SG Finserve539199Earnings call transcript

Q2 FY27 call: all-time high PAT, leverage cap raised to 4x debt-to-equity

Transcript of SG Finserve's Q2 FY27 earnings call is out.

By ScoutQuest · Wed 21 Oct 2026, 3:15 PM IST · 3 min read

70%Supply chain share of AUM

Supply chain share of AUM: ~70%.

All-time high quarterly PAT of INR59 crores
Loan book at an all-time high of around INR5,700 crores
H1 FY27 PBT of INR150 crores, which management said has doubled over the corresponding H1 of the previous year
Net worth of approximately INR1,600 crores at the end of the quarter
Loans disbursed of more than INR16,000 crores in H1, described as volumes of INR32,000 crores on an annualised basis, up 46% year on year
Over 4 years of operations, profits generated of around INR560 crores, taxes paid of approximately INR145 crores and an accumulated equity pool of around INR415 crores

Management had earlier set a mid-term target of not leveraging beyond a debt-to-equity of 3x
That ceiling has been revised to a debt-to-equity of 4x, citing growth that has come in ahead of plan
The board, in its meeting that day, approved the incremental borrowing
Asked directly about an equity raise this financial year, the CEO replied no

The 4x leverage is expected to take AUM to INR11,000 crores, against INR5,700 crores today, which is close to 100% growth
Management believes current supply chain mandates from anchor clients can deliver this in the next 2 to 3 years, translating into 30%-35% AUM growth Y-o-Y
Beyond that, management said it would have two options: dilute equity or seek a higher debt-to-equity mandate, but placed that decision 2 to 3 years down the line

Supply chain contributes ~70% of AUM
Contribution of the group's ecosystem to the book has come down to 25%
The company is powering the ecosystem of more than 60 brands
Nil NPA maintained
Return on assets of more than 4.5%
Cost-to-income of less than 15%, which management plans to maintain in the quarters to come
Asset-to-equity leverage improved from 2.8x to 3.7x over the last one year, and the quarterly run rate for return on equity moved up to 15% in Q2 FY27
Team strength of more than 100 people, almost doubled in one year, with per-employee PAT of more than INR2 crores on an annualised basis
CRISIL rating of AA- on the long-term scale and A1+ on the short-term scale

Apart from dealer financing and deep-tier financing, the company has started Factoring and TReDS
Digital lending and loan against property were commercialised during the quarter

There are 12 accounts on the project finance side, disbursed recently
The projects are yet to start; management expects the first ones to start in 6 to 9 months

Management said no payment amount has been decided yet
Any amount paid in the initial year would be minuscule; the aim is to build synergies and reduce cost, or at worst maintain cost

Profitability, loan book and net worth were all reported at their highest levels so far
The company is signalling willingness to carry more borrowed money relative to its own funds, which supports faster growth but also raises dependence on debt
A large share of the book is short-cycle supply chain lending, which management linked to a payback cycle of less than 2 months for the loan book
The stated growth path of 30%-35% AUM growth rests on supply chain mandates from anchor clients continuing

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