Arman Financial Services (ARMANFIN) Q4 24/25 earnings summary

Executive summary

• FY25 was marked by significant stress in the microfinance sector, leading to higher provisioning, a sharp decline in profits for the microfinance subsidiary, and a 15% AUM decline to INR 2,245 crore.

• Profit after tax dropped sharply to INR 52 crore from INR 174 crore in FY24, reflecting higher provisions and write-offs.

• Standalone segments (MSME, Micro LAP, Two-Wheeler Financing) showed resilience and growth, offsetting some pressure from the microfinance vertical.

• Collection efficiency remained stable at 95.3% for FY25, with an active customer base of ~7.2 lakh.

• Audited standalone and consolidated financial results for the year ended March 31, 2025, were approved and published, with unmodified opinions from statutory auditors.

Financial highlights

• Consolidated total income for FY25 was ₹73,004.39 lakhs, up from ₹66,152.77 lakhs in FY24; net profit after tax was ₹5,207.32 lakhs, down from ₹17,357.28 lakhs.

• Namra Finance reported FY25 net profit of INR 7.8 crores, down from INR 138.3 crores in FY24; Q4 FY25 saw a marginal loss of INR 26 lakhs.

• FY25 gross total income grew 10% year-over-year to INR 730 crores; net income rose 24% to INR 491 crores.

• Pre-provisioning operating profit increased 14% to INR 333 crores; profit after tax dropped 70% to INR 52 crores due to INR 264 crores in provisions and write-offs.

• Gross NPA improved to 3.37% as of March 2025, down 75 bps from December 2024; net NPA at 0.55% on consolidated basis.

Outlook and guidance

• Management remains cautious about near-term growth in the MFI segment, expecting normalization only after sector deleveraging.

• Plans to grow AUM to INR 5,000+ crore by leveraging capital raised and expanding in MFI, MSME, two-wheeler, and LAP segments.

• Strategic focus on increasing MSME share to 35% and reducing MFI to ~60% over time.

• Portfolio stabilization and asset quality improvement are prioritized over growth in the immediate quarters.

• Continued expansion into new geographies and product lines, including LAP and rural two-wheeler loans.