Fino Payments Q1 FY27 Earnings Call — Analysis (NSE: FINOPB)
Q1 FY27 described as one of the toughest quarters due to B2B UPI P2M pause and cash-to-digital shift, but retail liability franchise, referral lending, and SFB transition milestones remain on track.
Result quality: poor — Slipped to loss. Management sentiment: neutral.
The take
Q1FY27 Renewal income ₹67.5 Cr ( +7% YoY ) . New guidance — sfb lending portfolio yield 14% . New story: SFB transition on track .
Results
Fee-based income ₹234 Cr (75% of revenue); net revenue margin expanded to 42.8% (+925 bps YoY); EBITDA declined to ₹43.1 Cr from ₹56 Cr QoQ; referral loan disbursements surged 214% YoY to ₹628 Cr; deposits up 12% YoY to ₹2,772 Cr.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Fee-based income | ₹234 Cr | none · Q1FY27 · 75% of revenue | |
| EBITDA | ₹43.1 Cr | −₹56 Cr | sequential · Q1FY27 · Q4 FY26 ₹56 Cr |
| Net revenue margin | 42.8% | +925 bps | yoy · Q1FY27 |
| Referral loan disbursements | ₹628 Cr | +214% | yoy · Q1FY27 |
| Average total deposits | ₹2,772 Cr | +12% | yoy · Q1FY27 |
| Renewal income | ₹67.5 Cr | +7% | yoy · Q1FY27 |
| UPI throughput | ₹60,000 Cr | +14% | yoy · Q1FY27 |
| B2B CMS throughput | ₹18,000 Cr | +26% | sequential · Q1FY27 · QoQ from Q4 FY26 |
| Cost of funds | 1.4% | point_in_time · Q1FY27 | |
| Total throughput | -10% | yoy · Q1FY27 · decline |
Guidance
SFB readiness submission to RBI by end of Q4 FY27; B2B UPI P2M relaunch tentatively Q4 FY27; FY30 business plan unchanged, ROE 20%+ maintained; NIMs post-SFB expected 8-9%.
What management committed to
- [Fino Payments Bank] will complete all required milestones for SFB transition within the prescribed 18-month timeline and submit operational readiness to RBI by end of Quarter 4 FY27. — Q4FY27
- The [B2B UPI P2M] business segment will be relaunched tentatively in Quarter 4 FY27. — Q4FY27
- [Fino] expects an average portfolio yield of around 14% for its SFB secured lending book. — 14%
- [Fino's] ROE will remain 20%+ until further update. — 20%+, FY30
- Post SFB launch, [Fino] expects NIMs in the range of 8% to 9%. — 8% to 9%
- Senior executives for key leadership positions [in credit vertical] will join Fino by end of the calendar year [2026]. — Q3FY27
- Technology stack for end-to-end customer loan journey will be ready by Feb '27. — Q4FY27
- [Fino's] cost of funds will translate into approximately 300 basis points advantage over other small finance banks in future. — 300 bps, in future
- Post SFB, [Fino] will maintain a CASA ratio of around 65%. — 65%
Key themes
SFB transition and retail resilience amid B2B recalibration
How the narrative shifted
- SFB transition on track: Management positions the SFB readiness as progressing per plan despite a tough quarter, with PwC engaged, tech partners onboarded, and submission by Q4 FY27.
- B2B UPI P2M recalibration: The high-growth B2B business was paused after an unspecified Feb '26 event; management is recalibrating and expects relaunch only in Q4 FY27, subject to ecosystem developments.
- Fee-based income resilience and margin expansion: constructive
Operational commentary
- SFB transition progressing: PwC appointed for implementation; LOS/LMS technology partners onboarded; Finacle core banking stabilized; loan journey tech expected by Feb '27; compliance and governance frameworks being built; senior hires for credit vertical to join by Sep-Oct 2026.
- Referral lending business surged: disbursements ₹628 Cr (+214% YoY), fully focused on secured loans (gold, affordable housing, LAP), serving as pilot for future lending franchise.
- Liability franchise remained strong: CASA contribution to revenue jumped from 45% to 54% QoQ; 8.4 lakh new accounts added (total 1.83 Cr); renewal income up 7% YoY; 68% of new customers became UPI active in same quarter.
- Digital adoption accelerated: digitally active customers 64.6 L (+22% YoY); FinoPay app users 8.4 L (+38% YoY); UPI throughput ₹60,000 Cr (+14% YoY).
- B2B UPI P2M business paused for strategic recalibration following a Feb '26 event, with tentative relaunch in Q4 FY27; B2B CMS throughput grew 26% QoQ to ₹18,000 Cr but faces pricing pressure.
- Traditional cash-transacting businesses (remittance, micro ATM, AePS) declined 13% sequentially due to industry migration to UPI.
- BC business restructuring required as SFB regulation prohibits BC activities for other banks; management working on a plan, no concrete timeline yet.
- Cost-of-funds advantage: current 1.4%, expected ~300 bps advantage vs other SFBs; NIMs post-SFB projected 8-9%.
- FY30 business plan unchanged: predominantly fee-based with complementary secured lending; ROE 20%+ guidance upheld; H1 FY27 opex burden ~₹10 Cr for SFB readiness.
Analyst Q&A
Q. Will the proposed MDR on UPI P2M transactions benefit Fino?
Tejas Maniar: At a qualitative level, definitely yes. We are modeling the impact and awaiting clarifications on quantum, but the bank will benefit once B2B UPI P2M relaunches.
Q. Has the candidate for permanent CEO been finalized and submitted to RBI?
Ketan Merchant: The Board, stakeholders and RBI are working on it; as of now all current positions are held in interim; we will update when there is a development.
Q. What is the timeline for selling the BC business, and will there be a reverse merger?
Ketan Merchant: BC business restructuring is a regulatory requirement for SFB; we are working on various avenues including restructuring and may have a concrete plan next quarter. Reverse merger is not an RBI condition; the HoldCo-OpCo structure remains unchanged for now.
Q. Can you provide future guidance on ROEs post SFB loan book development?
Anup Agarwal: Too early to comment; currently in consolidation phase. Ketan added context on NIMs 8-9%. Anup later confirmed earlier 20%+ ROE guidance holds.
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