Concall AI

GAJA — Q1 FY27 earnings call

Call held 10 Sep 2026

Management summary

Gaja Capital reported a strong Q1 FY27, with total income growing 26% YoY to INR51.8 crores and PAT increasing 35% QoQ to INR27.2 crores. The company's cost-to-income ratio improved to 38.4%, and annual EPS rose 28% to 9.5 per share. Following a successful IPO, Gaja is progressing with its Fund V and Eastgate (secondaries) fundraising, while maintaining a focus on high-growth, innovation-led mid-market companies.

Highlights

Total income for Q1 FY27 grew 26% year-on-year to INR51.8 crores.
Profit after taxes for Q1 FY27 grew 35% to INR27.2 crores.
Cost-to-income ratio declined year-on-year to 38.4% as compared to 42.3%.
Annual EPS grew 28% to 9.5 per share.
Book value per share grew 19% from INR47.3 to INR56.1 per share.
Fund IV is currently tracking a gross IRR of 29% at a gross multiple of 1.8 times.
Dividend declared of 15% (INR0.75 per share), with payout ratio increased from 10% to 12.5%.

Concerns

Analyst noted market jitteriness regarding Fund III's disclosed 9% IRR compared to NIFTY/MF returns.
Performance income can exhibit lumpiness quarter-to-quarter, though management emphasizes LTM for stability.

Key financials

3 periods

Headline

Cost-to-Income Ratio
38.4%
Annual EPS
₹9.5
YoY +28%
Book Value Per Share
₹56.1
YoY +19%
Net Worth (June 30, 2026)
₹633.6 Cr
ROE (June 30, 2026)
15.3%
Fund IV Gross IRR
29%
Fund IV Gross Multiple
1.8×
Fund II MOIC
3.8×
Fund I MOIC
5×
Fee-paying Committed Capital
₹3,200 Cr

Q1 FY27

Total Income
₹51.8 Cr
YoY +26%
PAT
₹27.2 Cr
YoY +35%
Fee Income Growth
—
YoY +7%
Performance Income Growth
—
YoY +17%
Total Expenses Growth
—
YoY +14%

LTM June '26

Total Income
₹168.4 Cr
YoY +39%
PAT
₹89.1 Cr
YoY +38%

What they filed

₹ Cr · quarterly

Line item	Q1 FY26	Q2 FY26	Q4 FY26	Q1 FY27
Revenue	15	99	15	14
Expenses	14	39	15	14
EBITDA	2	60	0	0
Margin	11%	61%	-3%	-1%
Other income	7	11	1	20
Interest	0	2	1	1
Depreciation	0	1	1	1
Profit before tax	8	69	-2	18
Tax rate	29%	10%	-40%	21%
Net profit	6	62	-1	14
EPS	0.51	5.34	-0.11	1.24

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

Dividend ₹0.75/share (interim) Payout ratio 12.5%

We've declared a dividend of 15%, INR0.75 per share. So, we'll welcome every shareholder with a dividend. Our payout ratio has been increased from last year of about 10% to 12.5%.
Liquidity Liquidity disclosed Net worth on the balance sheet stands at INR633.6 crores as of June 30, 2026.

The net worth of the company as on 30th June 2026 is INR633.6 crores versus INR534 crores as of previous year.

Guidance & targets

Fundraising

Fund V Commitments Fundraising · over a closed-ended term of 10 years · High confidence INR2,500 crores

So, the flagship strategy, that is basically a continuation of what the work we've been doing so far, is INR2,500 crores. It may increase a bit. So, that's the flagship strategy.

— Ranjit Shah
Eastgate (Secondaries) Commitments Fundraising · over a closed-ended term of 5 years · High confidence INR1,500 crores

And the secondary strategy is INR1,500 crores.

— Ranjit Shah

Fund Performance

Hurdle Rate (Rupee Investors) Fund Performance · ongoing · High confidence 10%

For rupee investors, it's 10%, and for dollar investors, it's 8%.

— Gopal Jain
Hurdle Rate (Dollar Investors) Fund Performance · ongoing · High confidence 8%

— Gopal Jain

Profitability

Profit Trendline Profitability · historical · High confidence 35%

Our profits have grown between March '24 to March '26 from INR45 crores to roughly INR82 crores. So, our historical profit trend-line has been 35%, our total income trend-line has been 23%.

— Gopal Jain

Revenue

Total Income Trendline Revenue · historical · High confidence 23%

Our profits have grown between March '24 to March '26 from INR45 crores to roughly INR82 crores. So, our historical profit trend-line has been 35%, our total income trend-line has been 23%.

— Gopal Jain

What to watch in Q2 FY27

Fund V Fundraising Progress

next quarter

Current Seeking commitments of INR2,500 crores

Target Update on commitments received and first close

Why it matters

Successful fundraising for Fund V is crucial for future fee income and performance income generation.

Fund V is the continuation of our established flagship strategy. We are seeking commitments of INR2,500 crores over a closed-ended term of 10 years.

Risks & concerns

Lumpiness of performance income
medium

Performance income can vary quarter-to-quarter, but management emphasizes that it becomes more predictable and smooths out when viewed on an LTM or annual basis, especially as the firm matures and funds diversify.

Analyst acknowledged
Fund III's 9% IRR compared to market returns
low

Analyst questioned Fund III's 9% IRR. Management clarified this is CRISIL data, compared to a relevant cohort, and ranks in the first quartile. They also highlighted Fund IV's 29% gross IRR and older funds' higher MOICs.

Analyst downplayed

Q&A highlights

7 direct

Fund IV deployment and future investments Direct

In Fund IV, until June of 2026, we had made seven investments. Since then, another couple of our investments have been in the news. And but for the moment, I'd like to just stick to those seven investments. And, we were 75% deployed as on June. Since then, we've made another call, which has taken the deployment to 81%. Going forward as well, we intend to follow a strategy very consistent with our historical strategy, and we will make 10 to 12 investments from Fund V as well.

Clarifies the current deployment status of Fund IV and the investment strategy for the upcoming Fund V, providing visibility on future activity.

Asked by Siddhant Lodaya

Proportion and trend of performance income vs. total income Direct

If you look at mature companies, performance income grows over a period of time. Performance, by nature, if you just read the word, is a very high quality aspect. So, the quality of a private equity fund management firm is determined by the level of performance income. And over a period of time, performance income becomes highly predictable.

Management explains that performance income is a key growth driver for mature firms and becomes more predictable over time, addressing concerns about its lumpiness.

Asked by Mithun Aswath

Carried interest from Fund III and hurdle rates Partial

It's too early to say because, generally, we carry valuations on a conservative basis. We've generally seen this trend that we you know, we've carried NAVs on a conservative basis. I don't want to make forward-looking statements, but we believe that just as we have earned substantially on earlier two funds, we will continue with our performance income trends from Fund III as well.

Analyst questions the low 9% gross IRR for Fund III, and management indicates it's too early to predict carried interest but expresses confidence in overall performance trends, highlighting the conservative valuation approach.

Asked by Soumil Zaveri

AI investment strategy and entry valuations Direct

So, typically we invest in 50 to in companies that have an enterprise value of USD50 million to USD200 million. That is considered growth stage. But for a sector like AI, the numbers are getting completely redefined.

Provides insight into Gaja's investment criteria for AI companies, emphasizing growth stage investments and the unique valuation dynamics of the AI sector.

Asked by Abhi Jain

Lumpiness of performance income and judging performance Direct

So, as we discussed in an earlier question as well, our performance should be best judged on a year-on-year basis. It will show a smooth, linearity in numbers, and that's a better way to see it. Some quarter variations could be expected, although, they will be going forward, minimized as much as possible as the funds diversify.

Management reiterates that while quarterly performance income can be lumpy, a year-on-year or LTM view provides a smoother and more accurate picture of the firm's performance.

Asked by Jyothish Vijayan

Breakdown of performance fee and management fee basis Direct

So, in Q1 FY27, INR13 crores came from Fund II, which is in the carried interest territory, and INR17 crores came from Fund III and Fund IV, which is in the sponsor gains category. So, this makes up close to INR29.7 crores, that's been reported as performance income. ... we are currently earning management fee from Fund III and Fund IV, and the respective sizes are given in our investor deck. And it's roughly order of magnitude close to the fee-paying initial committed capital. This is not the AUM, because we only earn fee on initial committed capital, is roughly order of magnitude about INR3,200 crores.

Provides a clear breakdown of performance income sources for Q1 FY27 and clarifies the basis for management fees, which is on initial committed capital rather than AUM.

Asked by Devesh Agarwal

Fund III's 9% IRR performance compared to market returns Direct

Now, what is the set that we have taken for saying that we are in the first quartile for this 9%? And this is the last 10 years' performance that we are talking about. So, just wanted to understand what we are comparing with and how 9% is a good return, which is in the first quartile. So, these are not our numbers. This is CRISIL data. And in our industry, you refer to funds on a cohort basis. So, our fund has been compared to a relevant cohort by CRISIL. This is publicly available data.

Addresses analyst's concern about Fund III's 9% IRR by clarifying it's based on CRISIL data and compared against a relevant cohort, emphasizing that it ranks in the first quartile.

Asked by Ankit

Vision for future earnings and AUM profile with new funds Direct

So, from the information that we've already disclosed, on this call, we mentioned that our fee-paying capital currently is INR3,200-odd crores. From the presentation see, and we've mentioned this, that our Fund V is INR2,500 crores, and our Eastgate Secondaries is INR1,500 crores. So, that's a proposed addition of INR4,000 crores to the INR3,200 crores number we have spoken about. Secondly, so that's just the quantitative part. There's the qualitative part, too. So, we will be deriving economics currently from three funds, it will become five funds. Strategies from one will become two.

Management outlines the quantitative and qualitative impact of Fund V and Eastgate on the company's fee-paying capital and diversification of strategies.

Asked by Manish

3 min read 7 chapters

Detailed narrative

Q1 FY27 Financial Performance Overview

Gaja Capital delivered robust financial results for Q1 FY27. Total income for the quarter grew 26% year-on-year to INR51.8 crores, while on a last 12-month basis ending June '26, total income increased 39% to INR168.4 crores. Profit after taxes (PAT) for Q1 FY27 rose 35% quarter-on-quarter to INR27.2 crores, and LTM PAT grew 38% to INR89.1 crores. The company's cost-to-income ratio improved to 38.4% from 42.3% in the prior year, reflecting operational efficiency.

Business Model and Income Streams

As a fund manager, Gaja Capital generates income from management fees, carried interest, and sponsor gains. Management fees are fixed and earned on committed capital, while performance income (carried interest and sponsor gains) is earned once hurdle rates are achieved. For Q1 FY27, performance income was INR29.7 crores, comprising INR13 crores from Fund II (carried interest) and INR17 crores from Fund III and IV (sponsor gains). The company retains 100% of these economics, contributing to a 50%-plus PAT profit business.

Fund Performance and Future Strategies

Gaja Capital's mature funds (Fund I and II) have generated 5x and 3.8x multiples on invested capital, respectively, ranking in the top decile. Fund IV, 75% deployed as of June and now 81% deployed, is tracking a gross IRR of 29% and a gross multiple of 1.8x. The company has received SEBI approval for Fund V, targeting INR2,500 crores over a 10-year term, and is launching Eastgate, a secondaries strategy seeking INR1,500 crores over 5 years. These initiatives aim to expand the platform and diversify income streams.

IPO Success and Brand Building

The company recently completed its IPO, raising INR575 crores of primary capital for growth. The IPO was significantly oversubscribed by 33 times, attracting close to 1.7 million applications and strong institutional interest. Management noted that the IPO has significantly expanded the brand in the country, positioning Gaja Capital as a preeminent national brand in India's fast-growing financial services industry. This success is built on 22 years of operations and a global franchise across 20 countries.

Investment Philosophy and AI Sector Focus

Gaja Capital invests in high-growth, innovation-led, mid-market companies in India, focusing on four sectoral themes. The firm typically invests in growth-stage companies with enterprise values ranging from USD50 million to USD200 million. While not disclosing specific fund investments, management acknowledged investments in AI companies like Fractal Analytics and Sarvam AI, noting their growth-stage nature and conservative valuations relative to the broader IT sector. The company maintains a disciplined approach, not allocating more than 20-25% of capital to any single sector.

Capital Allocation and Shareholder Returns

The company declared an interim dividend of 15%, equating to INR0.75 per share, and increased its payout ratio from approximately 10% to 12.5%. Gaja Capital's net worth stood at INR633.6 crores as of June 30, 2026, with an ROE of 15.3%. The firm's sponsor commitment across its funds is approximately INR589 crores, representing 7.1% of the total fund size, which is substantially above SEBI minimum thresholds, ensuring strong alignment with investors.

Management's Stance on Future Guidance and Volatility

Management explicitly stated a policy of not issuing future guidance, citing the nature of their business and global best practices. They emphasized that while quarter-to-quarter performance income can be lumpy, the overall trend is smooth and predictable when viewed on an LTM or annual basis, especially for a firm of their maturity with multiple funds. They encouraged investors to evaluate performance based on historical trendlines, such as the 35% CAGR in profits and 23% total income trendline between March '24 and March '26.

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

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