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    Manba Finance

    MANBA
    Financial Services·12 Nov 2025
    Management Summary

    Manba Finance delivered a strong H1 FY26, with Net Interest Income growing 21% YoY to INR 68 crores and Profit After Tax increasing 26% YoY to INR 21 crores. Asset under management reached INR 1,500 crores, reflecting 36% YoY growth, supported by record October disbursements and strategic expansion in small business loans. While facing a temporary profitability drag from excess liquidity in September and slower used car financing, management is proactively addressing these with new strategies and expects improved performance in H2 FY26, maintaining robust capital adequacy.

    Highlights

    5

    • Asset Under Management (AUM) reached INR 1,500 crores as of September 30, 2025, reflecting a robust 36% year-on-year growth.

    • Net Interest Income (NII) for H1 FY26 grew 21% YoY to INR 68 crores, and Profit After Tax (PAT) increased 26% YoY to INR 21 crores.

    • The company achieved a record disbursement of INR 175.40 crores in October 2025, the highest ever, driven by strong two-wheeler demand post-GST rate cuts.

    • Average cost of borrowing was reduced by approximately 100 basis points compared to March, with a target for further 25-50 bps reduction.

    • Capital Adequacy Ratio remains robust at 26.54%, providing ample cushion for future growth.

    Concerns

    3

    • QoQ AUM growth of 6% was lower than QoQ NII growth of 14%, partly attributed to the fast run-down of two-wheeler loans.

    • Used car financing segment is growing slower than expected, requiring a strategy change to a co-lending model.

    • Negative carry interest was incurred in September due to holding INR 400 crores of liquidity in anticipation of festival demand.

    Key financials

    Metrics

    9

    Periods

    3

    Headline

    5
    • AUM
      ₹1,500 Cr
      YoY+36%
    • Average Cost of Borrowing
      10.7%
    • Capital Adequacy Ratio
      26.5%
    • Stage 3 Assets (% of gross)
      3.5%
    • Net Stage 3 Assets (%)
      2.7%

    Q2 FY26

    1
    • Credit Loss
      1%

    H1 FY26

    3
    • Net Interest Income
      ₹68 Cr
      YoY+21%
    • Profit After Tax
      ₹21 Cr
      YoY+26%
    • Net Interest Margin
      12.6%

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Liquidity

    Liquidity disclosed

    INR 400 crores of liquidity was held in September for expected festival demand, leading to negative carry interest. This liquidity has now been deployed for new business.

    Guidance & targets

    5
    CategoryTargetPriority
    AUM
    AUM
    INR 1,700 crores to INR 1,750 crores
    		High
    Growth
    CAGR Growth
    30% to 35%
    		High
    Profitability
    Annual Profit
    INR 100 crores
    		Medium
    Small Business Loan Portfolio
    Unsecured SBL AUM
    INR 85 crores to INR 90 crores max
    		High
    Cost of Borrowing
    Cost of Borrowing Reduction
    25 to 50 basis points
    		High

    Used Car Financing Performance

    next quarter
    CurrentSlower than expected, INR 20 crores disbursed, strategy changing to co-lending.
    TargetImproved volume and customer profile with co-lending model.

    Why it matters

    To assess the effectiveness of the new co-lending strategy and its contribution to AUM and profitability.

    Used financing, it's going a little slow. I -- in fact, I will say slower than what we are expecting because the area, we have started only very, very few areas... So now we are changing the strategies. And now we are going on for used car with the co-lending model.

    How to verify

    detailed_narrative[title='Used Car Financing Strategy']

    Risks & concerns

    3
    RiskSeverity

    Slower-than-expected growth in used car financing

    Used car financing is 'going a little slow' and 'slower than what we are expecting' due to difficulty in finding right profile customers for target IRR, leading to a strategy change. — Management acknowledged

    medium

    Negative carry interest due to holding excess liquidity

    INR 400 crores liquidity held for festival demand caused negative carry interest in September, impacting Q2 profitability, but this liquidity is now deployed. — Management acknowledged

    low

    Marginal increase in Net Stage 3 assets

    Net Stage 3 assets increased marginally to 2.68% from 2.64%, indicating a minor increase in delinquency, but credit risk is 'overall contained'. — Management acknowledged

    low

    Q&A highlights

    6

    “October we all know that two-wheeler sale has been jumped by 50% and still after going for 50% there are lot of products and lot of dealers are still shortage of vehicle supply. So, that vehicle supply now it is coming up. So, November is also going well and because of the rate cut, the people who were supposed to buy in the year or two, they are now making their mind and coming forward to buy the new vehicle.”

    Highlights the significant positive impact of GST rate cuts on two-wheeler sales, leading to record October disbursements and a strong outlook for the coming quarters.

    asked by Mitul Shah

    2 min read6 chapters

    Detailed Narrative

    01

    Robust AUM Growth and Strong Disbursement Momentum

    Manba Finance demonstrated strong growth, with Asset Under Management (AUM) reaching INR 1,500 crores as of September 30, 2025, marking a 36% year-on-year increase. The company achieved a record-high disbursement of INR 398 crores during H1 FY26, up from INR 345 crores in the prior year. Notably, October 2025 saw a record disbursement of INR 175.40 crores, the highest ever for Manba Finance, primarily driven by a 50% jump in two-wheeler sales post-GST rate cuts, with strong momentum expected to continue.

    02

    Healthy Financial Performance in H1 FY26

    For the first half of FY26, Manba Finance reported a Net Interest Income (NII) of INR 68 crores, reflecting a 21% year-on-year growth. Profit After Tax (PAT) for the same period increased by 26% year-on-year to INR 21 crores. The Net Interest Margin (NIM) remained strong at 12.56%. For Q2 FY26 specifically, NII stood at INR 38 crores (9% YoY growth) and PAT was INR 11 crores, indicating healthy profitability despite a competitive operating environment.

    03

    Improving Funding Efficiency and Stable Asset Quality

    The company's average cost of borrowing was 10.67%, benefiting from improved lender relationships and favorable market conditions, with management targeting a further 25-50 basis points reduction in the coming quarter. Asset quality remained stable, with Stage 1 assets comprising 92.80% of the total portfolio. While Net Stage 3 assets marginally increased to 2.68% from 2.64%, the overall credit risk was contained, and credit loss for the quarter remained below 1%. Capital adequacy remains robust at 26.54%.

    04

    Strategic Expansion in Small Business Loans and Geographical Reach

    Manba Finance is actively expanding its small business loan (SBL) portfolio, which grew from INR 48 crores in Q1 to almost INR 70 crores. The company plans to launch MSME LAP, a secured loan product, by January, aiming for a blended yield of 20-21% (unsecured at 24-26%, secured at 18-19%). Geographically, the focus is on deepening presence in existing states like Uttar Pradesh, with 12 new locations added and 10-15 more in the pipeline, alongside new BC partnerships to enhance distribution without direct operational costs.

    05

    Technology-Driven Operational Enhancements

    The company continues to invest in digital initiatives to boost efficiency and customer experience. During the quarter, it launched instant disbursement via JustPay and implemented a straight-through process. Manba Finance also introduced HTP mode for used two-wheeler loans, a first in the industry, and integrated DigiLocker for seamless and paperless loan documentation, streamlining its operations.

    06

    Outlook on Profitability and AUM Targets

    Management anticipates a significant improvement in profitability during Q3 and Q4 FY26, as the INR 400 crores of liquidity held in September (which caused negative carry interest) has now been fully deployed for new business. The company reiterated its AUM target of INR 1,700 crores to INR 1,750 crores by the end of FY26, consistent with its long-term goal of 30-35% CAGR growth and an annual profit of INR 100 crores in the next two to three years.

    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.