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.
vs Q4 FY26
| Metric | Value | YoY |
|---|---|---|
| Loan Book | ₹867 Cr | +33.2% YoY |
| Disbursement | ₹117 Cr | +85.0% YoY |
| Income | ₹48 Cr | +32.0% YoY |
| PAT | ₹8 Cr | +25.0% YoY |
| Net Worth | ₹279 Cr | +38.0% YoY |
| Gross NPA | 1.88% | — |
| Metric | Latest | Trend |
|---|---|---|
| Disbursement(crores) | 117 | |
| PAT(crores) | 8 | |
| Net Worth(crores) | 279 | |
| Gross NPA | 1.88% | |
| Net NPA | 0.64% | |
| Credit Cost | 1.66% |
| Category | Headline | |
|---|---|---|
Debt | Gross ₹685 crores Cost 11.0% | |
Liquidity | Undrawn ₹70 crores Liquid fund of INR 132 crore, with INR 70 crore undrawn sanctions. |
| Category | Target | Priority |
|---|---|---|
| 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 |
| # | Metric | |
|---|---|---|
| 01 | Cost-to-Income Ratio reduction | |
| 02 | AUM for Category A rating | |
| 03 | Total Branches | |
| 04 | GNP and NNPA improvement |
| Severity | Risk |
|---|---|
medium | Tightness in NHB affecting NIM NIM is around 9%, which is 'a little less' due to tightness in NHB. Management |
low | 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 |
medium | 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 |
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.
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.
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%.
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.
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.
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.