Summary
SG Finserve Limited - Q3 FY26 Earnings Call Summary Friday, January 23, 2026 4:00 PM IST
Event Participants
Executives 3 Anubhav Gupta (Group Chief Strategy Officer), Sanjay Rajput (Chief Financial Officer), Vinay Gupta (Chief Executive Officer)
Analysts 6 Akhilesh Kumar (Individual Investor), Daksh Jain (Sagun Capital), Kushal Jajodia (Kushal Jajodia & Associates), Punit Mittal (Ebisu Investment Advisors LLP), Sangeeta Purushottam (Cogito Advisors), Shubham (Individual Investor), Sucrit D. Patil (Eyesight Fintrade Private Limited)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Loan Book (AUM) | ₹3,210 crores | +12% QoQ; record high driven by supply chain financing focus. |
| Profit After Tax (PAT) | ₹32 crores | +15% QoQ; 9M FY26 PAT stands at ₹85 crores (+49% YoY). |
| Return on Assets (ROA) | 4.4% | Annualized for 9M FY26; management targets 5% by FY30. |
| Return on Equity (ROE) | 10.5% | Annualized for 9M FY26; targets 15% by FY30 through increased leverage. |
| Asset Quality (GNPA) | 0.0% | Maintained nil NPAs since inception through disciplined underwriting. |
| Cost-to-Income | <15% | Reflects lean operating structure and digital-first approach. |
| Net Worth | ~₹1,100 crores | Expected to reach ₹1,450–1,500 crores by April 2026 after warrant conversion. |
| Leverage | ~2.0x | Conservative leverage; management plans to cap at 2.5x to 3.0x. |
Geographic & Segment Commentary
- Supply Chain Finance (SCF): This core segment contributes 70% of total AUM. It focus on anchor-led dealer and distributor financing, with a recent strategic push into granular, high-yielding Tier 2 dealer engagements.
- Non-Supply Chain Business: Comprising 30% of the book, this includes business loans, Loan Against Property (LAP), and Loan Against Shares (LAS) within the existing client ecosystem. These are highly secured exposures used to cross-sell to existing anchors and their partners.
- Factoring: Recently received RBI license to commence factoring business. This will target B2B trade between buyers and sellers, though management intends to take “baby steps” to ensure credit discipline.
Company-Specific & Strategic Commentary
- Management Transition: Mr. Vinay Gupta has taken over as CEO, succeeding Mr. Sorabh Dhawan. The transition is the primary driver for a more conservative near-term growth guidance to allow the new team to settle.
- Licensing Status: The company successfully transitioned to a Type II RBI license, which previously caused a 6-8 month operational halt and temporary AUM rundown.
- Subsidiary Expansion (Ideation): The board approved exploring four new subsidiaries: ARC, AIF, Insurance Broking, and FinTech. These are currently at the “drawing board stage” with no immediate capital allocation or hiring planned.
- Capital Infusion: ₹338 crores from share warrant conversion is due by April 2026, which will bolster the equity base for the next phase of growth.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| AUM CAGR | 20% through March 2030 | Revised down from previous aggressive targets; targets ₹7,500 crores by FY30. |
| Profitability CAGR | 30% through March 2030 | Targeted to reach Profit Before Tax (PBT) of ₹500 crores by FY30. |
| FY26 Closing AUM | ₹3,500 crores | Conservative estimate for the current fiscal year ending March 2026. |
| FY27 Closing AUM | ₹4,500 crores | Management prefers to “under-promise and over-deliver” following the leadership change. |
Risks & Constraints
| Risk | Context |
|---|---|
| Growth Deceleration | Guidance was revised downward from ₹6,000 crores to ₹4,500 crores for FY27, citing management transition and historical licensing delays. |
| Strategic Drift | Investors expressed concern over diversification into disparate fields like ARC and Insurance Broking, which may dilute the core SCF focus. |
| Funding Cost Risk | While currently AA rated with 18 bank relationships, any tightening in liquidity could impact the low-cost borrowing advantage. |
Q&A Highlights
Guidance Revision Rationale
- Question: Why was the AUM guidance for FY27 downgraded from ₹6,000 crores to ₹4,500 crores? (Kushal Jajodia)
- Answer: The company faced an 8-month halt due to license renewal and a recent change in top management. The goal is to set a conservative bar for the new team, with potential for upward revisions once stability is proven (Anubhav Gupta).
New Business Verticals
- Question: Why invest ₹400 crores into risky businesses like ARC or AIF when SCF has massive headroom? (Sangeeta Purushottam, Punit Mittal)
- Answer: These are board-approved “ideations” only. There is no plan to invest capital or hire for these verticals for at least 2-3 years. SCF remains the primary mandate, and the company will not leverage beyond 3x (Anubhav Gupta).
Asset Quality Maintenance
- Question: How do you maintain zero NPAs in the 30% non-SCF book? (Punit Mittal)
- Answer: These loans are highly secured by hard collateral (LAP) or liquid shares (LAS) within the known ecosystem of our anchors (Vinay Gupta).
Anchor Relationships
- Question: What is the current MOU size with anchors and the conversion timeline? (Daksh Jain)
- Answer: Total MOUs exceed ₹7,000 crores. Conversion typically takes one year to stabilize a program from lead generation to full utilization (Vinay Gupta).
Key Takeaway
SG Finserve delivered a steady Q3 FY26 with an all-time high AUM of ₹3,210 crores and 15% QoQ PAT growth, maintaining its hallmark zero-NPA record. The quarter was characterized by a strategic “reset” as new CEO Vinay Gupta took the helm, leading management to adopt a more conservative 20% AUM CAGR target through FY30 (₹7,500 crores). While the core supply chain finance business remains robust (70% of AUM), investor sentiment was tested by the announcement of proposed diversifications into ARC and AIF segments. Management reassured stakeholders that these initiatives are in the ideation phase and will not involve immediate capital deployment. Supported by a impending ₹338 crore capital infusion and a strong ROA of 4.4%, the company remains focused on low-leverage growth within its established anchor ecosystem. Investors should monitor the pace of new anchor onboarding and potential “scope creep” into non-core financial services.
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