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Finkurve Financial Services Limited — Q1 FY27 earnings call

Call held 13 Aug 2026

Company page: Finkurve Financial Services share price, financials & guidance record

Management summary

Finkurve Financial Services Limited reported a strong Q1 FY27 with AUM growing 135% YoY and revenues up 89% YoY, driven by branch expansion and disciplined growth. Despite healthy capital adequacy and stable asset quality (0.54% GNPA), ROA was 2.9% due to leverage and cost structures. Management outlined targets for leverage, AUM growth, and long-term ROA/ROE, while addressing regulatory changes and competitive dynamics in the gold loan sector.

Highlights

  • Asset Under Management (AUM) grew by 135% YoY, demonstrating strong business expansion.

  • Revenues increased by almost 89% YoY, and Profit After Tax (PAT) grew by almost 65% YoY.

  • The branch network expanded by 42%, from 83 to 118 branches as of June 30, indicating robust physical presence growth.

  • Capital adequacy remained healthy at 26.6%, providing flexibility for future growth.

  • Successfully onboarded Franklin Templeton for an NCD of Rs. 50 crores and expanded retail participation to over 24,000 bondholders.

Concerns

  • Return on Assets (ROA) was 2.9%, which management attributed to increasing leverage and finance/opex costs not allowing PAT to grow proportionally with AUM.

  • The gold loan industry's growth is directly correlated with gold prices, posing a potential challenge if prices stabilize or correct, impacting loan growth and ticket sizes.

  • The company's stock price has corrected 50-55% from its highs, despite strong operational performance, indicating a market disconnect.

Key financials

  1. AUM Growth 135% +135%YoY
  2. Revenue Growth 89% +89%YoY
  3. PAT Growth 65% +65%YoY
  4. Gross NPA 0.54%
  5. Net NPA 0.48%
  6. ROA 2.9%
  7. Return on Equity 9.7% +19.8%YoY
  8. Debt to Equity 2.9× +314%YoY
  9. Capital Adequacy 26.6%
  10. Branches 118 +42%YoY
  11. Cash in Hand ₹56 Cr
  12. Treasury Investments ₹67 Cr
  13. Average AUM per Branch ₹10.3 Cr

What they filed

Q1 FY27: revenue up 88.3%, net profit up 65.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue32 40 40 40 48 +51%52 +30%67 +67%75 +88%
Net profit3 6 4 5 6 +71%7 +24%8 +106%8 +66%
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
  • Debt Debt disclosed
    Our debt to equity has multiplied by 3x almost from 0.7x to almost 2.9x as of 30th June.
  • Liquidity Cash ₹56 Cr Comfortable liquidity position with Rs. 56 crores cash in hand and Rs. 67 crores in treasury investments. The company has a runway of almost Rs. 800 crores before reaching optimal leverage status.
    With that, we also have a pretty comfortable liquidity position, almost Rs. 56 crores being cash in hand and almost Rs. 67 crores of being treasury investments made as of 30th June. We still have room for around Rs. 400 crores of off book. So, we still have a runway of almost Rs. 800 crores before we reach the optimal status.

Guidance & targets

Leverage

  • Targeted Debt to Equity Ratio Leverage · FY27 · High confidence 4x to 4.5x
    Our targeted range is about where the industry is right now, which is at 4x and beyond that, we will also have participation in terms of co-lending. Our idea of having a co-lending proportion of at least 15% to 20% by end of this financial year. That's the overall target for FY27. Beyond 4x for now we do not see that happening in FY27. We would like to be in that range of 4 to 4.5x.

    — Aakash Jain

Co-lending

  • Co-lending Proportion Co-lending · end of FY27 · High confidence 15-20%
    Our idea of having a co-lending proportion of at least 15% to 20% by end of this financial year.

    — Aakash Jain

AUM

  • AUM Growth AUM · FY27 · High confidence 50-60%
    As we have given the guidance earlier, we were expecting to grow this year by 50% to 60%.

    — Aakash Jain

Yields

  • Lending Yields Yields · medium term · Medium confidence 20-20.5%
    The yields have been stable at 20%. These yields will not go down, they trying to increase these yields. You can assume that it will it will stabilize somewhere around 20% or 20.5%.

    — Naveen Kottala

  • Yield Growth Yields · medium term · Medium confidence 50 bps
    On the yield side, you can expect 50 bps growth and on the cost of fund side also you can expect some deduction.

    — Naveen Kottala

ROA

  • ROA (steady state) ROA · steady state · Medium confidence 3%
    At a steady state, in the short term, it will not be stable, but on a steady state we are targeting somewhere around 3% ROA.

    — Naveen Kottala

  • ROA (next 5 years) ROA · next 5 years · Medium confidence 3-3.5%
    If you ask us ROA, ROE guidance for the next five years, we ideally would want to be at a 3%, 3.5% ROA and a 18% ROE kind of a number.

    — Priyank Kothari

ROE

  • ROE (next 5 years) ROE · next 5 years · Medium confidence 18%
    If you ask us ROA, ROE guidance for the next five years, we ideally would want to be at a 3%, 3.5% ROA and a 18% ROE kind of a number.

    — Priyank Kothari

Market context

  • Average AUM per Branch Branch Economics · medium term · Medium confidence Rs. 12-13 crores
    Our average AUM per branch currently is Rs. 10.3 crores. We wish to reach a number of Rs. 12 crores to Rs. 13 crores average AUM per branch.

    — Naveen Kottala

  • New Branch Breakeven Period Branch Economics · new branch · High confidence 12-18 months
    In terms of new branch, it takes around 12 months to 18 months to break even. Our breakeven AUM is somewhere around Rs. 5 crores to Rs. 6 crores. On a branch-to-branch basis, we are achieving that in 12 months to 18 months.

    — Naveen Kottala

  • New Branch Breakeven AUM Branch Economics · new branch · High confidence Rs. 5-6 crores
    Our breakeven AUM is somewhere around Rs. 5 crores to Rs. 6 crores.

    — Naveen Kottala

What to watch in Q2 FY27

Promoter Capital Infusion

by November 2026
Current Rs. 30 crores expected
Target Confirmation of Rs. 30 crores infusion

Why it matters

This infusion will provide additional cushion for leverage and support growth plans.

Plus, over and above that there is a capital infusion from the promoters in the form of share warrants which is about Rs. 30 crores is to come, the deadline is up to November. We will see that also happening in this financial year.

Risks & concerns

  • Regulatory changes impacting business momentum

    medium

    Revised regulatory frameworks may temporarily influence business momentum, but are seen as positive for long-term evolution.

    Management acknowledged

  • Gold price volatility and correction

    medium

    Gold prices experienced correction and increased volatility, which historically impacts gold loan industry growth and ticket sizes.

    Management acknowledged

  • Stock price disconnect from operational performance

    medium

    Stock price corrected 50-55% from highs despite strong operational performance, raising concerns about market perception.

    Analyst not addressed

  • ROA not proportional to AUM growth

    low

    ROA at 2.9% is lower than desired due to increasing leverage and finance/opex costs, which are expected to normalize with scale.

    Management acknowledged

Q&A highlights

7 direct, 1 evasive
Debt-to-equity ratio and targeted leverage Direct
Our targeted range is about where the industry is right now, which is at 4x and beyond that, we will also have participation in terms of co-lending. Our idea of having a co-lending proportion of at least 15% to 20% by end of this financial year. That's the overall target for FY27. Beyond 4x for now we do not see that happening in FY27. We would like to be in that range of 4 to 4.5x.

Clarifies the company's comfort level with leverage and its strategy to achieve it, including co-lending.

Asked by Vedant Trivedi

Sufficiency of current capital base for FY27 growth Direct
Absolutely. If you look at our capital base, our net worth is about Rs.350 crores wherein 1x is still remaining. We can straight away add that Rs. 350 crores to our AUM. We have a Rs. 100 crores cash position, let that be as it is. Plus, there is a space for co-lending as well. So, another if we target another 15% to 20%, which is almost Rs. 300 crores to Rs. 400 crores. On a Rs. 1,270 crores, we are almost adding Rs. 700 crores which will again take us to Rs. 1,900 crores to Rs. 2000 crores kind of an AUM. It's current capital. Plus, over and above that there is a capital infusion from the promoters in the form of share warrants which is about Rs. 30 crores is to come, the deadline is up to November. We will see that also happening in this financial year. So, that will again give us some cushion on the leverage for about Rs. 100 crores there as well.

Provides a detailed breakdown of capital available for growth, including internal accruals, co-lending potential, and promoter capital infusion.

Asked by Vedant Trivedi

Impact of RBI regulations on gold loan processes and internal changes Direct
Yes. Post the new guidelines which were very clearly drafted out and given by RBI, the whole industry is trying to implement that. For us it was a different status altogether because we at the same time turned out to be middle layer as well. For us, we had to invest substantially in the compliance department. We got head of compliance as well as a whole team under the compliance set, as well as we are investing in software to ensure that we are fully compliant for both, middle layer regulation as well as new RBI compliance regulations. I would like to tell you this compliance is an ongoing thing and these days every two, three weeks there is one or the other circular which comes in, and but largely we keep track of draft circulars and we kind of estimate that what all are the impact for a gold loan product.

Addresses a key regulatory risk for the sector, detailing the company's proactive measures in compliance and process adaptation.

Asked by Priti Sharma

Trajectory of lending yields, cost of funds, and net interest margins Direct
The yields have been stable at 20%. These yields will not go down, they trying to increase these yields. You can assume that it will it will stabilize somewhere around 20% or 20.5%. What is the other thing you asked? ... The cost of funds is right now we are at Triple B+ rated organization. We are expecting a re-rating after a certain size, around Rs. 2000 crores. So, then we will get a cost of funds benefit. But currently what we are doing is we are increasing our co-lending share which is at a better cost. Our current co-lending share is around 3%, our target is to reach around 15% to 20% by end of the financial year. So, that will anyways reduce the cost of funds. On the yield side, you can expect 50 bps growth and on the cost of fund side also you can expect some deduction.

Provides specific numerical guidance on key profitability drivers and strategies to manage them.

Asked by Bhavya Agarwal

ROA stabilization and long-term targets Direct
At a steady state, in the short term, it will not be stable, but on a steady state we are targeting somewhere around 3% ROA. But that will happen only after we reach a certain size and scale which absorbs all the operating which gives us a better operating leverage. ... If you ask us ROA, ROE guidance for the next five years, we ideally would want to be at a 3%, 3.5% ROA and a 18% ROE kind of a number.

Outlines the company's long-term profitability aspirations and the conditions for achieving them.

Asked by Bhavya Agarwal

Impact of gold price volatility on loan growth and ticket sizes Direct
Historically, whenever the gold prices are corrected or subdued, the gold loan industry did not grow to that extent. It has an industry-wide direct correlation. So, if you look at your steady state book which is already built, growing that will have a challenging time if the gold prices continue to decline. ... During these times, the ticket sizes are subdued. So, if you look at, I think you will be looking at subdued ticket sizes from Q4 to Q1 and Q2 you will find the major difference that the ticket sizes are getting smaller. That is a direct correlation with collateral price because the industry works on number of tickets per day.

Highlights a significant external factor influencing the core business and its direct impact on key operational metrics.

Asked by Suraj Shinde

Key competitive advantages beyond technology and fast turnaround time Direct
One is of course how well you're able to, serve your customers like you rightly mentioned. But I think the other moat that of the group, Augmont is that it is one of the largest gold ecosystems in India, and the promoters, carry almost 50 years of experience in the underlying asset. So, I would say that the family knows how the product moves across households. I think that experience has given us a unique edge of truly understanding our customers and to be able to serve them in the right possible way with the right possible product.

Explains the company's unique selling proposition and competitive moat, which is crucial for long-term sustainability.

Asked by Suraj Shinde

Disconnect between stock price performance and operational performance Evasive
We really don't comment on what happens in the share prices. We refrain from giving any guidance or any comments on that. But all we can say is that if you see the past performance of the organization, QoQ we've been performing consistently. Our only commitment to the investors is that we've been consistently showing performance and we will continue to do so.

An analyst directly challenged management on stock underperformance despite strong results, but management declined to comment on market perception.

Asked by Sachin Sethiya

2 min read 6 chapters

Detailed narrative

Strong Growth in AUM and Branch Network

Finkurve Financial Services Limited reported a robust Q1 FY27, with Asset Under Management (AUM) growing by an impressive 135% year-on-year. This growth was complemented by a significant expansion in its physical footprint, as the branch network increased by 42%, from 83 to 118 branches as of June 30, 2026. Management indicated that 50% of the YoY AUM growth was driven by tonnage and the other 50% by price, with customer additions increasing by 15-20% month-on-month.

Profitability and Capital Adequacy

The company's financial performance saw revenues increase by almost 89% and Profit After Tax (PAT) by nearly 65% year-on-year. Despite this growth, the Return on Assets (ROA) stood at 2.9%, which management attributed to increased leverage and associated finance costs. However, the average Return on Equity (ROE) improved from 8.1% in Q1 last year to 9.7% this quarter. The debt-to-equity ratio increased to 2.9x from 0.7x, while capital adequacy remained healthy at 26.6%, providing a strong foundation for future expansion.

Asset Quality and Liquidity Position

Finkurve maintained stable asset quality, reporting a Gross NPA of 0.54% and a Net NPA of 0.48%. The company also highlighted a comfortable liquidity position, with Rs. 56 crores in cash in hand and Rs. 67 crores in treasury investments as of June 30. Management noted that there is still a runway of approximately Rs. 800 crores before reaching optimal leverage status, indicating ample room for further growth without immediate capital constraints.

Strategic Initiatives and Governance Enhancements

The company continued to scale its co-lending partnerships and saw traction in cross-sell initiatives, aiming to build a stronger fee income franchise. Significant strides were made in strengthening governance, including the onboarding of Mr. CVR Rajendran as Additional Director, Mr. Raju Shah as Chief Risk Officer, and Mr. Husain Pittalwala as Head of Compliances. These appointments underscore the commitment to robust risk management and regulatory adherence, especially in light of new RBI guidelines.

Outlook on Margins and Long-term Targets

Management expects lending yields to stabilize around 20-20.5% and anticipates a 50 bps growth on the yield side, coupled with some deduction in the cost of funds due to an expected re-rating and increased co-lending share (target 15-20% by FY27 end). For the long term (next 5 years), the company targets an ROA of 3-3.5% and an ROE of 18%, aiming to achieve these by reaching a certain size and scale that allows for better operating leverage.

Branch Expansion and Economics

The company's expansion strategy focuses on organic growth in adjacent states, aiming to reach an average AUM of Rs. 12-13 crores per branch from the current Rs. 10.3 crores. New branches are expected to break even within 12-18 months, with a breakeven AUM of Rs. 5-6 crores. This disciplined approach to expansion is intended to ensure sustainable growth and operational efficiency.

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