Arman Financial Q4 FY26 Results (NSE: ARMANFIN)
Signal: Earnings grew
The read
Consolidated PAT surged to ₹41 Cr (up 221% YoY) on microfinance turnaround (PAT ₹29 Cr vs loss ₹0.3 Cr) as credit costs moderated and collection efficiency improved to 96.9%. However, standalone (MSME/2W/LAP) PAT fell 23% YoY, reflecting higher costs. AUM hit a record ₹2,728 Cr (+21.5% YoY), with disbursements up 75% YoY in Q4, signaling strong demand recovery.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹176 Cr | -11.9% | 9.7% |
| EBIT | ₹59 Cr | -41.6% | |
| Net profit | ₹41 Cr | 221.3% | |
| EBIT margin | 33.5% |
P&L walk
Consolidated PAT surged on microfinance turnaround; PPoP margin compressed on revenue decline.
Segments
Microfinance segment turned from a loss in Q4FY25 to PAT of ₹29 Cr, driving consolidated profitability, while standalone segment PAT declined 23% YoY.
Key positives
- Microfinance turnaround: PAT of ₹29 Cr vs loss of ₹0.3 Cr in Q4FY25, driven by 46.4% decline in ECL provisions and 93% portfolio CGFMU cover.
- AUM at all-time high of ₹2,728 Cr, up 21.5% YoY and 20% QoQ.
- Highest quarterly disbursements of ₹951 Cr, up 75% YoY and 54% QoQ, reflecting demand recovery.
- Collection efficiency improved to 96.9% in March 2026, with microfinance at 97.0%.
- Consolidated GNPA stable at 3.43% and NNPA at 0.93%; cumulative provisions cover 2.8% of AUM.
Key concerns
- Consolidated revenue fell 11.9% YoY, led by microfinance income decline of 22.1%.
- Pre-Provision Operating Profit dropped 41.6% YoY and margin compressed 1774bps, indicating elevated cost structure.
- Standalone PAT declined 23% YoY despite 10.2% revenue growth, highlighting cost pressures in MSME/2W/LAP segments.
- Microfinance PAT for full year FY26 was only ₹13 Cr, reflecting significant earlier losses despite Q4 recovery.
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