SBFC Finance reported a robust performance for the second quarter of FY27, with Profit After Tax (PAT) growing 27% year-on-year to ₹139 crore. The company achieved an ROE of 15.04%, demonstrating improved profitability. Asset Under Management (AUM) saw a 27% year-on-year increase to ₹12,592 crore, reflecting strong growth momentum amidst a dynamic economic landscape.
SBFC Finance Announces Strong Q2 FY27 Performance
SBFC Finance Limited has announced its financial results for the second quarter ending September 30, 2026, showcasing significant year-on-year growth in profitability and assets under management.
Key Financial Highlights
The company’s Profit After Tax (PAT) for the quarter stood at ₹139 crore, marking a substantial 27% increase compared to the same period last year. This growth was achieved despite prevailing macroeconomic headwinds. The Return on Equity (ROE) stood at a healthy 15.04%, and the Return on Average Assets (ROA) was 4.6%.
Asset Under Management (AUM) Growth
Overall AUM reached ₹12,592 crore as of September 2026, representing a 6% growth quarter-on-quarter and a strong 27% growth year-on-year. The company reaffirmed its guidance for a 5% to 7% quarterly growth from this point forward. The MSME loan portfolio forms a significant portion, standing at ₹9,669 crore, up 18% year-on-year. The loan against gold portfolio also demonstrated resilience, contributing ₹2,906 crore to the AUM.
Margins and Efficiency
Yields on loans were recorded at 18%, a 10 basis points increase, while the cost of funds was 8.41%. The net interest margin (spread) was 9.6%, up from 9.4% in the previous quarter. The company maintained surplus liquidity exceeding ₹1,000 crore throughout the quarter. Operating expenses (Opex) declined to 4.07%, down 22 basis points quarter-on-quarter, as SBFC continues its focus on becoming a more efficient operator.
Asset Quality
Gross Non-Performing Assets (GNPA) were reported at 2.64%, showing a reduction of 13 basis points year-on-year and 2 basis points quarter-on-quarter. The Provision Coverage Ratio (PCR) remained strong at 42.24%. Credit cost for the quarter declined to 1.37%. The company has been proactive in provisioning, building a provision of 2% on its secured lending portfolio.
Capital Position
SBFC Finance’s capital adequacy ratio stands at a comfortable 31%, with a tangible net worth of ₹3,789 crore as of September 2026. The company anticipates its current capital will support AUM growth up to ₹20,000 crore before requiring further capital infusion.
Outlook
Despite a challenging macroeconomic environment, SBFC Finance’s ratings outlook from CARE and India Ratings have been revised to positive from stable, reflecting the company’s robust unit economics, conservative provisioning, and diversified liability franchise. The focus remains on predictable compounding growth.
Source: BSE
