Summary
Satin Creditcare Network Limited (SCNL) - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026, 11:00 AM IST
Event Participants
Executives 3 Aditi Singh (Chief Strategy Officer), Dr. HP Singh (Chairman cum Managing Director), Jugal Kataria (Group Controller)
Analysts 6 Amit Mamodia, Ankur Kumar, Chinmay Nema, Prabhu Sharma, Ritika Behera, Rohitash Arora
Financials & KPIs (Consolidated unless specified)
| Metric | Reported | Commentary |
|---|---|---|
| AUM | ₹13,341 crores | +10% YoY; Standalone AUM at ₹11,482 crores (+7% YoY) |
| Disbursements | ₹8,094 crores | +7% YoY for 9M FY26; Standalone at ₹7,382 crores |
| Profit After Tax (PAT) | ₹72 crores | +404% YoY; Reflects recovery and stable operating margins |
| Net Interest Margin (NIM) | 14.25% | Consistent and stable Q-o-Q; Standalone NIM at 14.71% |
| Cost-to-Income Ratio | 7.35% | Operating expense ratio (Consolidated); Standalone at 7.23% |
| GNPA (PAR 90) | 3.3% | Standalone metric; Improved and reflects disciplined credit management |
| Credit Cost | 4.23% | Standalone Q3; Management targeting ~4.0% for full FY26 |
| CRAR | 24.64% | Consistently above 25% for 27 quarters; provided ample growth headroom |
| ROA (Consolidated) | 2.22% | Standalone ROA at 2.33%; 18th consecutive profitable quarter |
| Liquidity | ₹2,283 crores | Represents ~45 days of disbursement; slightly elevated due to quarter-end funding |
Geographic & Segment Commentary
- Microfinance (SCNL): AUM of ₹11,482 crores with 7% YoY growth. Focus remains on cautious growth (10-15% target) and premium customer acquisition. Management reported state collection efficiencies of 99% in UP and 95.4% in Bihar, with Kerala added as a new expansion market.
- Housing Finance (SHFL): AUM reached ₹1,101 crores, growing 26.3% YoY. The segment focuses on affordable micro-housing and recently crossed the ₹1,000 crore milestone. Current low ROA is attributed to expansion-mode branch openings.
- MSME & Business Loans (Satin Finserv): AUM stood at ₹759 crores, representing 58.4% YoY growth. Management infused ₹50 crores of capital recently via rights issue to support rapid scaling towards a ₹1,000 crore target.
- Technology & Cybersecurity (Satin Technologies): Acquired 51% stake in QTrino Labs, a deep tech cybersecurity company. This move focuses on post-quantum cryptography to build future-ready internal infrastructure and external offerings.
Company-Specific & Strategic Commentary
- Liability Diversification: Foreign funding now accounts for 22% of the mix (15% Overseas + 7% DFI). These are long-term (3.5–5 years) and fully hedged, with IRRs comparable to or lower than domestic funds.
- Risk Mitigation Framework: Introduced Natural Calamity Insurance (NATCAT) for all borrowers and applied for the Credit Guarantee Fund for Micro Units (CGFMU) to de-risk the portfolio against macro shocks.
- Sustainability (ESG): Achieved a score of 59 in the S&P Global Corporate Sustainability Assessment (CSA). Focus areas include carbon footprint assessment and human capital management.
- Asset Quality Discipline: Maintained a 0% incremental provision on account of Labour Codes. The “X Bucket” collection efficiency remains high at 99.8%.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| MFI AUM Growth | 10% - 15% (FY27) | Deliberately cautious growth to prioritize underwriting and asset quality. |
| Credit Cost | ~4.0% (End of FY26) | Reduction from 4.6% in FY25; driven by tighter underwriting and removal of industry headwinds. |
| Subsidiary Growth | 40% - 50% (FY27) | High growth expected to continue as Housing and Finserv scale from a lower base. |
| ROA / ROE | Improvement (FY27) | Expected to trend higher as credit costs stabilize and subsidiaries achieve better scale. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regional Political/Social Risk | Potential “SIR” issues in areas adjacent to West Bengal. Management currently reports no major concerns, with West Bengal collection efficiency at 94%. |
| Negative Carry on Liquidity | Maintaining high cash levels (₹2,283 crores) creates a slight drag on ROA. Management intends to normalize this to 45 days of disbursements as sector headwinds ease. |
| Industry Transition | The microfinance sector is navigating a transitionary phase with fluctuating credit costs. SCNL is mitigating this through geographic diversification and product expansion. |
Q&A Highlights
Asset Quality & Credit Costs
- Question: What is the guidance for credit costs in Q4 and next year? (Ankur Kumar)
- Answer: Management is targeting ~4% for the full FY26, down from 4.6% last year. For FY27, it should be better than current levels as industry headwinds have largely passed (HP Singh).
Borrowing Costs & Yields
- Question: Why did the cost of borrowing and gross yield fall by 200 bps QoQ? (Prabhu Sharma)
- Answer: The previous quarter was inflated by MTM gains (₹83 Cr) and forex expenses (₹74 Cr). On a normalized basis, NIMs have remained stable at ~14.25% (Aditi Singh).
Geographic Performance
- Question: Are there concerns regarding West Bengal or Bihar performance? (Vaibhav Joshi)
- Answer: No major concerns. Bihar collection is at 95.4% and West Bengal at 94%. Overall portfolio collection efficiency is healthy at 98%, with X-bucket at 99.8% (HP Singh).
Write-offs & Provisions
- Question: What were the write-off numbers for Q3 and 9M FY26? (Chinmay Nema)
- Answer: Write-offs for 9M FY26 were ₹273 crores; the Q3 specific write-off was ₹160 crores (HP Singh).
Key Takeaway
Satin Creditcare delivered a resilient Q3 FY26 performance, marked by 10% YoY consolidated AUM growth to ₹13,341 crores and an 18th consecutive profitable quarter. Strategic focus has shifted toward geographic diversification, including entry into Kerala, and scaling non-MFI subsidiaries which now show growth rates of 40-50%. The company successfully diversified its liability profile, with 22% of funding now coming from foreign sources and DFIs, providing long-term stability. Management proactively addressed asset quality concerns by guiding for a reduced credit cost of ~4.0% for the full year and maintaining a robust 24.64% CRAR. With industry headwinds fading and “green shoots” appearing in the rural economy, Satin is positioned for a cautious 10-15% MFI growth while leveraging its new cybersecurity and tech ventures to enhance operational efficiency. This disciplined approach aims to balance moderate growth with high-quality underwriting to sustain long-term ROA targets above 2%.
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