CSL Finance Limited has announced its provisional quarterly update for Q3 FY26 ended December 31, 2025, showcasing robust operational performance with significant growth across key financial metrics. The company's Assets Under Management (AUM) reached ₹1467.00 crore, marking a substantial 27.56% increase compared to ₹1150.00 crore in the corresponding quarter of the previous fiscal year.

Financial Performance Highlights

The company's Q3 FY26 performance demonstrates strong growth momentum across multiple operational parameters:

Lending Operations and Capital Access

CSL Finance successfully secured fresh sanctions totaling ₹198.00 crore from 9 lenders, including 2 new lenders, during Q3 FY26. The company availed fresh debt of ₹168.00 crore from existing banks and financial institutions, demonstrating strong relationships with the lending community.

The company disbursed ₹356.00 crore in new loans during the quarter, indicating active lending operations and continued business expansion. Collections for the quarter stood at ₹220.00 crore, reflecting efficient cash flow management and asset quality maintenance.

Portfolio Composition and Operational Metrics

CSL Finance maintains a diversified portfolio mix of 69:31 (WSL: SME) as of December 2025, compared to 67:33 in the previous quarter ended September 2025. This shift indicates a strategic focus toward wholesale lending operations.

Financial Strength and Liquidity Position

The company maintains a robust liquidity surplus of ₹163.00 crore, including undrawn sanctions of ₹30.00 crore, providing adequate buffer for operational requirements and growth opportunities. CSL Finance's Capital Adequacy Ratio stands at a healthy 44.00%, significantly above regulatory requirements, indicating strong capital buffers and financial stability.

The AUM growth includes Deferred Assets (DA) of ₹76.00 crore as of December 2025, compared to ₹45.00 crore in the corresponding quarter of the previous year. The company noted that the provided information is provisional and subject to limited review by statutory auditors.

CSL Finance Limited , a non-banking financial company (NBFC), has reported robust growth in its Assets Under Management (AUM) for the second quarter of fiscal year 2026, signaling a strong recovery in its SME retail business after a year of consolidation.

Key Financial Highlights

• AUM Growth: The company's AUM stood at Rs 1,397.00 crores as of Q2 FY26, marking a 29% year-on-year increase and an 8% sequential growth from the previous quarter.
• Profit After Tax (PAT): CSL Finance recorded a PAT of Rs 24.50 crores, representing a significant 37% year-on-year growth and a 15% quarter-on-quarter increase.
• Net Interest Income (NII): NII for Q2 FY26 was Rs 14.90 crores, up 10% year-on-year and 2% sequentially.

SME Retail Segment Revival

The company witnessed a notable upturn in its SME retail disbursements, which grew by 93% year-on-year and 61% sequentially. This improvement reflects the success of corrective measures implemented over the past few quarters, including refined credit policies, optimized product portfolios, and strengthened underwriting processes.

Asset Quality Improvement

CSL Finance reported steady improvement in asset quality:

• Gross NPA stood at 0.51% in Q2 FY26, down from 0.56% in Q1 FY26 and 0.54% in Q2 FY25.
• Net NPA was 0.39% in Q2 FY26, compared to 0.42% in Q1 FY26 and 0.32% in Q2 FY25.

Expansion and Future Outlook

• Branch Network: The company added two new branches during Q2, bringing the total to 45. It aims to expand to 60 branches by the end of FY26.
• AUM Target: CSL Finance has set a target of reaching an AUM between Rs 1,500-1,600 crores by the end of FY26.
• SME Focus: The company plans to increase the SME retail segment's contribution to its AUM from the current 35-36% to 45% by the end of FY27.

Management Commentary

Rohit Gupta, Managing Director of CSL Finance, stated, "After a year of consolidation in FY25, particularly in our SME retail business, we are happy to report visible progress in the first half of this year. Our focus remains on driving disciplined growth, particularly through the SME retail segment, while maintaining robust asset quality and liquidity."

Challenges and Strategy

Despite the positive outlook, the company acknowledges ongoing challenges in the broader industry, including over-leveraged borrower profiles and muted income growth in the MSME ecosystem. CSL Finance plans to navigate these challenges by:

1. Expanding its branch network using a hub-and-spoke model.
2. Focusing on secured lending in the Rs 10-50 lakh ticket size segment.
3. Improving service delivery and reducing disbursement time to 7-15 days for loans up to Rs 25 lakhs.

The company remains cautiously optimistic about its growth prospects, aiming to balance expansion with maintaining asset quality in a competitive market environment.

Note: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult financial advisors before making investment decisions.