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    India Shelter Finance Corporation Q1 FY27 earnings call

    INDIASHLTR
    Financial Services·7 Aug 2026
    Management Summary

    India Shelter Finance reported a robust Q1 FY27 with 24% YoY AUM growth and 23% YoY PAT growth, despite a one-time accounting change impacting reported disbursements. Asset quality saw an increase in Stage 3 assets to 1.5%, which management attributes to seasonality and expects to stabilize by Q2 FY27 with resolution from Q3 FY27. The company reiterated its FY27 guidance for 25-30% loan growth and 40-50 bps credit cost, driven by continued branch expansion and AI adoption.

    Highlights

    5

    • Gross AUM grew 24% year-on-year to INR 11,284 crores.

    • PAT for the quarter came in at INR 143 crores, registering a growth of 23% year-on-year and 4% quarter-on-quarter.

    • Return on equity for the quarter stood at 17.5%.

    • Portfolio yield remained stable at 14.8% quarter-on-quarter basis.

    • Net interest income for the quarter is up by 30% on the back of growth in AUM and 20 bps improvement in spread year-on-year basis.

    Concerns

    3

    • Reported disbursement for the quarter stood at INR 641 crores, impacted by a one-time accounting change from check handover to check realization.

    • Stage 3 assets increased to 1.5% and early delinquency buckets also saw an increase during the quarter, up 30 bps.

    • Collection efficiency was noted to be around 97%, with April being slightly lower at 96.2-96.4%.

    Key financials

    Single quarter

    16 metrics
    1. 01Gross AUM₹11,284 Cr+24%YoY
    2. 02Reported Disbursements₹641 Cr
    3. 03Bank Clearance Disbursements₹1,040 Cr+37%YoY
    4. 04PAT₹143 Cr+23%YoY
    5. 05ROE17.5%

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Liquidity

    Cash ₹800 crores · Undrawn ₹1,500 crores

    The company is comfortably placed with liquidity of more than INR 800 crores and undrawn sanction of more than INR 1,500 crores. ALM is positive across all buckets. They drew down INR 172 crores from National Housing Bank in June '26 at 7.3%. The borrowing profile is diversified with more than 30 counterparties. Share of NHB funding is at 15%, up by 230 bps year-on-year. Average borrowing tenure is more than 8 years, co-terminus with loan assets. On the liability side, 20% is at fixed rate, 33% repo/T-bill linked, and the rest MCLR/PLR linked. A large part of funding is linked to 3-month MCLR.

    Guidance & targets

    7
    CategoryTargetPriority
    Branch Expansion
    Branch additions
    40-45
    		High
    Profitability
    Spreads
    >6%
    		High
    Profitability
    ROE
    17-18%
    		High
    Asset Quality
    Credit Cost
    40-50 bps
    		High
    Asset Quality
    Stage 3 Assets
    stabilize around similar levels
    		High
    Asset Quality
    Credit Cost
    50 bps
    		High
    Loan Growth
    Loan growth (AUM)
    25-30%
    		High

    What to watch in Q2 FY27

    4

    Asset Quality (Stage 3 assets)

    end of Q2FY27
    Current1.5%
    TargetStabilization around similar levels

    Why it matters

    Monitoring the stabilization of Stage 3 assets is crucial for assessing the effectiveness of collection efforts and the overall health of the loan book.

    We expect Asset Quality to stabilize around similar levels at the end of Q2FY27 and expect recovery from Q3FY27 onwards.

    Risks & concerns

    2
    RiskSeverity

    Increase in Stage 3 assets and early delinquencies

    Stage 3 assets increased to 1.5% and early delinquency buckets rose, attributed to seasonality and stress in self-employed segment. Management expects stabilization by Q2 FY27 and recovery from Q3 FY27. — Management acknowledged

    medium

    Impact of disbursement recognition accounting change on reported numbers

    A one-time accounting change from check handover to check realization temporarily impacted reported disbursements (INR 641 crores vs INR 1,040 crores bank clearance). No P&L impact, confident of catching up. — Management downplayed

    low

    Q&A highlights

    6

    “I think when we talk about the current month, we just saw the July getting over. That has been good in terms of disbursement pickup. In fact, July had a better number than the March number, July we have done around Rs. 400 Crs of disbursement in fact under the cheque realization methodology. And if we continue to maintain this trend, which we are quite confident about, I think we should be in position to cross 20% mark in disbursement growth. And obviously, 25%, 30% is the AUM target that we have taken for this year, which we will be working towards that.”

    Clarifies how the company plans to achieve its AUM growth target despite the reported disbursement impact from the accounting change, providing a specific July disbursement figure.

    asked by Kunal Shah

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    India Shelter Finance reported a gross AUM of INR 11,284 crores as of June 2026, marking a 24% year-on-year growth. Net interest income increased by 30% YoY, supported by AUM growth and a 20 bps improvement in spreads. PAT for the quarter stood at INR 143 crores, reflecting a 23% YoY and 4% QoQ growth. The company maintained a healthy Return on Equity (ROE) of 17.5% and a stable portfolio yield of 14.8%.

    02

    Disbursement Accounting Change and Growth Outlook

    The company transitioned its disbursement recognition from check handover to check realization, impacting reported Q1 FY27 disbursements to INR 641 crores. However, disbursements on a bank clearance basis were INR 1,040 crores, comparable to Q4 FY26 and 37% higher than Q1 FY26. Management clarified this is a one-time📎 accounting change with no P&L impact and expressed confidence in achieving the FY27 AUM growth guidance of 25-30%, citing strong July disbursements of INR 400 crores.

    03

    Asset Quality Trends and Management Actions

    Stage 3 assets increased to 1.5% in Q1 FY27, up 30 bps, with early delinquency buckets also rising. Management attributed this to seasonality and stress in the self-employed customer segment, which constitutes over 80% of their portfolio. They expect asset quality to stabilize by the end of Q2 FY27 and anticipate recovery from Q3 FY27, maintaining their credit cost guidance of 40-50 bps for the year, supported by a low LGD and a dedicated collection team of 1,000 employees.

    04

    AI and Technology Initiatives

    India Shelter is actively adopting AI across various functions, including business, credit, collections, operations, compliance, and marketing. Initiatives include AI-enabled work assistance, AI-assisted collection voice calls, and voice/chatbots in vernacular languages. These efforts aim to enhance productivity, customer experience, risk management, and operational efficiency, with new employees being added to support these tech initiatives.

    05

    Funding and Liquidity Position

    The company's borrowing profile is diversified with over 30 counterparties. Liquidity remains strong with over INR 800 crores and undrawn sanctions exceeding INR 1,500 crores, ensuring a positive ALM across all buckets. The marginal cost of funds remained stable at 7.9% QoQ. The liability mix includes 20% fixed rate, 33% linked to repo/T-bills, and the remainder linked to MCLR/PLR, with a significant portion tied to 3-month MCLR.

    06

    Guidance Reiteration and Strategic Priorities

    Management reiterated its FY27 guidance: 40-45 new branch additions, maintaining spreads above 6% in the medium term, credit cost of 40-50 bps, and loan growth (AUM) of 25-30%. They emphasized their commitment to expanding distribution, strengthening technology, deepening customer relationships, and building organizational capabilities to capitalize on opportunities in the affordable housing finance market.

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