Laxmi India Fin. Q1 FY27 Earnings Call — Analysis (NSE: LAXMIINDIA)
Laxmi India Finance reports 27% YoY AUM growth to ₹1,721 Cr in Q1FY27 with 70% PAT expansion, while targeting 30% medium-term AUM CAGR and 4% ROTA.
Result quality: strong — Earnings grew. Management sentiment: optimistic.
The take
Q1FY27 Net Profit ₹16.43 Cr ( +70% YoY ) . New guidance — FY28 aum cagr growth 30% . New story: Secured MSME Lending Core Focus .
Results
AUM grew 27% YoY to ₹1,721 Cr with disbursements up 38% YoY to ₹230 Cr and PAT rising 70% YoY to ₹16.43 Cr; GNPA stood at 2.08% (0.83% ex-Upmoney).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| AUM | ₹1,721 Cr | +27% | yoy · Q1FY27 |
| Disbursements | ₹230 Cr | +38% | yoy · Q1FY27 |
| Net Profit | ₹16.43 Cr | +70% | yoy · Q1FY27 |
| Return on Equity (RoE) | 13.86% | point_in_time · Q1FY27 · Q1FY27 | |
| Return on Total Assets (ROTA) | 3.45% | point_in_time · Q1FY27 · Q1FY27 | |
| Net Interest Margin (NIM) | 11.36% | point_in_time · Q1FY27 · Q1FY27 | |
| Gross NPA | 2.08% | point_in_time · Q1FY27 · As of Jun-26 | |
| Gross NPA (Excluding Upmoney) | 0.83% | point_in_time · Q1FY27 · As of Jun-26 | |
| Cost of Borrowing | 10.48% | -125bps | none · Q1FY27 · vs 11.73% pre-IPO |
Guidance
Management targets ~30% medium-term AUM CAGR, opening 30-35 branches in FY27, an additional 22-25 bps reduction in cost of borrowing, and scaling ROTA to ~4%.
What management committed to
- Maintaining 30% CAGR growth should therefore not be a challenge in the coming months and on a year-on-year basis. — 30%, FY28
- We plan to open approximately 30–35 more branches during this financial year [FY27]. — 30–35 more branches, FY27
- Our target ROTA is approximately 4%, while our current ROTA is around 3.45%. We have good plans to reach the 4% level. — 4%, FY28
- We expect a further reduction [in cost of borrowing] of approximately 22–25 basis points during this financial year [FY27]. — 22–25 basis points, FY27
- In the meantime, we have made a provision of approximately 70% as of the last quarter [for Upmoney]... If recovery does not take place, we will also provide for the remaining amount [30%]. — remaining 30%, FY27
Key themes
Secured MSME expansion and liability optimization
How the narrative shifted
- Secured MSME Lending Core Focus: Management emphasizes that 80-82% of the book is secured MSME lending with low LTVs (45-50%), self-occupied collateral, and entire family co-borrowers, insulating asset quality.
- Geographic Expansion Beyond Rajasthan: The company is scaling branch productivity across newer territories including UP, Maharashtra, MP, and Gujarat using a scalable 6-branch cluster model.
- Liability Diversification and Cost Reduction: Borrowing costs are declining due to rating upgrades and deeper relationships with large banks (80-82% bank share), with recent onboarding of ICICI Bank at ~10%.
- Resolution and Safeguards on Direct Assignment (Upmoney): Management addresses the isolated ₹18-19 Cr Upmoney NPA by providing 70% coverage, instituting legal recovery, and restricting future DA purchases strictly to home geographies.
Operational commentary
- Geographic network stands at 196 branches across 6 states (Rajasthan 94, Madhya Pradesh 44, Gujarat 24, UP 14-15, Chhattisgarh 10, Maharashtra 6-7).
- Liability franchise increasingly bank-centric with 80-82% borrowings from banks across 50+ total lending relationships; onboarded ICICI Bank and City Union Bank at competitive ~10% rates.
- Credit underwriting strictly secured: MSME ticket sizes ₹6-6.5 lakh with 45-50% LTV against self-occupied residential/commercial properties and co-borrower family structures.
- Product mix dominated by secured MSME (yield 32.48%), used vehicles (yield 19.87%), wholesale lending (yield ~16%), and personal/business loans (yield 14-15%).
- Branch unit economics: break-even achieved in 7-9 months at ₹1.5-2 Cr AUM per branch against monthly opex of ₹1.5-2 lakh under a hub-and-cluster model (6 branches per cluster).
Analyst Q&A
Q. Status of the Upmoney exposure, current provisioning level, and clean GNPA figures.
Total exposure is ₹18-19 Cr with 70% already provided; legal action is underway. GNPA including Upmoney is 2.08% and excluding Upmoney is 0.83%.
Q. Competitive moat versus PSBs and SFBs in vehicle finance.
PSBs/SFBs focus on multi-vehicle owners and new vehicles, whereas Laxmi focuses on single-vehicle owners and used vehicles in Tier 2/3 and tehsil locations with 24-48 hour turnaround time and doorstep service.
Q. Underwriting metrics, MSME ticket size, and bounce rates.
Ticket size is ₹6-6.5 lakh; bounce rate is ~30% of which 93-94% is closed within the month, PAR 30 is ~7%, and overall credit cost is maintained at around 1%.
Q. Plans for product expansion such as gold loans, digital personal loans, and supply chain finance.
Developing automated digital personal loans for salaried professionals and a subprime documented MSME product; supply chain finance is on hold due to RBI revolving credit norms, and gold loans are on hold due to capex requirements.
Q. Safeguards implemented after the Upmoney direct assignment (DA) issue.
Restricted DA originations strictly to existing operating geographies, tightened due diligence/reviews to monthly/quarterly basis, lowered ticket sizes, and mandated physical custody of all property collateral.
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