Fedbank Financi. Q2 FY27 Results (NSE: FEDFINA)
Signal: Earnings grew
The read
The trajectory improved materially in Q2FY27: total income grew 34.3% YoY to ₹71979 lakh while PAT grew 63.1% to ₹13075 lakh and net profit margin expanded 322bps to 18.17%, driven by a 14.1% YoY decline in impairment; however, H1 operating cash flow was negative ₹71888 lakh as loans rose to ₹1602001 lakh, leaving leverage at 4.61x.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹719.79 Cr | +34.3% | +7.4% |
| Net profit | ₹130.75 Cr | +63.1% | |
| EPS | ₹3.56 | +65.6% | |
| EBIT margin | 0% |
P&L walk
Total income increased to ₹71979 lakh, +34.3% YoY and +7.4% QoQ, while PAT rose to ₹13075 lakh, +63.1% YoY, as impairment expense fell 14.1% YoY and net profit margin expanded to 18.17%; finance cost grew broadly in line with income at 34.8% YoY.
Key positives
- PAT increased 63.1% YoY to ₹13075 lakh versus total income growth of 34.3% to ₹71979 lakh, with net profit margin expanding 322bps to 18.17%.
- Impairment expense declined 14.1% YoY to ₹2708 lakh and 20.5% QoQ, improving earnings conversion.
- Employee benefit expense increased 20.2% YoY to ₹12654 lakh, below total income growth of 34.3%, supporting cost-income improvement.
- Basic EPS rose 65.6% YoY to ₹3.56, tracking and slightly exceeding PAT growth.
Key concerns
- H1 operating cash flow was negative ₹71888 lakh versus positive ₹27275 lakh in H1FY26, mainly as loans increased to ₹1602001 lakh from ₹1431885 lakh.
- Finance cost increased 34.8% YoY to ₹28834 lakh, broadly matching total income growth and leaving funding-cost sensitivity material.
- Debt-equity remained elevated at 4.61x, despite improving from 4.89x in the prior quarter.
- GNPA rose to 1.82% from 1.55% QoQ and NNPA to 1.18% from 0.96% QoQ, while PCR declined to 35.37% from 38.36% QoQ.
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