SBFC Finance reported a net profit of ₹130 crore for the quarter ended June 30, 2026 (Q1FY27), marking a 29% year-on-year increase from ₹100.89 crore in Q1FY26. The growth was primarily driven by a significant expansion in net interest margins (NIMs) to 10.6%, aided by a 90 basis points year-on-year reduction in the cost of funds to 8.42%. Despite volatile interest rates and regulatory changes impacting co-origination, the company maintained disciplined pricing, resulting in a spread improvement of 39 basis points quarter-on-quarter to 9.48%.

The unaudited financial results were approved by the Board of Directors on July 25, 2026. Statutory Auditors M M Nissim & Co. LLP issued an unmodified limited review report. The company filed the results with the National Stock Exchange of India Limited and BSE Limited pursuant to Regulations 30, 33, 51, 52, and 54 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance Highlights

Interest income rose to ₹4,596.07 million from ₹3,548.97 million in the previous year’s corresponding quarter. Fees and commission income grew to ₹273.47 million from ₹248.23 million. Total expenses increased to ₹3,174.43 million from ₹2,528.31 million, primarily due to higher finance costs of ₹1,524.94 million and impairment on financial instruments rising to ₹416.87 million from ₹248.30 million.

Balance Sheet and Leverage Metrics

The company’s balance sheet saw significant expansion in debt obligations during the quarter. Paid-up debt capital outstanding rose to ₹88,577.71 million from ₹71,617.13 million at the end of FY26. This increase pushed the debt-equity ratio to 2.29 from 1.92 at the end of FY26. Net worth stood at ₹38,731.77 million, up from ₹37,251.52 million in March 2026. The total debts to total assets ratio increased slightly to 0.68 from 0.65 in the previous quarter. Management highlighted a closing liquidity position of ₹1,864 crore, noting that higher liquidity would be maintained as the asset under management (AUM) grows towards ₹15,000 crore.

Asset Quality and Security Cover

Asset quality remained stable with gross non-performing assets (GNPA) at 2.66%, slightly higher than 2.61% at the end of FY26 but lower than 2.78% in June 2025. Net NPA stood at 1.55%. The provision coverage ratio decreased to 42.22% from 41.64% in March 2026. During the quarter, SBFC Finance transferred 510 stressed loan accounts to Asset Reconstruction Companies (ARCs). The aggregate principal outstanding of these loans was ₹401.45 million, with a net book value of ₹243.98 million and an aggregate consideration realized of ₹192.69 million.

Regarding debt obligations, the company confirmed maintenance of sufficient security cover for its listed non-convertible debentures (NCDs). As per the Independent Auditor’s Certificate on Security Cover dated July 25, 2026, the exclusive security cover ratio stood at 1.22x and the pari-passu security cover ratio at 1.20x. This exceeds the required 1.10x asset cover stipulated in the information memorandum. All secured NCDs are backed by a first pari-passu charge on standard loans and advances.

What the Numbers Show

The divergence between revenue growth and debt expansion warrants attention. While operating income grew by 26.52% year-on-year, outstanding debt capital increased significantly, pushing the debt-equity ratio to 2.29 from 1.92 at the end of FY26. However, the stable GNPA levels and robust security cover ratios suggest that the increased leverage is being managed within regulatory comfort zones. The transfer of ₹401.45 million in stressed assets indicates proactive credit risk management, although investors should monitor the impact of higher impairment charges on future margins. Management noted that provisioning has been raised to 1.91% of assets, roughly twice the regulatory requirement, reflecting a cautious stance on potential stress in the sub-₹10 lakh ticket size segment where household debt service ratios are rising.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE423Y01016/0b5c5607-a76d-480a-8301-3e06d90f8967.pdf

SBFC Finance Limited has uploaded the audio recording of its earnings conference call for the quarter ended June 30, 2026 (Q1FY27), to its official website. The call, which was held on July 25, 2026, provides stakeholders with a detailed review of the company’s financial performance and operational highlights for the period.

The recording is accessible under the 'Investor Presentation – Audio Recordings' section at https://www.sbfc.com/investors . A direct link to the audio file is also provided: https://www.sbfc.com/investors/2026/Q1-FY27-Concall-Audio.mp3 . This disclosure is made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Conference Call Recap

The earnings call was conducted on July 25, 2026, starting at 05:00 PM IST. The session was led by senior management, including:

• Aseem Dhru, Executive Vice Chairman
• Mahesh Dayani, Managing Director & CEO
• Sanket Agrawal, Chief Financial Officer
• Rajiv Thakker, Chief Risk Officer

Participants could join via universal access numbers coordinated by ICICI Securities. The discussion covered the company’s Q1FY27 results, allowing investors and analysts to seek clarity on financial figures and strategic updates.

Access Details

For reference, the access numbers used during the live event are listed below:

Next Steps

The company stated that the transcript of the earnings conference call will be uploaded on its website and submitted to the stock exchanges in due course. Investors seeking further information regarding the results or the conference call can contact Sanket Agrawal, Chief Financial Officer, at sanket.agrawal@sbfc.com .