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    SRG Housing

    SRGHFL
    Financial Services·14 Nov 2025
    Management Summary

    SRG Housing Finance Limited reported a strong Q2 FY26 with significant growth in loan book and disbursements, alongside a 25% increase in PAT. Asset quality showed mixed trends with improved Gross NPA but a slight increase in Net NPA and early delinquencies (DPD 0-30 and 60-90). The company's credit rating was upgraded, and management outlined plans for AUM growth and cost-to-income ratio reduction.

    Highlights

    5

    • Loan book grew significantly by 33.21% to INR 867 crore in Q2 FY26, up from INR 651 crore in Q2 FY25.

    • Disbursement showed robust growth of 85%, reaching INR 117 crore compared to INR 63 crore in Q2 FY25.

    • Profit after tax (PAT) increased by 25% to INR 8 crore from INR 6 crore in Q2 FY25.

    • Gross NPA improved to 1.88% in Q2 FY26 from 1.96% in Q2 FY25, indicating better asset quality.

    • Credit rating upgraded from Triple B plus stable to Triple B plus positive, reflecting improved financial health and stability.

    Concerns

    3

    • Net NPA slightly increased to 0.64% in Q2 FY26 from 0.59% in Q2 FY25.

    • DPD 0-30 increased to 4.65% from 4.10% in the last quarter, and DPD 60-90 increased to 1.96% from 1.79% in the last quarter, indicating some early delinquencies.

    • NIM is around 9%, which is noted as 'a little less' due to tightness in NHB.

    What Changed1

    vs Q4 FY26

    Guidance items8 → 13 (+5)

    Key financials

    Single quarter

    20 metrics
    1. 01Loan Book₹867 Cr+33.2%YoY
    2. 02Disbursement₹117 Cr+85%YoY
    3. 03Income₹48 Cr+32%YoY
    4. 04PAT₹8 Cr+25%YoY
    5. 05Net Worth₹279 Cr+38%YoY

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Debt

    Gross ₹685 crores

    Cost 11.0%

    Liquidity

    Undrawn ₹70 crores

    Liquid fund of INR 132 crore, with INR 70 crore undrawn sanctions.

    Guidance & targets

    13
    CategoryTargetPriority
    AUM
    AUM Target
    INR 970 crore
    		High
    AUM
    AUM Target
    INR 1,500 crore
    		Medium
    Disbursement
    Disbursement Target
    INR 400 crore
    		High
    Disbursement
    Disbursement per quarter
    INR 150 crores
    		High
    Branches
    Total Branches
    100
    		High
    Cost-to-Income Ratio
    Cost-to-Income Ratio
    62%
    		Medium
    Cost-to-Income Ratio
    Cost-to-Income Ratio below 60% or 55%
    2-3 quarters
    		Medium
    PBT
    PBT
    22%
    		Medium
    NIM
    NIM
    9%
    		Medium
    Loan Mix
    Housing Loan to LAP Ratio
    70-30
    		High
    AUM per Branch
    AUM per Branch Target
    INR 25 crores
    		Medium
    Total Book Size
    Total Book Size Target
    INR 2,000-2,500 crores
    		Medium
    Credit Rating
    Category A Rating
    Achieve Category A rating
    		High

    Cost-to-Income Ratio reduction

    next 2-3 quarters
    CurrentHigh (specific value not given, but target 62%)
    TargetAround 62%

    Why it matters

    Reduction in cost-to-income ratio is key to improving profitability and operational efficiency.

    But yes, the costing will not grow and it will decrease day by day. In the next quarters, it will keep decreasing. By reducing cost-to-income by 2%, 3%, we can do around 62%.

    How to verify

    key_financials.metrics[label='Cost-to-Income Ratio']

    Risks & concerns

    3
    RiskSeverity

    Tightness in NHB affecting NIM

    NIM is around 9%, which is 'a little less' due to tightness in NHB. — Management acknowledged

    medium

    Increase in early delinquencies (DPD 0-30 and 60-90)

    DPD 0-30 increased to 4.65% from 4.10%, and DPD 60-90 increased to 1.96% from 1.79%, but management considers it normal fluctuation. — Analyst downplayed

    low

    Market stress impacting affordable housing sector

    Analyst raised concern about potential slowdown in affordable housing due to market stress, management acknowledged growth can be up and down but expects it to come back. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Now that our equity has increased, I don't think that now we will need anything till INR1,500 crores, INR2,000 crores. But whenever we need it, we will have to take equity.”

    Clarifies the company's capital needs for future AUM growth and its strategy to raise equity only when necessary, not based on market timing.

    asked by Ankit Kanodia

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Loan Book and Disbursement Growth

    SRG Housing Finance reported a robust 33.21% year-on-year growth in its loan book, reaching INR 867 crore in Q2 FY26, up from INR 651 crore in Q2 FY25. Disbursements also saw a significant increase of 85% year-on-year, totaling INR 117 crore compared to INR 63 crore in the same period last year. This strong performance indicates effective market penetration and demand for the company's housing finance products.

    02

    Profitability and Net Worth Expansion

    The company's income grew by 32% to INR 48 crore in Q2 FY26, contributing to a 25% rise in Profit After Tax (PAT) to INR 8 crore. Net worth expanded by 38% to INR 279 crore from INR 202 crore in Q2 FY25. Management expects the cost-to-income ratio to decrease to around 62% in the coming quarters⏳, further boosting profitability.

    03

    Asset Quality Trends

    Gross NPA improved to 1.88% in Q2 FY26 from 1.96% in Q2 FY25, reflecting better overall asset quality. However, Net NPA slightly increased to 0.64% from 0.59% in the previous year. Early delinquency indicators (DPD 0-30) also saw an increase to 4.65% from 4.10% last quarter, and DPD 60-90 increased to 1.96% from 1.79%. Management views these DPD fluctuations as normal, with overall DPD 1+ at 12% and 30+ at 7.32%.

    04

    Funding and Credit Rating Upgrade

    Outstanding borrowings stood at INR 685 crore, with a borrowing cost of 10.99%, a slight improvement from 11.03% in Q2 FY25. The company successfully issued INR 50 crore in NCDs in Q2 and INR 26 crore in the current quarter, with mutual funds investing INR 50 crore. The credit rating was upgraded from Triple B plus stable to Triple B plus positive, enhancing access to funding. Management anticipates achieving a Category A rating once AUM surpasses INR 1,000 crore.

    05

    Strategic Growth and Expansion Plans

    SRG Housing aims for an AUM of INR 970 crore and disbursements of INR 400 crore for FY26. The company plans to increase its branch network from 93 to 100 by year-end. The target AUM per branch is INR 25 crore, with an overall book size goal of INR 2,000-2,500 crore. The loan mix will be maintained at 70% housing loan and 30% LAP, in line with NHB guidelines.

    06

    Digital Platform and New Geographies

    The company's digital platform, Srajan, is fully utilized for operations, with all agreements and processes running digitally. SRG Housing has expanded into Maharashtra, Karnataka, and Andhra Pradesh, making new books worth INR 34 crore, INR 20 crore, and INR 18 crore respectively. Management noted good development and property quality in Karnataka, with higher average ticket sizes of INR 20-25 lakh and low DPDs in these new states.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.