KISSHT Q4 FY26 earnings call

OnEMI Technology Solutions Limited (Kissht) delivered a strong performance in Q4 and full year FY26. AUM grew by 73% year-on-year and 19% quarter-on-quarter, reaching ₹7,066 crore. For FY26, total income was ₹2,209 crore, up 63% year-on-year, and PAT grew 75% year-on-year to ₹281 crore. The company achieved a return on average assets of 5% and a return on average equity of 24% for the full year.

The company demonstrated significant improvement in asset quality, with Gross NPA reducing from 2.89% to 2.12% year-on-year, a 77 basis points improvement. Net NPA was contained at 0.29%. Collection efficiency remained robust, closing FY26 at 97.01% and improving to 97.15% in Q4. Impairment cost as a percentage of average AUM also decreased from 9.7% in FY25 to 8.2% in FY26, and further to 7% in Q4, reflecting better credit selection.

Kissht's underwriting stack incorporates over 7,000 variables, leveraging AI and ML models that have evolved to transformer-based AI models, achieving an AUC of 74%. This provides approximately 2.5 times more risk separation than traditional bureau-only approaches. The company also maintains a strong focus on collections with over 7,000 field agents and 1,000+ tele-callers, covering 17,000+ pin codes. AI voice agents in early-bucket tele-collections achieve over 70% human recovery efficiency, supported by a proprietary Automated Collection System.

The company strategically diversified into Loan Against Property (LAP) two years ago, driven by existing customer demand, with over 40% of LAP customers coming from the Kissht base. LAP AUM stands at ₹518 crore, contributing 7.3% to the total AUM, across 98 branches in 8 states. The LAP business is fully technology-enabled, utilizing model-based underwriting, smart document processing, and AI-validated property valuation, aiming for superior turnaround times rather than higher risk, maintaining a conservative LTV around 48%.

Kissht maintains a balanced and diversified funding structure, with almost 50% on-book and 50% off-book. On-book AUM is ₹3,556 crore, supported by 45+ lending partners with a cost of borrowing between 11.5% and 14.25%. The company secured an A- credit rating in February 2026, which has already led to a 200 bps improvement in marginal cost of borrowing. The NBFC subsidiary's capital adequacy is 25.3%, and net worth has grown to ₹1,343 crore, bolstered by ₹850 crore IPO proceeds, with 75% allocated to on-book capital and 25% to technology/AI infrastructure.

The company's total income yield as a percentage of AUM has moderated, a deliberate strategy to target higher-quality borrower segments. This approach is expected to lead to near-term yield compression but is offset by lower impairment costs and operational leverage. The portfolio yield in Q4 was 30-31%, with management expecting further reduction over the next four quarters. The average spread (yield minus cost of borrowing) is targeted to be 14-16% in the longer term, aiming for durable profitability driven by quality rather than volume.

For FY27, Kissht expects AUM to grow north of 40%, with disciplined asset quality and calibrated risk selection. The company targets Gross NPA below 2.25%, a 10-15% year-on-year reduction in impairment costs, and continued improvement in Stage-1 mix. Profitability targets include a return on average AUM in the range of 4.5%-5% and a return on average equity of 19-21%. The company also plans to add at least 80 more LAP branches by the end of FY27.