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SRG Housing — Q1 FY27 earnings call

Call held 16 Sep 2026

Company page: SRG Housing share price, financials & guidance record

Management summary

SRG Housing Finance Limited addressed investor concerns regarding a recent newspaper article alleging ₹400 crore siphoning and an NHB red flag. Management vehemently denied the allegations, asserting strong financial health with a 39.21% capital adequacy ratio and no history of defaults. While acknowledging a temporary slowdown in disbursements due to the ongoing NHB audit, the company expressed confidence in its resolution and plans to convert to an NBFC for broader growth.

Highlights

  • Capital adequacy ratio is 39.21%, which is more than double the regulatory minimum.

  • Profit after tax has grown by 25% in the quarter and 33% in the financial 2025-2026 period.

  • The company has never delayed or defaulted any installment of any lender, bank, financial institution, or NHB in its entire history.

  • Promoters have increased their stake by 1% and given personal guarantee to the majority of bank lenders.

  • Board passed a resolution to convert from Housing Finance Company to Non-Banking Finance Company for multiple products and growth.

Concerns

  • NHB red-flagged the company's account, leading to a newspaper article alleging ₹400 crore siphoning by promoters.

  • Temporary slowdown in fresh sanctions and disbursements due to the red flag, impacting Q2 numbers.

  • Reputational impact due to the news article, despite management denials.

Key financials

2 periods

Headline

  • Capital Adequacy Ratio
    39.2%
  • Profit After Tax Growth (Quarter)
    0.25 decimal_fraction
  • Active Loan Accounts
    15,000 accounts
  • Total Loan Accounts
    25,000 accounts
  • NHB Outstanding
    ₹15 Cr

FY25-26

  • Profit After Tax Growth
    0.33 decimal_fraction

What they filed

Q1 FY27: revenue up 26.6%, net profit up 24.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue36 39 43 43 48 +33%50 +30%57 +34%54 +27%
Net profit7 6 6 7 8 +25%8 +43%9 +49%8 +25%
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.

Capital allocation

high confidence
  • Liquidity Liquidity disclosed The company maintains a strong liquidity position with a buffer of 2-3 months of repayment obligations, ensuring comfortable coverage of all lender obligations. Collections consistently exceed obligations, and the liquidity position is deemed sufficient until at least next March.
    Sir we always have a buffer with us. We have a buffer of 2-3 months.

Guidance & targets

Regulatory Compliance

  • NHB Audit Completion Regulatory Compliance · next 1-2 months · Medium confidence within 1-2 months
    So, you are expecting that in the next 1-2 months it will be closed.

    — Vinod Kumar Jain

Capital Infusion

  • Promoter Capital Infusion Capital Infusion · if need arises · High confidence 100% of capital if needed
    We can put 100% capital in the company if need arises. We will do it according to the need.

    — Vinod Kumar Jain

Strategic Transformation

  • HFC to NBFC Conversion Timeline Strategic Transformation · to process · High confidence at least 6 months
    Sir, this is our future plan, okay. Now the board has just decided. It takes at least 6 months to process. We will have to take NOC from everyone. We will have to talk to everyone. It will take time in that process.

    — Vinod Kumar Jain

Market context

  • Q3 and Q4 Outlook Business Performance · Q3 and Q4 · Low confidence good
    Yes, there will be a little slowdown because of this. But again, Q3 and Q4 will be good.

    — Vinod Kumar Jain

What to watch in Q2 FY27

NHB Audit Completion & Red Flag Removal

Next 1-2 months / soon
Current Audit ongoing, account red-flagged
Target Audit completed, red flag removed

Why it matters

Resolution of the red flag is crucial for resuming normal business operations and restoring investor confidence.

As soon as the audit is completed and all the obligations are completed, we will remove the red flag.

Risks & concerns

  • NHB Red Flag and associated allegations (siphoning, fictitious accounts, NPA manipulation)

    high

    A newspaper article alleged ₹400 crore siphoning, fictitious accounts, and NPA manipulation. Management vehemently denies these, stating the NHB red flag is a routine audit process and not a declaration of fraud, with specific reasons unknown to them currently.

    Both denied allegations, acknowledged red flag as temporary audit process

  • Reputational damage from media reports

    high

    Analysts expressed concern about the negative impact of the news article on investor and borrower trust. Management confirmed they have contacted the Economic Times to dispute the report.

    Analyst acknowledged, taking action against media

  • Slowdown in fresh sanctions and disbursements

    medium

    The company has temporarily slowed fresh sanctions and disbursements as a precaution due to the ongoing audit, which is expected to impact Q2 numbers.

    Management acknowledged as a temporary, precautionary measure

  • Potential for classification issues from audit

    medium

    An analyst questioned potential classification issues from the company's side. Management stated that the classification is part of the audit process and they will comply with whatever outcome emerges.

    Analyst acknowledged, will comply 100% with audit outcome

Q&A highlights

5 direct, 3 evasive
Reason for NHB red flag Evasive
Sir, actually this is a regulatory system, they have their own internal audit. It does not tell us why it is red flagged. It is done when the audit is going on. As soon as the audit is over, we will complete the audit, then the red flag will be removed.

Management states they are not informed of the specific reasons for the red flag, which is a significant concern for investors seeking clarity on the issue.

Asked by Jinal Sheth

Allegations of fictitious accounts and NPA manipulation Evasive
Therefore, sir, the information you possess is based on the newspaper report, which we have already denied. All these things will be clarified in our audit. And only after coming to the audit, we will be able to give all the clarifications. Okay. We will get all the clarity from that.

Management denies the specific allegations from the newspaper but defers full clarification until the audit is complete, leaving uncertainty for investors.

Asked by Harsh Chaurasia

NHB formal communication regarding red flag Evasive
No, that is the part of the audit. When the audit is closed, all these things will close with it.

Management indicates they haven't received separate formal communication about the red flag's reasons, suggesting the process is internal to the audit and not transparent to the company yet.

Asked by Manish Singh

Action against Economic Times for false reporting Direct
No sir. We have emailed the newspaper. We have told them that whatever information you have given is wrong. Either the NHB has given it to you, in which you have written. It is not that we will not talk on such things.

Management is actively countering the negative press, which is crucial for reputation management and asserting their position against the allegations.

Asked by Manish Singh

Reason for converting from HFC to NBFC Direct
No, there are many products in it. We will be able to do multiple growth in it. It is not that, we will not do any HL in NBFC. We will not do housing finance or anything like that. We will do housing finance in that too. But because of multiple products, growth is also made in it. It seems that we will be able to work in it.

Reveals a strategic shift for broader product offerings and growth, indicating a long-term vision beyond the current issues and potential for diversification.

Asked by Prashant Talpade

Promoter capital infusion if needed due to slowdown Direct
Sir right now, we do not have any shortfall in operations. And second, this is not a long-term period. This work is for 5-15 days or a month. So, it is not a long period from which we have to do so much. If the business has to be done again, then all the teams and all the people are required.

Reassures investors about the promoters' commitment and ability to support the company financially if required, downplaying the severity of the current operational slowdown.

Asked by Jayanta Jana

Impact of red flag on lender relationships and potential recall facilities Direct
There is not a single day delay for any lender's obligations. Neither are we in NHB, nor are there any lenders. And none of the lenders have talked about a recall. And all of us have our regular things. Our position is from so many years. Everyone's comfort, everyone's confidence, and everyone's trust is with SRG.

Addresses a critical concern about lender confidence and potential financial distress, with management asserting strong, long-standing relationships and no immediate threat of recall.

Asked by Nihar Jena

Meaning of 'red flag' and why business slows down Direct
Sir, actually, what is the meaning of red flag? Everyone understands that the company has defaulted. Whereas, in the red flag, there are multiple things. It is not that by defaulting, in everyone's mind, the company has defaulted, that is why it is red flagged. Whereas, it is not an issue. When the regulator does a lot of things, he can do it for many reasons and this is not permanent. This is temporary. The audit started, audit got over, his obligations got over, closing happens, and these things get over.

Clarifies that a red flag is not necessarily a default and can be temporary, aiming to reduce investor panic and explain the precautionary slowdown in business.

Asked by Rahul Tiwari

2 min read 6 chapters

Detailed narrative

NHB Red Flag and Allegations Addressed

SRG Housing Finance Limited convened a call to address a newspaper article from September 10, 2026, alleging ₹400 crore siphoning by promoters and an NHB red flag. Management vehemently denied these claims, stating that the alleged ₹400 crore represents about one-third of their total loan amount, which is impossible given their verified loan accounts and complete disbursement trails for over 15,000 active accounts. They also denied any fund transfer to promoter-related entities.

Management's Denial and Clarifications

The company clarified that the NHB red flag is part of a routine supervisory audit process, not a declaration of fraud. They are in communication with NHB and expect the audit to be completed soon, potentially within 1-2 months, after which the red flag will be removed. Management emphasized that regulators do not publicly comment on or disclose supervisory matters and that the audit outcome will be fully complied with. They also confirmed taking action against the newspaper for the false report.

Robust Financial Strength and Liquidity

SRG Housing highlighted its robust financial position, with a capital adequacy ratio of 39.21%, more than double the regulatory minimum. Profit after tax grew by 25% in the quarter and 33% in FY25-26. The company has a flawless repayment history, never delaying or defaulting on any lender. Liquidity is strong, with a 2-3 month repayment buffer, and collections comfortably exceed obligations.

Strategic Shift to NBFC

The board has passed a resolution to convert the company from a registered Housing Finance Company (HFC) to a Non-Banking Finance Company (NBFC). This strategic move aims to enable the company to work with multiple products and achieve greater growth in the future, while still continuing to offer housing finance. The conversion process is expected to take at least 6 months, involving obtaining NOCs from various stakeholders.

Promoter Commitment and Shareholder Trust

Promoters have demonstrated strong commitment by increasing their stake by 1% and providing personal guarantees to the majority of bank lenders. Management assured investors and lenders of their continued trust-building efforts and readiness to infuse 100% capital if needed. They reiterated that the current situation is a temporary phase that will be resolved soon, aiming to maintain confidence.

Operational Impact and Future Outlook

Due to the ongoing audit and red flag, the company has temporarily slowed fresh sanctions and disbursements, which will impact Q2 numbers. However, management expects normal operations to resume swiftly once the audit is complete and the red flag is removed. They anticipate Q3 and Q4 to be strong, with new sanctions from banks ready for disbursement post-resolution, indicating a cautious but optimistic outlook.

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