“We have been guiding 5% to 7% growth now for probably more than eight quarters in a row,” Mahesh Dayani, Chief Business Officer of SBFC Finance, said, adding that the company expects to sustain this momentum for the next year.
Disbursements across both the mortgage and gold loan segments remained steady in the last quarter. Even after adjusting for the impact of rising gold prices, volume growth was reported at around 15% to 16%. “It is a sustainable runway for the next year as well,” he stated.
On the margin front, Dayani noted that the company’s cost of borrowing has not changed significantly. If borrowing costs fall, SBFC would benefit, but the company has not factored this into its forecasts.
Despite the possibility of lower interest rates, Dayani assured that the company’s spreads would remain stable, supported by a largely variable loan book.
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Asset quality remains a central focus. SBFC is targeting credit costs of around 1%, with possible minor fluctuations of 10 basis points (bps) either way. Last year, the company consciously moderated disbursement growth due to rising leverage at the individual and business levels, a move aimed at safeguarding asset quality. Dayani said, “We don’t expect too much of volatility even in our delinquencies moving forward.”
Gross non-performing assets (NPAs) stood at about 2.7% for the quarter, and Dayani expects them to remain within the 2.5% to 3% range. He pointed out that secured lending typically avoids major quarterly volatility unless impacted by a large external event.
Regarding capital requirements, SBFC does not plan to raise funds for at least eight quarters. The company’s capital adequacy ratio currently stands at 36%, and it generates approximately ₹
95 crore in quarterly profits, strengthening its capital base. “We are fairly comfortable on the capital as yet,” Dayani said.
On provisioning, the company increased its buffers significantly. “Our provisions are now at almost 45.5%, the highest in the last 8 to 10 quarters,” Dayani said, explaining that this proactive stance is intended to protect earnings against unforeseen risks.
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The company is not heavily focused on securitisation; most of its off-balance sheet exposure comes through co-origination arrangements, where 20% of the loan remains on SBFC’s books and 80% is with the partner.
Looking ahead, SBFC expects its cost-to-income ratio to improve by around 50 bps this year, following a reduction of about 70 to 75 bps last year. This improvement is expected to further enhance return on equity (RoE).
Summing up SBFC’s outlook, Dayani said, “We have a very boring outcome — predictable. Our guidance doesn’t change. We’re as predictable and boring as we can get.”
The company also reported its January–March 2025 quarter results, with disbursements rising 7.9% quarter-on-quarter and assets under management increasing 7.35% to ₹8,747 crore.
The market capitalisation stands at ₹11,492.04 crore.
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