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    LAXMIINDIA

    LAXMIINDIA
    Financial Services·19 Nov 2025
    Management Summary

    Laxmi India Finance Limited reported a strong H1 FY26 with AUM growing 24.75% YoY to INR1,386.49 crores, bolstered by a successful IPO that infused INR151.58 crores and boosted CAR to 31.90%. The company's cost of borrowing declined to 11.10%, supporting margin improvement. Despite a sequential rise in NPAs attributed to floods and a Q2 cash crunch, management is confident in recovery, particularly from the secured book with a healthy LTV of 35%. The company is strategically expanding its branch network and focusing on digital payment modes to enhance efficiency and customer experience.

    Highlights

    5

    • Assets Under Management (AUM) crossed INR1,386.49 crores, reflecting a 24.75% year-on-year growth.

    • Successful IPO completion led to an equity infusion of INR151.58 crores, significantly strengthening the balance sheet and improving Capital Adequacy Ratio (CAR) to 31.90%.

    • Cost of borrowing continuously trended downwards to 11.10%, a 63 basis points reduction year-on-year.

    • Adjusted PAT (before IPO expenses) for H1 FY26 stood at INR21.72 crores, demonstrating a 42% year-on-year growth.

    • Management is confident in recovering sequential NPA increases due to a highly secured book with a healthy LTV of 35% on NPA cases.

    Concerns

    3

    • Sequential jump in NPAs attributed to floods in Rajasthan/Madhya Pradesh and a general Q2 cash crunch.

    • Stress observed in the heavy commercial vehicle segment, leading to a strategic shift in product mix.

    • Disbursements saw a slight sequential drop in Q2 FY26 to INR145 crores from INR166 crores in Q1 FY26, primarily due to weather conditions.

    What Changed1

    vs Q3 FY26

    Guidance items7 → 9 (+2)
    Key financials

    Metrics

    17

    Periods

    3

    Headline

    13
    • AUM
      ₹1,386.49 Cr
      YoY+24.8%
    • Net Worth
      ₹435 Cr
    • Capital Adequacy Ratio
      31.9%
    • Cost of Borrowing
      11.1%
    • Yield
      22.2%

    Q2 FY26

    1
    • Disbursements
      ₹145 Cr
      QoQ-12.7%

    H1 FY26

    3
    • PAT
      ₹19.06 Cr
      YoY+24.7%
    • Adjusted PAT
      ₹21.72 Cr
      YoY+42%
    • Disbursements
      ₹311 Cr

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    Cost 11.1%

    Liquidity

    Cash ₹197.58 crores · Undrawn ₹406 crores

    Sufficient liquidity to cater to almost three to four months of disbursement requirements, along with undone sanctions.

    Guidance & targets

    9
    CategoryTargetPriority
    AUM
    AUM Growth CAGR
    better numbers, better CAGR
    		Medium
    AUM
    AUM Growth
    sustainable growth
    		High
    Asset Quality
    NPA numbers
    downturn towards NPA numbers
    		High
    Product Mix
    MSME loan focus
    80% to 85%
    		High
    Branch Expansion
    New branches to open
    29
    		High
    Branch Expansion
    Entry into new state
    one more state
    		Medium
    Branch Profitability
    Breakeven for new branches (AUM based)
    7 to 8 months with AUM of 1.5 crores
    		High
    Branch Profitability
    Breakeven for new branches (all expenses)
    within 1.5 years
    		High
    Cost of Borrowing
    Cost of borrowing
    cut down this cost more
    		Medium

    NPA reduction and recovery

    next quarter
    CurrentGNPA 1.59%, LTV on NPA cases 35%
    Targetdowntrend towards NPA numbers

    Why it matters

    To verify management's confidence in recovering the recent sequential increase in NPAs, which was attributed to temporary external factors.

    So in the future, what we are expecting is that this will be recovered because our 98.2% book is secured and with a very healthy LTV of 45%. And if we take a talk about the NPA cases, so, our NP cases, LTV stood for 35%, which is very healthy. Our collection officers are very confident that this coming quarter -- so, this quarter and next quarter, we will be recovering it. And there will be a good downturn towards NPA numbers.

    How to verify

    key_financials.metrics[label='GNPA']

    Risks & concerns

    3
    RiskSeverity

    Sequential jump in NPAs due to external factors

    NPAs increased by 0.30 basis points sequentially due to floods in rural areas of Rajasthan and Madhya Pradesh and a general Q2 cash crunch. — Management acknowledged

    medium

    Stress in heavy commercial vehicle segment

    The heavy commercial vehicle segment was 'painful' and facing pressure, leading to a strategic shift away from this product. — Management acknowledged

    medium

    Seasonal impact on collections and demand

    Q1 was slow due to school fees, Q2 due to floods. However, Q3/Q4 are expected to be good due to Diwali season and improved demand. — Analyst acknowledged

    low

    Q&A highlights

    7

    “this quarter has shown a little bit of a jump of 0.30 basis because of two, three reasons. So, because first reason is that the flood which has come to the area where we are operating... Second, a little bit of cash crunch was there in a Q2... So in the future, what we are expecting is that this will be recovered because our 98.2% book is secured and with a very healthy LTV of 45%.”

    Addresses a key concern about asset quality, providing specific reasons for the increase and confidence in future recovery due to strong collateral.

    asked by Akash Jain

    2 min read6 chapters

    Detailed Narrative

    01

    Strong AUM Growth & Portfolio Expansion

    Laxmi India Finance Limited achieved a significant 24.75% year-on-year growth in its Assets Under Management (AUM), reaching INR1,386.49 crores as of September 30, 2025. This growth was supported by healthy disbursements, with H1 FY26 disbursements totaling INR311 crores, though Q2 FY26 saw a slight sequential drop to INR145 crores due to weather conditions. The company expanded its footprint to 164 branches across five states, adding 6 new branches in H1 FY26, with plans for 23 more and entry into a new state by year-end.

    02

    IPO Bolsters Capital Adequacy and Liquidity

    The successful completion of an IPO resulted in an equity infusion of INR151.58 crores, significantly strengthening the company's balance sheet. This boosted the Capital Adequacy Ratio (CAR) to 31.90%, positioning the company for responsible scaling in the coming years. The company maintains strong liquidity with INR197.58 crores as of September 30, 2025, and undrawn sanctions of INR406 crores as of October 30, 2025, ensuring sufficient funds for future disbursement requirements.

    03

    Improving Profitability and Cost of Funds

    The company reported a PAT of INR19.06 crores for H1 FY26, representing a 24.74% year-on-year growth. Adjusted for IPO-related expenses of INR2.66 crores, the PAT stood at INR21.72 crores, a 42% YoY increase. The cost of borrowing continued its downtrend, reaching 11.10%, a 63 basis points reduction YoY. This improvement, coupled with a yield of 22.18% and a spread of 10.88%, enhances the company's margin while maintaining competitive customer pricing.

    04

    Asset Quality Challenges and Recovery Confidence

    The company experienced a sequential jump in GNPA to 1.59%, attributed to floods in rural areas of Rajasthan and Madhya Pradesh and a general cash crunch in Q2. Management noted stress in the heavy commercial vehicle segment, leading to a strategic shift. Despite this, the company expressed high confidence in recovery, citing a healthy LTV of 35% on NPA cases and 45% on the overall book. The Provision Coverage Ratio (PCR) stands at 47.22%, and credit cost is 0.72%.

    05

    Strategic Product Mix and Digitalization Efforts

    Laxmi India Finance is maintaining its focus on secured lending, with MSME loans constituting 80-85% of its portfolio, primarily small ticket sizes. The company is actively moving away from heavy commercial vehicles, instead targeting personal vehicles and LCV segments. Digitalization efforts are underway, with increased adoption of UPI payments for collections, which is improving efficiency and reducing risk. The Laxmi Mitra app is also being enhanced to onboard vendors and generate leads.

    06

    Customer Sentiment and Market Dynamics

    Customer sentiments are reported to be positive, driven by the recent festival season and expected increase in agricultural output. The new GST regime has also boosted the industry. Management noted that the demand from the customer side is increasing across all states, with improved liquidity positions at the ground level. This positive sentiment is expected to contribute to sustainable growth in Q3 and Q4.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.