Manba Finance

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.

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.

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.

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.

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.

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%.

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.