Fedbank Financial Services (FEDFINA) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 AUM reached ₹131,881 mn, up 8.2% QoQ and 39.8% YoY; gross disbursements were ₹50,046 mn, up 15.4% QoQ and 68.8% YoY.

• PAT was ₹702 mn, up 3.8% QoQ and 30.3% YoY; operating profit reached ₹1,288 mn, up 18.6% QoQ and 55.7% YoY.

• Growth was led by gold and mortgage lending, alongside higher gross Stage III assets linked to mortgage delinquencies.

Financial highlights

• Net interest income was ₹2,496 mn, including ₹215 mn of direct-assignment gain; adjusted core NII rose 7.5% QoQ and 28.5% YoY.

• Credit costs were ₹352 mn versus ₹177 mn QoQ and ₹107 mn YoY, reflecting technical write-offs, higher ECL provisions and a one-off trade-receivable write-off.

• Operating expenses rose 9.7% QoQ and 31.5% YoY, partly due to Q1 wage costs; cost-to-income improved to 55.4% from 57.3% in Q4 FY24.

• Total income was ₹49,099 lakh versus ₹36,787 lakh in Q1 FY24; net profit was ₹7,023 lakh versus ₹5,388 lakh.

Outlook and guidance

• FY25 guidance remained 25% AUM growth, 0.8% annualized credit cost, ROA of 2.7%–2.75% and ROE above 14%.

• FY25 cost-to-income guidance was 56%; branch openings may add ~1.5 percentage points in their opening quarter, expected in Q2 or Q3.

• Plans included 50 gold-loan branches and 30 small-mortgage branches; existing FY25 cost guidance included these initiatives.

• Management expected Q1 seasonal collection pressure to ease in subsequent quarters.