Laxmi India Finance Limited , a non-banking financial company focused on MSME lending, has released its financial results for the quarter ended June 30, 2025. The company reported a mixed performance, with growth in key metrics but challenges in asset quality.

Financial Highlights

• Profit After Tax (PAT): Increased by 45.77% year-on-year to ₹9.65 crores
• Assets Under Management (AUM): Grew by 29.99% to ₹1,346.00 crores
• Net Interest Margin (NIM): Stood at 9.66%
• Gross Non-Performing Assets (GNPA): Increased to 1.28%
• Net Non-Performing Assets (NNPA): Rose to 0.67%

Performance Analysis

Despite the growth in AUM and profitability, Laxmi India Finance faced challenges in the quarter. The company experienced a decline in net interest income due to a 10-15 basis points increase in NPAs. This increase in NPAs was attributed to stress in commercial vehicle and MSME loan segments, reflecting broader economic pressures.

Deepak Baid, Managing Director of Laxmi India Finance, commented on the results, stating, "We have seen a little bit of increase in NPAs, which has impacted our top line. However, with our strong security backing and focused collection efforts, we are confident of improving these numbers in the coming quarters."

Business Focus and Strategy

Laxmi India Finance primarily caters to MSME customers, with an average ticket size of ₹6.50 lakhs. The company maintains a strong focus on secured lending, with 98% of its book secured by collateral or vehicles. Key product segments include:

1. MSME loans (76% of portfolio)
2. Construction loans (6%)
3. Vehicle loans

The company operates across five states: Rajasthan, Gujarat, Madhya Pradesh, Chhattisgarh, and Uttar Pradesh, with a network of 159 branches.

Future Outlook

Despite the current challenges, Laxmi India Finance has outlined ambitious growth plans:

• AUM Growth Target: 35-40% annual growth
• Branch Expansion: Plans to open 30-35 new branches in FY26
• Geographical Expansion: Aims to enter one new state in FY26
• Long-term Goal: Reach ₹5,000.00-6,000.00 crores AUM in 3-5 years

The company also expects its credit costs to remain between 1.13-1.17% in FY26.

Recent IPO and Capital Utilization

Laxmi India Finance recently completed its Initial Public Offering (IPO), raising ₹165.00 crores. This capital infusion is expected to provide 4-5 months of liquidity for the company's operations and support its growth plans.

Gopal Krishan Sain, Chief Financial Officer, added, "The IPO proceeds will help us expand our branch network, enhance our geographical presence, and potentially explore business acquisitions. We anticipate this will lead to improved financial ratios and lower borrowing costs."

Conclusion

While Laxmi India Finance faces short-term challenges in asset quality, the company remains optimistic about its growth trajectory. With a focus on secured lending, technological advancements in underwriting and collections, and strategic expansion plans, the company aims to navigate the current economic environment and capitalize on the growing demand for MSME finance in India's Tier 2 and Tier 3 cities.

Laxmi India Finance Limited (LIFL) has announced strong financial results for the first quarter of fiscal year 2026, demonstrating significant growth across key metrics.

Impressive AUM Growth and Financial Performance

The company reported a substantial 46.78% year-on-year increase in Assets Under Management (AUM), reaching ₹1,346.05 crore compared to ₹917.52 crore in the previous year. This growth underscores LIFL's expanding market presence and effective business strategies.

Profit Before Tax (PBT) saw a remarkable 46.78% rise, climbing to ₹12.77 crore from ₹8.70 crore in the corresponding quarter last year. Similarly, Profit After Tax (PAT) grew by 45.77% to ₹9.65 crore, up from ₹6.62 crore.

Strengthened Financial Position

LIFL's Net Interest Income (NII) exhibited robust growth of 41.80%, reaching ₹30.86 crore compared to ₹23.88 crore in the previous year. The company's Net Worth also saw a significant increase of 28.87%, standing at ₹268.50 crore, up from ₹208.35 crore.

Operational Highlights and Asset Quality

The company maintains a strong presence across five states with 159 branches and an employee base of 1,520. LIFL's focus on asset quality is evident in its Gross Non-Performing Assets (NPA) ratio of 1.28% and Net NPA ratio of 0.67%.

Capital Adequacy and Credit Rating

LIFL reported a healthy Capital Adequacy Ratio (CAR) of 20.28%, with Tier I CRAR at 19.54%, indicating a strong capital position. The company's external credit rating was upgraded to 'A-' with a positive outlook by Acuite, reflecting its improved financial profile and growth prospects.

Liquidity and Funding

The company maintains a robust liquidity position with undrawn sanctions of ₹125 crore from various lenders, providing ample headroom for future growth.

Conclusion

Laxmi India Finance Limited's Q1 FY26 results demonstrate the company's ability to achieve significant growth while maintaining financial stability. The substantial increase in AUM, profitability, and net worth, coupled with a strong capital position and improved credit rating, positions LIFL well for continued growth in the coming quarters.