SRG Housing Finance Limited ( company name ) reported a net profit of ₹85 million for the quarter ended June 30, 2026, marking a 25% year-on-year increase from ₹68 million in Q1FY26. The housing finance company’s assets under management (AUM) expanded by 35.3% to reach ₹10,764 million, driven by strong disbursements and portfolio growth in rural and semi-urban segments. This performance underscores the company’s ability to scale operations while maintaining robust asset quality, with gross non-performing assets (GNPA) declining to 1.73% from 1.85% a year earlier.

The Board of Directors approved the unaudited financial results on August 5, 2026, following a review by the Audit Committee. The statutory auditors provided limited review reports on the financial statements. The disclosure was made in accordance with Regulation 33 and Regulation 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. An accompanying earnings presentation was filed under Regulation 30 on August 11, 2026, detailing key operational and financial metrics for investors.

Financial Performance Highlights

Net interest income (NII) rose by 32.4% to ₹270 million, supported by higher interest income of ₹509 million against finance costs of ₹239 million. Total net income increased by 15.8% to ₹301 million. Operating expenses grew by 10.4% to ₹201 million, resulting in an operating expense ratio of 6.69%, down significantly from 9.10% in the previous year. Profit before tax stood at ₹100 million, leading to a net profit after tax of ₹85 million. Diluted earnings per share (EPS) were ₹5.39, compared to ₹4.32 in Q1FY26.

Operational Growth and Asset Quality

AUM per branch grew approximately 31% year-on-year to ₹112.13 million, reflecting improved operational productivity. The company disbursed ₹672 million during the quarter, though this represents a sequential decline from ₹1,396 million in Q4FY26. New approvals totaled ₹585 million. The average ticket size increased by 21% to ₹13.19 lakhs, driven by expansion into newer markets. The loan portfolio remains heavily secured, with an average loan-to-value (LTV) ratio of 52.19%. Asset quality remained healthy, with GNPA at 1.73% and net NPA at 0.63%. The capital adequacy ratio stood at 39.21%, providing a strong buffer.

What the Numbers Show

The divergence between the 35.3% growth in AUM and the 16% decline in disbursements suggests that existing portfolio growth and retention are primary drivers of current expansion, rather than new originations alone. Furthermore, the significant compression in the operating expense ratio (from 9.10% to 6.69%) indicates strong operational leverage, where cost control measures are outpacing revenue growth. This efficiency gain, combined with a stable net interest margin of 10.21%, highlights the company’s focus on sustainable profitability amidst competitive funding costs.

The company operates through 96 branches across six states and one union territory, serving over 25,000 customers. Nearly 97% of collections are routed through automated banking channels, enhancing efficiency. The borrower base is predominantly self-employed (79%), with 94% of the loan book classified as rural. SRG Housing Finance maintains diversified funding relationships with 38 lenders, including public sector banks like State Bank of India and private entities such as HDFC Bank.

SRG Housing Finance Limited reported a net profit of ₹8.47 crore for the quarter ended June 30, 2026 (Q1FY26), marking a 25% year-on-year increase from ₹6.78 crore in Q1FY25. Total revenue from operations rose to ₹53.95 crore, up from ₹42.63 crore in the prior year period, supported by stronger interest income and controlled impairment losses.

The Board of Directors approved the unaudited financial results on August 05, 2026, following a limited review by statutory auditors Valawat & Associates. The filing was submitted to the National Stock Exchange and BSE pursuant to SEBI LODR Regulations 30, 51, and 52. The company also confirmed compliance with debt covenants, maintaining a security cover of 110% for its listed non-convertible debentures as required under Regulation 54 of the SEBI LODR Regulations.

Financial Performance

Interest income, the primary revenue driver, increased to ₹50.93 crore in Q1FY26 from ₹37.13 crore in Q1FY25. However, fees and commission income declined sharply to ₹0.97 crore from ₹1.90 crore in the corresponding quarter of the previous year. Other operating income fell to ₹1.72 crore from ₹2.54 crore.

Total expenses were contained at ₹44.01 crore, down from ₹45.74 crore in the preceding quarter and significantly lower than ₹34.85 crore in Q1FY25. Finance costs rose to ₹23.89 crore from ₹16.75 crore year-on-year, reflecting expanded borrowing or loan book growth. Employee benefit expenses increased to ₹14.06 crore from ₹11.59 crore in Q1FY25. Notably, impairment of financial instruments (expected credit loss) dropped substantially to ₹0.09 crore from ₹0.59 crore in the same period last year, indicating improved asset quality or provisioning trends.

Key Ratios and Capital Structure

The company’s debt-equity ratio stood at 2.92, while total debts accounted for 73.18% of total assets. The interest service coverage ratio was 1.42. Net worth remained stable at ₹305.54 crore. Paid-up equity capital increased slightly to ₹15.71 crore from ₹15.70 crore in the previous quarter, following the allotment of 4,400 equity shares to employees under ESOPs at ₹200 per share during the quarter.

What the Numbers Show

The divergence between rising interest income and falling fee income suggests a shift in revenue mix towards core lending activities rather than ancillary services. The significant reduction in impairment losses—from ₹58.66 lakh in Q1FY25 to ₹9.33 lakh in Q1FY26—contributed materially to the bottom-line growth, highlighting better credit risk management or a cleaner loan book compared to the prior year. Despite higher finance costs, the company maintained profitability, with a net profit margin of 15.68%.