Fedbank Financial Services544027Earnings call transcript

Q2 FY27 call: disbursements up 28%, PAT up 63%, ROE at 17%

Transcript of the Q2 FY27 earnings call shared with the exchanges.

By ScoutQuest · Fri 23 Oct 2026, 9:24 AM IST · 3 min read

Total Disbursements (Y-o-Y): up 28% Y-o-Y to INR6,676 crores
AUM (Y-o-Y): up 37% to INR22,035 crores
PAT (Y-o-Y): INR130.8 crores, up about 63% Y-o-Y; ROA 2.8%, ROE 17%

Q2 FY27 in one line

Management described the September quarter as its strongest so far on profitability and operating metrics, with both the gold loan and mortgage businesses growing and return ratios improving.

Growth

Total disbursements grew 28% Y-o-Y to INR6,676 crores; AUM grew 37% Y-o-Y to INR22,035 crores.
AUM crossed INR22,000 crores in September, a 9% increase in the first half of the fiscal from a little over INR20,000 crores at the start.
Gold loan disbursements were INR5,822 crores, up 31% Y-o-Y, and gold AUM grew 77% Y-o-Y to INR11,917 crores.
Doorstep gold loan AUM rose to INR1,851 crores; gold tonnage grew 16% Y-o-Y; loan-to-value was 68%.
74 gold branches were opened in the quarter, taking the total gold branch count to 831, with AUM per branch at INR16.9 crores. The company also entered Eastern India.
Mortgage disbursements grew 12% Y-o-Y to INR855 crores and mortgage AUM grew 13.5% to INR9,982 crores. Medium ticket LAP disbursed INR645 crores, up 16% Y-o-Y; small ticket LAP and housing disbursed INR210 crores.
Unsecured loans are less than 1% of on-book assets, so the book stays almost fully secured.

Profit and return ratios

Profit after tax was INR130.8 crores, up 14.3% quarter-on-quarter and about 63.1% year-on-year.
ROA was 2.8%, up 24 bps sequentially; ROE was 17%, up 153 bps sequentially and the highest so far.
Core NII was INR404.8 crores, up 5.2% quarter-on-quarter and 40.9% year-on-year. Pre-operating profit was INR205.1 crores, up 9.4% quarter-on-quarter and 47.5% year-on-year.
Credit cost was 0.6% of average total assets on an annualised basis, tracking inside the guided range of below 1%; in rupee terms it fell 20.5% quarter-on-quarter to INR27.1 crore from INR34.1 crore, helped by better collection efficiency on the mortgage book.

Asset quality

GNPA was 1.8%, moving from 1.6% in Q1. Management attributed the movement mainly to the ongoing transition in gold loan lending practices and to the normalisation of the direct assignment and co-lending business during the quarter.
NNPA was 1.2% with a provision coverage ratio of 35.4%; on a year-on-year basis both GNPA and NNPA improved. Gold GNPA was 0.5%.
Capital adequacy stood at 21% and book value per share at 84.4.

Funding and yields

Weighted average cost of borrowing stayed flat at 7.80, the same level as the previous three quarters; yield on the core loan book was steady at 16.40 levels.
Fixed rate borrowings are 33% of the book and MCLR-linked loans another 24%, which management said gives some insulation from rising interest rates.
Direct assignment of about INR700 crores of the gold loan book, plus higher co-lending in gold, brought the debt-equity ratio down from 4.9% to 4.6% and lifted capital adequacy from 20.7% in Q1.

What management indicated about the road ahead

Hold credit cost below 1%.
Continue expanding the branch network in the second half of the year.
Remain optimistic about continuing the ROA and ROE trajectory, with rising ROE supporting loan book growth through internal accruals.
The stated priorities remain unchanged: allocate capital to high-return businesses, grow a fully secured book, scale gold loans and LAP, grow core income while consciously reducing reliance on direct assignment, and move to an efficient cost structure.

Also from Fedbank Financial Services

Grant of 1.65 lakh stock options to eligible employees under ESOS-2024

23 Oct 2026

Fedbank Financial Services uploads audio recording of October 15, 2026 Earnings Conference Call

15 Oct 2026

Fedbank Financial's results led to the stock declining around 3-3.5%

15 Oct 2026

All Fedbank Financial Services stories