Manba Finance Rides High: A Deep Dive into Q2/H1 FY26 Performance

Manba Finance Limited, a prominent Non-Banking Financial Company (NBFC) in India, has delivered a robust performance in the second quarter and first half of the financial year 2026, showcasing significant growth across key metrics. The company's unaudited standalone financial results highlight its strategic focus on expanding its asset under management (AUM), enhancing operational efficiency through digital transformation, and prudently managing its credit portfolio. These achievements come amidst a dynamic market environment, with the company successfully navigating challenges and capitalizing on emerging opportunities.

For the first half of FY26, Manba Finance reported a total revenue of INR 146.6 crore, marking a substantial increase from the previous year. Net Interest Income (NII) for H1 FY26 stood at INR 68.2 crore, reflecting a healthy 20.7% year-on-year growth. This growth was primarily driven by steady loan book expansion and improved funding efficiencies. Profit After Tax (PAT) for the half-year surged by 25.6% to INR 21.1 crore, underscoring the company's commitment to sustainable and profitable expansion. The AUM reached INR 1,500.8 crore, demonstrating a robust 36% year-on-year growth. The company's net interest margin remained strong at 12.56% for the period, indicating effective management of its interest-earning assets and liabilities.

Strategic Initiatives and Operational Excellence

Manba Finance's impressive performance is underpinned by several strategic initiatives and a relentless focus on operational excellence. The company has significantly expanded its distribution network, now operating across 103 locations in 6 states with a network of over 1,250 dealers. This expansion has been a key driver of its growth, particularly in the two-wheeler segment, which continues to be its core strength. The company's ability to sanction over 60% of loans in one minute and 92% within a day highlights its commitment to customer-centricity and efficient processes.

In a notable development, Manba Finance achieved its highest-ever monthly disbursement of INR 174.36 crore in October 2025, serving 22,308 customers in a single month. This milestone was supported by strong demand in the two-wheeler segment, geographical expansion, and the addition of new locations. The management acknowledged that disbursement growth during Q2 was impacted by a delay in the announcement of the expected GST rate card, but the subsequent clarity has fueled a significant sales momentum in October.

Digital Transformation and Portfolio Diversification

Manba Finance is actively embracing digital transformation to enhance efficiency and customer experience. During the quarter, it launched instant disbursement via JustPay, implemented a straight-through process (STP) for used two-wheeler loans (a first for an NBFC in the industry), and integrated DigiLocker for seamless, paperless loan documentation. These technological advancements are crucial for scaling operations and improving service delivery.

Beyond its traditional offerings, the company is strategically diversifying its product portfolio. While used car financing has seen slower-than-expected traction, prompting a strategic shift towards a co-lending model to attract the right customer profile, the small business loan portfolio is performing well, with its AUM growing from INR 4.8 crore to INR 7 crore in Q2 FY26. Looking ahead, Manba Finance plans to launch a secured MSME Loan Against Property (LAP) by January, further expanding its secured loan offerings and diversifying its revenue streams. The company is also focusing on financing Electric Two-Wheelers (EV2Ws) and Electric Three-Wheelers (EV3Ws), capitalizing on the growing demand for electric vehicles driven by high fuel prices.

Asset Quality and Funding Landscape

Manba Finance continues to maintain robust asset quality, with Gross NPA (GNPA) at 3.52% and Net NPA (NNPA) at 2.68% for H1 FY26. Credit losses for the quarter remained below 1%, supported by adequate provisions of INR 3.32 crore. The company's capital adequacy ratio remains strong at 26.54%, providing a solid foundation for future growth. On the funding front, Manba Finance has diversified its sources, borrowing from 3 public sector banks, 10 private sector banks, and 25 NBFCs. The average cost of borrowing currently stands at 10.67%, benefiting from improved lender relationships, favorable market conditions, RBI rate cut benefits, and a recent credit rating outlook upgrade from Stable to Positive. The management anticipates a further reduction in borrowing costs by 25 to 50 basis points in the coming quarter.

Outlook and Investor Confidence

Manba Finance is poised for continued growth, with management guiding for an AUM of INR 1,700-1,750 crore by the end of FY26 and expecting a 30-35% CAGR growth in AUM for the next financial year. The company's proactive approach to geographical expansion, product diversification, and digital innovation, coupled with its strong asset quality and robust funding, instills confidence. The recent record-breaking performance in October 2025, driven by a surge in two-wheeler demand post-GST clarity, sets a positive tone for the upcoming quarters. Manba Finance's commitment to responsible growth, financial inclusion, and customer-centric lending positions it well to capitalize on India's evolving financial landscape.