Paisalo Digital Limited

Paisalo Digital reported a robust Q2 FY26, with Assets Under Management (AUM) growing 20% year-on-year to INR 54,494 million. Disbursements saw a significant 41% year-on-year increase, reaching INR 11,025 million. Total Income for the quarter was a record INR 2,240 million, up 20% YoY, while Net Interest Income (NII) grew 15% YoY to INR 1,262 million. Profit After Tax (PAT) increased 3% YoY to INR 515 million, demonstrating resilience despite continued operational expansion.

The company achieved a milestone of 13 million customer franchise, adding approximately 1.8 million customers in Q2 FY26. Its physical distribution network expanded significantly, with 383 new touchpoints added in Q2 alone, bringing the total to 402 branches, 2,585 distribution points, and 1,393 business correspondent points. This expansion is driven by geo-spatial analytics to identify high-potential regions, ensuring both growth opportunity and risk mitigation.

Paisalo is diversifying its product offerings, with pilots completed for new segments including loan against property, tractor, medical and equipment finance, and broader equipment lending. These new products are slated for roll-out in upcoming quarters. The company continues to leverage its OEM partnerships with leading names like Mahindra, Tata, and Honda, expanding its reach across various categories such as medical equipment, agriculture, and two-wheelers, enhancing customer acquisition and asset quality.

Paisalo has made significant strides in leveraging technology, particularly AI, to enhance operational efficiency and customer engagement. A Gen-AI-based calling system, powered by an NVIDIA chip, automates approximately 350,000 calls daily for EMI reminders and collection efforts. This system uses AI watch technology for smart scheduling and natural, human-like conversations, significantly enhancing borrower engagement and providing actionable insights through a real-time dashboard.

The company's capital structure was bolstered by the conversion of USD 4 million from its USD 50 million FCCB issuance in September 2025, increasing paid-up capital. The Capital Adequacy Ratio (CAR) stood robust at 38.2%, with Tier-1 at 30.3%, well above the RBI's 15% requirement. Gross NPA and Net NPA were well contained at 0.81% and 0.65% respectively. Management employs a disciplined, technology-led risk management approach, including a proprietary CCC model and postal code level credit monitoring, to maintain asset quality.

Paisalo aims to maintain its AUM growth at a CAGR of 20% for the next three years, targeting a doubling of AUM. The Net Interest Margin (NIM) is expected to be maintained at 6.5% for the full year. While the cost-to-income ratio may be slightly heightened in the immediate future due to investments, it is expected to stabilize within a couple of quarters. The long-term credit cost guidance remains sub 2% and sub 1%, with current levels at 0.8%.