SRG Housing Finance LtdQ1 FY26Finance

SRG Housing Finance Ltd

Q1 FY26 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 2

→The company aims to double its AUM from INR 1042 crores to around INR 2000-2500 crores within the next 2.5 to 3 years.
→Long-term vision includes expanding the loan book to INR 10,000 to 20,000 crores.
→Disbursements target INR 600 crores for the current financial year, supporting AUM growth to approximately INR 1400-1500 crores.
→Expansion into newer states like Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, and Telangana with 10-15 new branches planned.
→Growth driven by increased branches, operational efficiency, technology integration, and underwriting discipline.
→Profit after tax has shown a 33-50% year-on-year growth recently, reflecting strong revenue growth.
→Cost of borrowing expected to decline marginally, supporting margin stability.
→Continued strong demand in the underserved rural and semi-urban affordable housing finance segment fuels growth potential.

Category 3

→SRG Housing Finance aims to double its AUM from INR 1,042 crores in FY26 to approximately INR 2,000-2,500 crores within the next 2.5 to 3 years.
→Long-term vision includes scaling the AUM to between INR 10,000 crores and INR 20,000 crores in the coming years.
→Profit after tax showed a strong 33% YoY growth in FY26, indicating healthy earnings momentum.
→Operational efficiencies and scale are expected to improve, with AUM per branch and employee increasing, supporting overall profitability.
→NIMs are maintained around 11%, with stable cost of borrowing expected to marginally improve.
→ROE is targeted around 18% in the coming years, up from approximately 12-13% currently.
→Growth supported by geographic expansion, technology integration, and strong collection infrastructure.
→Equity raise likely within next 1-2 years to support scaling beyond 5-6x leverage.

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Yes

→SRG Housing Finance plans to raise additional equity once leverage crosses 5x–6x, as banks usually limit leverage to this range.
→Equity raising is expected possibly in Q4 FY27 or in the first or second quarter of the following year, depending on leverage visibility.
→The company has strengthened its funding sources after the recent rating upgrade, with multiple channels now supporting growth (including banking channels, equity markets, and NCD investors).
→There is no immediate challenge foreseen in terms of funding or business expansion due to diversified funding sources.
→Cost of borrowing is expected to slightly decline over the next 1-2 years, reflecting improved liability profile.
→No specific new debt issuance was mentioned, but continued support from NCD investors and banks is in place.

Yes

→As of FY 2026, SRG Housing Finance's Assets Under Management (AUM) stands at approximately INR 1,042 crores, reflecting strong growth from INR 28 crores in 2014.
→The company targets to double the AUM to around INR 2,000 to 2,500 crores within the next 2.5 to 3 years.
→They aim for a long-term vision of building an AUM book between INR 10,000 crores to INR 20,000 crores, with clarity expected within the next two years.
→Disbursements for the current year are targeted at roughly INR 600 crores, expected to grow AUM to around INR 1,400 to 1,500 crores.
→Expansion plans include launching 10 to 15 new branches in southern states like Tamil Nadu and Telangana, alongside growth in existing states to support scaling.
→The company is well-capitalized with a capital adequacy ratio of 38.62% and plans for equity raising once leverage crosses 5x-6x to support AUM growth.

Yes

→SRG Housing Finance is currently focusing on expanding its branch network, especially in southern states like Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu, and Telangana, targeting 10-15 new branches in these states by the end of the year.
→There is significant investment in technology, including continuous development of their own ERP system and integration of AI to improve operational efficiency and reduce turnaround time; these IT initiatives are still underway with no major cost incurred yet.
→Future capital raising plans include potential equity infusion in Q4 FY26 or early FY27 to support scaling beyond current leverage levels (5x-6x), especially as AUM grows toward INR 2000-2500 crores in the next 2-3 years.
→Long-term vision targets an AUM growth to INR 10,000 - 20,000 crores, implying substantial future capital and strategic investment in infrastructure and human resources to support such expansion.

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