Paisalo Digital reported a strong Q3 FY26 with AUM growing 16% YoY to INR 55,082 million and PAT increasing 29% sequentially to INR 663 million. The company demonstrated improved asset quality with GNPA at 0.83% and NNPA at 0.66%, alongside a 92 bps reduction in cost of borrowing to 10.3%. However, disbursements grew a modest 7% YoY, and operating expenses outpaced NII growth, leading to a decline in ROA from 4.4% to 3.8%. Regulatory changes in co-lending also impacted other income.
vs Q4 FY26
| Metric | Value | YoY |
|---|---|---|
| AUM | 55082 million | +16.0% YoY |
| PAT | 663 million | +6.0% YoY |
| Total Income | 2401 million | +18.0% YoY |
| Net Interest Income | 1453 million | +19.0% YoY |
| Gross NPA | 0.83% | — |
| Net NPA | 0.66% | — |
| Metric | Latest | Trend |
|---|---|---|
| Total Income(million) | 2401 | |
| Gross NPA | 0.83% | |
| Net NPA | 0.66% | |
| Collection Efficiency | 98.5% | |
| Cost of Borrowing | 10.22% | |
| Debt-to-Equity Ratio(x) | 2.43 |
| Category | Headline | |
|---|---|---|
Debt | Gross ₹38,579 million Cost 10.3% | |
Liquidity | Liquidity disclosed Liquidity levels remain strong with surplus liquidity available, supporting expansion. |
| Category | Target | Priority |
|---|---|---|
| AUM | AUM Growth→Double AUM | High |
| AUM | AUM CAGR→25% | High |
| Income | Income Growth→Double income | High |
| PAT | PAT Growth→Double PAT | High |
| Asset Quality | NPA Levels→less than 2% | High |
| NIM | NIM Achievement→6% | High |
| Cost of Borrowing | Cost of Borrowing→10.5% | High |
| Operational Leverage | Operational Leverage→stabilization | Medium |
| Digital Initiatives | AI-enabled Public Customer App Rollout→first phase live | High |
| Geographical Diversification | State Contribution to Book→less than 20% per state | High |
| Partnerships | SBI Co-lending Partnership→start | Medium |
| # | Metric | |
|---|---|---|
| 01 | SBI Co-lending Partnership Launch | |
| 02 | AI-enabled Public Customer App Rollout | |
| 03 | ROA Improvement | |
| 04 | Operational Leverage Stabilization | |
| 05 | Geographical Diversification Progress |
| Severity | Risk |
|---|---|
medium | Regulatory changes impacting co-lending and other income New RBI policy for co-lending has temporarily impacted other income and delayed the SBI partnership, requiring additional compliance and system integration. Management |
medium | Operating expenses outpacing Net Interest Income growth Operating expenses grew 49% YoY, significantly higher than 19% YoY NII growth, due to investments in technology and distribution. Analyst |
medium | Decline in Return on Assets (ROA) ROA declined from 4.4% to 3.8% YoY, attributed by management to increased balance sheet size. Analyst |
medium | Geographical concentration of portfolio 90% of the portfolio is concentrated in five states (Delhi, Maharashtra, Haryana, Rajasthan, UP), posing a concentration risk. Analyst |
Paisalo Digital reported a robust Q3 FY26 with Assets Under Management (AUM) reaching INR 55,082 million, a 16% YoY growth. The company achieved its highest ever quarterly Profit After Tax (PAT) of INR 663 million, marking a 29% sequential growth and 6% YoY growth. Asset quality remained strong, with Gross NPA at 0.83% (27 bps YoY improvement) and Net NPA at 0.66% (18 bps YoY improvement), complemented by a high collection efficiency of 98.8%.
The company is embarking on a significant transformation journey with Artificial Intelligence (AI) at its core, aiming to double AUM, income, and PAT in the next three years while preserving asset quality. AI will be integrated across the entire lending lifecycle, from customer acquisition and underwriting to risk management and collections. The first phase of an AI-enabled public customer app is slated to go live by the end of Q3 FY27, enhancing digital engagement and self-service access.
Paisalo Digital successfully raised INR 1,885 million at a competitive cost of 8.5% in Q3 FY26 through NCDs and CPs. This contributed to a 92 bps YoY reduction in the overall cost of borrowing, bringing it down to 10.3% for the quarter. The company maintains a strong capital adequacy ratio of 38.3% and a prudent debt-to-equity ratio of 2.22x, providing a solid foundation for future growth.
The company significantly expanded its distribution network, adding 492 new touchpoints to reach a total of 4,872 across 22 states, and added approximately 1.6 million customers in Q3 alone. Paisalo also diversified its product offerings into new segments such as alternative fuel mobility, medical equipment, agriculture equipment, industrial machinery, solar equipment, and loan against property, enabling higher average ticket sizes while maintaining credit discipline.
Changes in the RBI's co-lending agreement have temporarily impacted other income and caused a delay in the launch of the SBI co-lending partnership from Q4 FY26 to Q1 FY27. Management is actively working on integrating systems and ensuring compliance with the new regulatory guidelines, expecting growth in these areas to resume once the necessary adjustments are completed.
The company's Return on Assets (ROA) declined from 4.4% to 3.8% YoY, which management attributed to the increase in total balance sheet size. Paisalo is also addressing its geographical concentration, with 90% of its portfolio currently in five states. The strategy is to reduce this concentration to less than 20% per state over the next three years through diversified distribution channels and OEM partnerships.