal year, indicating confidence in the portfolio's health.

Asked by Nish Shah

Levers for improving ROA and ROE Direct
So, this year, ROE will remain low as is seen in the numbers. But we will start seeing improvements from next year. So, I think there has been something, which is staying. But current year results will be better than last. And next year, as NPA starts declining and AUM start growing, we see better numbers on ROE and ROA.

Analyst questioned the path to achieving aspirational ROA/ROE. Management linked future improvements directly to declining NPAs and growing AUM, providing a clear operational focus for profitability.

Asked by Nish Shah

Outlook for MSME lending industry and credit stress Direct
So, market has been volatile and there has been stress and this has been the longest ever stress, I would say, the industry would have faced. The only thing, the light at the end of the tunnel, which you say is that you would see that collection efficiency across the sector is improving.

Analyst asked for a broader industry outlook. Management acknowledged the prolonged stress but highlighted improving collection efficiencies across the sector as a positive sign, suggesting a normalization phase.

Asked by Raj Doshi

3 min read 6 chapters

Detailed narrative

Strategic Shift to Secured Lending and Portfolio Quality

Moneyboxx Finance continued its strategic pivot towards a more resilient business model, with secured loans now constituting 60% of AUM as of December 2025, a significant increase from 38% a year ago. The company aims to reach 80% secured AUM by March '27. This shift is supported by a focus on higher-quality borrowers, with the share of customers having bureau scores above 650 increasing to 71%, and higher ticket loans (above INR3 lakhs) forming a larger portion of the portfolio. This strategy is central to improving asset quality and reducing earnings volatility.

Robust Asset Quality Improvement

The company reported significant improvements in asset quality during Q3 FY26. GNPA reduced sharply to 1.43% from 5.6% a year ago, while NNPA declined to 0.72% from 2.88%. Credit costs also moderated to 2.07% compared to 4.7% last year. Collection efficiency remains strong at around 94%, with current bucket efficiency (ex-bucket) improving to over 99% in January from 98.15% in September. Resolution rates for Bucket 1 and Bucket 2 have improved to over 60%, the highest since inception, and NPA recoveries are expected to improve significantly in FY '27.

Financial Performance and Profitability

For Q3 FY26, total income grew 5.6% YoY to INR 54.7 crores. Despite a moderation in Net Interest Margin (NIM) to 14% from 16.6% last year due to the shift to lower-yield secured lending, Profit After Tax (PAT) saw a substantial increase of 77.6% YoY, reaching INR 0.35 crores. Management expects PAT to continue improving in coming quarters due to disciplined provisioning, steady collections, and normalization of credit costs.

Strengthened Funding Profile and Capital Infusion

Moneyboxx Finance has significantly strengthened its funding profile, now working with 31 lenders, including 11 leading banks. The company raised a record INR 302 crores through NCDs in calendar year 2025. The average cost of funds has reduced to 12.7%, with the marginal cost of funds at 11.8% for the first time, and a gradual move towards single-digit borrowing costs is expected in the medium term. The Capital Adequacy Ratio (CAR) stands at a healthy 26.68%. Additionally, the Board approved an equity raise of INR 43.3 crores, which will further reinforce the balance sheet and support secure-led growth, with funds expected within 15 days.

Operational Efficiency and Technology Adoption

Operating expenses remained stable sequentially, and the company targets to reduce them below 10% of average AUM over the next two years as scale builds and productivity improves. Secured-focused branches have already achieved around INR 7 crores AUM at 24 months vintage. The company leverages proprietary technology like Cattle AI to reduce processing timelines by 20-30% and enhance underwriting precision. Partnerships with organizations like Rabo Foundation and Shell Foundation provide first and second loss guarantees, offering coverage for the unsecured portfolio.

Outlook and Growth Targets

The company is targeting an AUM of INR 1,500 crores by next year (FY27), with potential to reach INR 1,800 crores with co-lending/BC options. Management expects credit costs to decline below 2% and GNPA not to exceed 2% in FY27. ROE is anticipated to improve from next year as NPA declines and AUM grows, with a long-term aspiration of 4-5% ROA. The company is also consolidating underperforming branches and focusing on opening new branches in high-productivity geographic areas.

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