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Manba Finance Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Manba Finance reported robust Q3 FY26 results with strong AUM growth of 25% YoY to Rs. 1,631 crores and record quarterly disbursements of Rs. 347 crores. Net Interest Income for the quarter rose 17% YoY to Rs. 42 crores, while 9M PAT increased 15% YoY to Rs. 34 crores. The company maintained a healthy Capital Adequacy Ratio of 25.06% and stable asset quality with Gross NPA at 3.38%. Management highlighted the launch of a new MSME LAP product and strategic partnership with TVS Motor Company, though noted collection issues in the EV three-wheeler passenger vehicle category.

Highlights

Assets Under Management (AUM) grew 25% YoY to Rs. 1,631 crores as of December 31, 2025.
Q3 FY26 saw a record high disbursement of Rs. 347 crores, representing a 48.90% quarter-on-quarter increase.
Net Interest Income for Q3 FY26 increased 17% YoY to Rs. 42 crores.
Profit After Tax (PAT) for the nine months ended December 2025 increased 15% YoY to Rs. 34 crores.
Capital Adequacy Ratio remained healthy at 25.06%, well above regulatory requirements.

Concerns

Profit for Q3 FY26 (Rs. 13 crores) did not increase proportionately to Net Interest Income growth, attributed to timing of income recognition for seasonal business.
Collections in the EV three-wheeler passenger vehicle segment are facing issues due to vehicle quality standards from local manufacturers.

Key financials

2 periods

Headline

AUM
₹1,631 Cr
YoY +25%
Total Balance Sheet Size
₹1,771 Cr
Gross NPA
3.4%
Net NPA
2.6%
Capital Adequacy Ratio
25.1%
Average Cost of Borrowing
10.1%
Net Interest Margin
12.7%
Gross Yield
22.8%
PCR
24%
Total Outstanding Borrowing (Dec)
₹1,350 Cr
Securitization Portfolio (Dec)
₹150 Cr

Q3

Disbursement
₹347 Cr
QoQ +48.9%
Net Interest Income
₹42 Cr
YoY +17%
PAT
₹13 Cr

What they filed

Q1 FY27: revenue up 38.8%, net profit up 30.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	65	69	68	67	78 +20%	90 +30%	93 +37%	93 +39%
Expenses	21	23	27	23	26	30	33	32
Other income	0	0	0	2	0	0	0	0
Interest	27	28	29	32	35	42	43	44
Depreciation	1	1	1	1	1	1	1	1
Profit before tax	16	16	11	12	15 −6%	17 +6%	17 +55%	16 +33%
Tax rate	27%	21%	28%	20%	25%	24%	34%	18%
Net profit	12	13	8	10	11 −8%	13 +0%	11 +38%	13 +30%
EPS	2.32	2.58	1.60	1.94	2.27	2.60	2.22	2.64

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.

Segment breakdown

Portfolio Mix
92.3% Core Manba Business3.9% Co-lending Partnership3.8% DA and BC Arrangement
Product Mix
85.9% Two-wheeler4.2% Small Business Loan4% Top-up Loan3% Three-wheeler1.4% Used Vehicle Loan

Capital allocation

high confidence

Debt Gross ₹1,350 Cr Cost 10.1%

So, borrowing cost is being reduced. It was like earlier it was just a second. Yes, it has been reduced from 10.80 to 10.12. And we are reduced to 10.12 as of December 2025. So, because of the reduction in the borrowing cost, there will be growth in the NIM margin going forward. ... So, as on December, outstanding was around Rs. 1,350 crores.
Liquidity Liquidity disclosed Company reported no negative mismatch across any time buckets in its ALM statement filed with RBI. Healthy liquidity of Rs. 400 crores was maintained in September for seasonal business.

Importantly, as per the structure ALM statement filed with the RBI, the company reported no negative mismatch across any time buckets, highlighting the strength of our liquidity management framework. ... So, we were at healthy liquidity of Rs. 400 crores by borrowing the funds in the month of September.

Guidance & targets

Profitability

NIM margin Profitability · Going forward · Low confidence Growth

So, because of the reduction in the borrowing cost, there will be growth in the NIM margin going forward.

— Jay Mota
PAT Profitability · FY27 · High confidence ₹65-70 crores

Previously ₹100 crores → ₹65-70 crores

No, we have not told Rs. 100 crores. It was at 27-28. So, next year, we are targeting anything around Rs. 65 crore to Rs. 70 crore. And after that, it will be.

— Manish Shah
ROA Profitability · Next year (FY27) · High confidence 3.25-3.5%

That is nice. So, that would be approximately ROA for next year would be around, can you guide that? ... 3.25-3.5.

— Manish Shah
ROE Profitability · Next year (FY27) · High confidence 14%-15%

And so, that would be ROE of around 15%. That is right? ... ROE of 14%-15%. Right.

— Manish Shah

AUM

AUM AUM · FY26 · High confidence ₹1,700-1,750 crores

So, in my previous calls also, we have discussed and I have told that we will end this FY '26 by Rs. 1,700 crore to Rs. 1,750 max.

— Manish Shah

Growth

Year-on-year growth Growth · Year-on-year · Medium confidence 25%-30%

But, yes, the company is always been focusing on a growth of 25%-30% year-on-year.

— Manish Shah

Product Launch

MSME LAP launch date Product Launch · Q4 FY26 · High confidence February 10, 2026

On 10th of February, we are launching a LAP, it is a MSME LAP.

— Manish Shah
MSME LAP loan amount range Product Launch · High confidence ₹5 lakhs - ₹20 lakhs

maximum loan amount will be 20 lakhs. Minimum will be Rs. 5 lakh.

— Manish Shah

Capital Adequacy

Leverage (CAR) Capital Adequacy · High confidence Remain at 4 times

But as a policy, we don't want to leverage more than 4 times. We already reached 3.37. So, 4-4.25 that is what max we would like to go. ... So, we will try to remain at 4 times.

— Manish Shah

Asset Quality

PCR Asset Quality · This quarter onwards · High confidence 24%-26%

So, then we will strengthen our balance sheet by making it from 24%-25% or maybe 26%.

— Manish Shah

Strategic Partnership

TVS 3-wheeler disbursement Strategic Partnership · 18-24 months · High confidence ₹250-300 crores

what we are talking about 18-24 months, the disbursement, what we are expecting is around Rs. 250-Rs. 300 crores.

— Manish Shah
TVS 3-wheeler AUM contribution Strategic Partnership · After increment · Medium confidence 10% of total AUM

So, the way AUM will go to, for example, Rs. 3,000 crores year-on-year after increment, this will formulate around 10% of the total.

— Manish Shah

What to watch in Q4 FY26

NIM margin growth

Next quarter onwards

Current 12.65% (Q3 FY26)

Target Growth expected

Why it matters

Management expects NIM to grow due to reduced borrowing costs, which is crucial for profitability and overall financial performance.

So, because of the reduction in the borrowing cost, there will be growth in the NIM margin going forward.

Risks & concerns

Collection issues in EV three-wheeler passenger vehicles
medium

EV three-wheeler passenger vehicles from local manufacturers are facing collection issues due to vehicle quality standards, leading to a mixed scenario for this segment.

Management acknowledged
Market scenario for capital raise
medium

Plans to raise capital in Q2 or Q3 of next year are dependent on the prevailing market scenario, which is currently not favorable.

Management acknowledged
Competition in used four-wheeler segment
low

High competition and higher cost of borrowing make used four-wheeler financing challenging, prompting plans for co-lending partnerships to mitigate.

Management acknowledged

Q&A highlights

6 direct

Borrowing costs and NIM outlook Partial

So, borrowing cost is being reduced. It was like earlier it was just a second. Yes, it has been reduced from 10.80 to 10.12. And we are reduced to 10.12 as of December 2025. So, because of the reduction in the borrowing cost, there will be growth in the NIM margin going forward.

Analyst questioned perceived rising borrowing costs, and management clarified the reduction while also providing a directional outlook for NIM expansion.

Asked by Divyam Doshi

Discrepancy in borrowing and finance cost trends Direct

No, quarter-on-quarter, it has not come down. Only September quarter to December quarter, it has come down because September we have borrowed Rs. 410 crores in one month. And only those out of that Rs. 300 crores plus amount has been borrowed in the last week of September. So, that entire finance cost which has been not put in that September quarter, it has come down to December quarter. And because the season has gone, so we have not borrowed any new fund in the month of October and November. So, that is why, although the borrowing is reducing, but the finance cost is increasing this quarter.

Clarifies the timing mismatch between borrowing activities and finance cost recognition, explaining why finance costs increased despite a slight reduction in total outstanding borrowing.

Asked by Sudharsan Nachimuthu

Profitability not proportionate to NII/Total Income growth Direct

So, as we said earlier also, the business which we have done in the month of October, the main income will start coming from the month of December. So, this quarter onwards, you will see the increase in the net profit margin also. Major disbursement of Rs. 347 crores out of Rs. 740 crores has happened in this quarter only. And the income of this disbursement will start majorly from January. So, January, February, March, definitely will have a good interest income.

Explains that the lower-than-expected profit growth in Q3 was due to the timing of income recognition for seasonal disbursements, with full impact expected in the subsequent quarter.

Asked by Abhishek

Adequacy of Provision Coverage Ratio (PCR) Direct

So, basically, we have been kept 24% because our credit loss historically is less than 1%. But still, as already Jay mentioned that as per the RBI guidelines, we are much ahead of what we are supposed to. But as you rightly said, that industry is generally doing for 40%. We are gradually increasing. It was 10%, then made it 13%, 16%, 20%, and 24%. And this quarter, we are expecting that this quarter the profitability will support much. And we are also going to do one DA transaction also. So, then we will strengthen our balance sheet by making it from 24%-25% or maybe 26%.

Addresses analyst concern about PCR being below industry average and outlines management's plan to increase it to 24-26% to strengthen the balance sheet.

Asked by Jinal

Capital Adequacy Ratio deployment strategy Direct

So, capital adequacy today, as you rightly said, it is healthy. But as a policy, we don't want to leverage more than 4 times. We already reached 3.37. So, 4-4.25 that is what max we would like to go. Although we can go up to 5.5 or 6 times also. But as a policy, just to, in any kind of scenario, companies should be protected with all kind of natural calamity or anything. So, we will try to remain at 4 times. And by the time it will reach, we will reach for 4-4.25, we will definitely bring new capital.

Explains the company's conservative leverage policy (target 4-4.25x) and its strategy to raise new capital once this threshold is approached, ensuring protection against unforeseen events.

Asked by Devansh Shah

Disbursement potential from TVS Motor MoU Direct

what we are talking about 18-24 months, the disbursement, what we are expecting is around Rs. 250-Rs. 300 crores. So, the way AUM will go to, for example, Rs. 3,000 crores year-on-year after increment, this will formulate around 10% of the total.

Provides specific financial targets for the new strategic partnership with TVS Motor, indicating significant expected contributions to disbursement and AUM.

Asked by Tushar

EV financing share and asset quality Direct

As far as the performance is concerned, the two-wheeler EV is performing better, especially in these 4 brands like TVS iQube, Ather, then Ola and Chetak. These four vehicles are doing phenomenal. But as far as EV three-wheeler is concerned, there are some manufacturers who has been passenger rickshaw e. So, local manufacturers, but their vehicles are not to that standard. And after one year, it has started giving issues. So, we also find some issues in collections also in the EV three-wheeler passenger vehicles. So, I will say it is a mixed scenario so far.

Highlights a specific segment (EV three-wheeler passenger vehicles from local manufacturers) where asset quality is a concern, providing granular insight into portfolio risks.

Asked by Tushar

Direct Assignment (DA) transaction plans Partial

So, this is everything is under discussion. So, we will do one transaction in this quarter.

Indicates a new funding and portfolio management strategy (DA transactions) being explored, which could impact funding mix and balance sheet structure.

Asked by Sudharsan Nachimuthu

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Manba Finance reported a robust Q3 FY26, with Assets Under Management (AUM) reaching Rs. 1,631 crores, marking a 25% year-on-year growth. The total balance sheet size stood at Rs. 1,771 crores. Disbursements for the quarter were a record high of Rs. 347 crores, representing a 48.90% quarter-on-quarter increase, driven by festive demand. Net Interest Income for Q3 was Rs. 42 crores, up 17% YoY, while Profit After Tax (PAT) for the quarter was Rs. 13 crores. For the nine months ended December 2025, Net Interest Income grew 19% YoY to Rs. 110 crores, and PAT increased 15% YoY to Rs. 34 crores.

Asset Quality and Provisioning Strategy

The company maintained stable asset quality with Gross Non-Performing Assets (NPA) at 3.38% and Net NPA at 2.57% as of December 31, 2025. Credit costs remained below 1%, supported by a strong collection engine and underwriting process. The Provision Coverage Ratio (PCR) stood at 24%, which management acknowledged is below the industry average of 40% but stated it is above RBI guidelines. The company plans to gradually increase PCR to 24-26% to further strengthen its balance sheet, especially with upcoming direct assignment transactions.

Funding Mix and Cost of Borrowing

Manba Finance's average cost of borrowing has gradually declined to 10.12%, benefiting from improved credit ratings and favorable market conditions. NCD borrowing costs are at 10.65%, while term loan costs are around 11%. Total outstanding borrowing as of December was approximately Rs. 1,350 crores, with Rs. 456 crores in fixed-cost term loans and a Rs. 150 crore securitization portfolio. The company aims for 40-45% of its total borrowing to be unaffected by interest rate changes, primarily through fixed-cost instruments like NCDs and PTC transactions.

Product Portfolio and New Offerings

The current product mix is heavily weighted towards two-wheeler loans at 85.91%, with small business loans (4.22%), top-up loans (4%), three-wheeler loans (3.05%), and used vehicle loans (1.38%) making up the rest. The company is launching a new MSME LAP product on February 10, 2026, with loan amounts ranging from Rs. 5 lakhs to Rs. 20 lakhs, initially in Mumbai and Pune. While used two-wheeler financing is being gradually focused on due to less competition, used four-wheeler financing faces challenges due to competition and higher borrowing costs, prompting plans for co-lending partnerships.

Strategic Partnerships and Expansion

Manba Finance recently entered a strategic MoU with TVS Motor Company to enhance collaboration across the dealer ecosystem and expand its reach in the three-wheeler financing segment. The company aims to add 20 dealerships monthly, targeting 75 replacements within the next two quarters, with an expected disbursement of Rs. 250-300 crores over 18-24 months. This initiative is projected to contribute around 10% to the total AUM. The company continues to deepen its presence in existing states like Uttar Pradesh and Madhya Pradesh rather than expanding to new states.

Capital Adequacy and Future Growth Outlook

The Capital Adequacy Ratio stands at a healthy 25.06%, providing ample headroom for future growth. Management maintains a conservative policy of not leveraging more than 4-4.25 times, aiming to protect the company in various scenarios, and plans to raise new capital once this level is reached. The company targets a year-on-year growth of 25-30% and projects a PAT of Rs. 65-70 crores for FY27, with an ROA of 3.25-3.5% and an ROE of 14-15%.

EV Financing Performance

The company's EV portfolio currently contributes 7-9% to its total AUM, similar to the industry average. While two-wheeler EV financing, particularly for brands like TVS iQube and Ather, is performing well, the EV three-wheeler passenger vehicle segment from local manufacturers is experiencing collection issues due to vehicle quality standards. This indicates a mixed performance within the EV financing portfolio, with specific challenges in the three-wheeler EV segment.

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

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