Arman Financial Services (ARMANFIN) investor relations material

Executive summary

• Q1 FY2027 began with encouraging trends, with consolidated AUM reaching INR 2,925 crore, up 36% year-on-year, and record Q1 disbursements at INR 686 crore, up 76% year-on-year.

• Profit after tax was INR 45 crore, compared to a loss of INR 15 crore in Q1 FY2026, with total income rising to INR 202 crore.

• Collection efficiency for the quarter was 96.6%, with an active customer base of approximately 6.3 lakh.

• Focus remains on quality over quantity, with high rejection rates and a shift toward individualized credit assessment in microfinance.

• Unaudited standalone and consolidated financial results for the quarter were approved and reviewed by the Board and Audit Committee.

Financial highlights

• Gross total income for Q1 FY2027 was INR 202 crore, up 34% year-on-year; net total income at INR 138 crore.

• Pre-provisioning operating profit (PPOP) rose to INR 77 crore from INR 59 crore in Q4 FY2026; profit after tax was INR 45 crore.

• Consolidated NIM at 17.4%, annualized ROA at 6.4%, and ROE at 18.9%.

• Capital adequacy at 33.6% (standalone) and 38.8% (Namra Finance); liquidity position healthy with INR 286 crore in cash and equivalents.

• Net worth (consolidated) as of June 30, 2026, stood at INR 979 crore.

Outlook and guidance

• Growth will remain calibrated and quality-focused, with ongoing monitoring of collections, early delinquencies, and macroeconomic conditions.

• Credit cost expected to remain around 3%-3.5%, possibly improving to 2.5% if conditions are favorable.

• OPEX targeted to reduce to 7% by March, with current trends showing improvement.

• Focus on expanding MSME portfolio to 35% of AUM, while reducing microfinance share to ~60% over time.

• Sufficient capital and liquidity to drive future growth, with a debt-to-equity ratio of 1.8x and INR 286 crore in cash and undrawn limits.