Fedbank Financial Services (FEDFINA) Q2 25/26 earnings summary

Executive summary

• Q2 AUM reached ₹16,136 crore, up 13.5% YoY; excluding the business-loan base effect, growth was 28% YoY, with capital directed toward higher-return secured lending.

• PAT rose 24.2% YoY to ₹80.2 crore; operating profit grew 10.1% and net interest income rose 10.9%.

• Disbursements increased 36.6% YoY to ₹5,205 crore; Gross Stage III declined QoQ to 1.9% and credit cost was 0.9%.

• Board approved unaudited Q2 and H1 FY26 results; statutory auditors issued an unmodified limited-review conclusion.

Financial highlights

• Total income was ₹536.0 crore, up 3.3% YoY; net interest income was ₹293.9 crore, up 10.9%, and core net interest income rose 18.0% to ₹287.2 crore.

• Operating profit rose 10.1% YoY to ₹139.0 crore; PBT increased 24.4% to ₹107.5 crore and PAT rose 24.2% to ₹80.2 crore.

• Disbursements were ₹5,205 crore, up 36.6% YoY and down 12.3% QoQ; AUM grew 2.8% QoQ.

• Average yields increased to 17% from 16.2% in Q1; spreads improved 100 bps QoQ to 8.7%, supported by lower borrowing costs and MT LAP assignment income.

• OpEx grew 2.6% YoY; cost-to-income was 56.9%, improving 136 bps QoQ and 172 bps YoY.

Outlook and guidance

• FY26 credit-cost guidance remains 1% ±10 bps; no revision is planned until collections and field-level indicators improve.

• Targeting ~150 new gold branches in FY26, including ~90 in H2; co-location/consolidation target is 75–80, subject to premises and catchment conditions.

• Gold tonnage and AUM growth are expected to pick up in Q3 and Q4 as branches contribute; management cited seasonal withdrawals in August and September.

• FY26 is a rebuild year for collections and capacity; management expects a substantially different OpEx profile in FY27 and said FY27 guidance remains unchanged.

• System retail credit growth was projected at 14–16% CAGR; the MSME addressable credit market was cited at ₹25 trillion, with a ₹92 trillion credit gap.