Finkurve Q2 profit rises 62% while loan return falls

Finkurve reported Q2 FY27 profit of Rs 9.60 crore, up 62.21% year-on-year, while return on average loan assets fell to 3.0% from 3.9% as finance costs rose to Rs 30.57 crore from Rs 8.42 crore. Total income nevertheless increased 87.76% to Rs 90.39 crore during the quarter.

How much did Finkurve’s Q2 FY27 profit grow?

Finkurve’s profit for Q2 FY27 rose 62.21% year-on-year to Rs 9.60 crore from Rs 5.92 crore and increased 13.78% from Rs 8.44 crore in Q1 FY27. Profit before tax increased 75.30% to Rs 12.96 crore from Rs 7.39 crore, while tax expense rose to Rs 3.36 crore from Rs 1.47 crore.

Finkurve’s revenue from operations increased 87.17% year-on-year to Rs 89.93 crore and 19.75% sequentially from Rs 75.10 crore. Interest income was Rs 88.80 crore, compared with Rs 47.69 crore in Q2 FY26 and Rs 74.79 crore in Q1 FY27, making it the main component of quarterly revenue. Total expenses rose to Rs 77.43 crore from Rs 40.75 crore a year earlier.

For H1 FY27, Finkurve reported profit of Rs 18.04 crore, up 63.84% from Rs 11.01 crore in H1 FY26. Total income rose 88.50% to Rs 166.21 crore, while profit before tax grew 69.86% to Rs 24.16 crore. Finance costs for the six-month period were Rs 57.29 crore, compared with Rs 15.53 crore a year earlier.

Why did Finkurve’s return on average loan assets decline?

Finkurve’s return on average loan assets declined to 3.0% in Q2 FY27 from 3.9% in Q2 FY26 because net interest margin fell to 18.0% from 25.6%. The return measure improved from 2.9% in Q1 FY27, but remained below 3.3% in Q4 FY26 and 3.7% in Q3 FY26. Return on average equity, by contrast, increased to 10.7% from 7.3% a year earlier.

Interest income divided by average assets was 27.5% in Q2 FY27, down from 31.1% in Q2 FY26 but above 25.3% in Q1 FY27. Interest expense divided by average assets increased to 9.5% from 5.5% a year earlier and 9.0% sequentially, producing the lower margin. Employee benefits expense was 5.1% of average assets, compared with 2.9% in Q2 FY26, while impairment was 0.5%, against 3.5% a year earlier.

How did Finkurve’s funding and balance sheet change?

Finkurve’s debt-security borrowings rose to Rs 520.92 crore at 30 September 2026 from Rs 293.25 crore at 31 March 2026, an increase of Rs 227.67 crore. Borrowings other than debt securities fell to Rs 402.86 crore from Rs 542.68 crore, a decline of Rs 139.82 crore. The shift occurred alongside Q2 FY27 finance costs of Rs 30.57 crore, up from Rs 8.42 crore in Q2 FY26.

Finkurve’s loans increased to Rs 1,225.09 crore at 30 September 2026 from Rs 1,070.34 crore at 31 March 2026, while total assets rose to Rs 1,361.52 crore from Rs 1,233.04 crore. Cash and cash equivalents declined to Rs 84.24 crore from Rs 102.12 crore, and other equity rose to Rs 350.51 crore from Rs 330.90 crore. Debt to equity was 2.53 times in Q2 FY27, lower than 2.88 times in Q1 FY27 but above 1.15 times in Q2 FY26.

Capital adequacy was 28.7% in Q2 FY27, compared with 26.6% in Q1 FY27 and 47.1% in Q2 FY26. The sequential increase followed the reduction in the debt-to-equity ratio, while the year-on-year comparison shows a lower capital-adequacy ratio despite higher other equity. Equity share capital was unchanged at Rs 14.01 crore between 31 March 2026 and 30 September 2026.

Which lending segment drove Finkurve’s income and assets under management?

Gold loans generated Rs 64.5 crore of Finkurve’s Q2 FY27 interest income, or 72.6% of the segment total, compared with Rs 27.9 crore and 58.4% in Q2 FY26. Personal loans generated Rs 23.7 crore, or 26.7%, compared with Rs 19.3 crore and 40.4% a year earlier. Other lending contributed Rs 60 lakh, representing 0.7% of segment interest income.

Gold loans represented 95.6% of Finkurve’s Q2 FY27 assets under management, including off-book assets, compared with 91.0% in Q2 FY26. Gold-loan assets under management increased to 1,257 from 612 over that period, while personal-loan assets under management rose to 48 from 45. The presentation therefore shows that the reported asset expansion was concentrated in gold loans.

The yield on Finkurve’s average gold-loan book was 20.8% in Q2 FY27, compared with 20.1% in Q2 FY26 and 20.0% in Q1 FY27. Gold holdings were 1,162 kilograms, slightly below 1,167 kilograms in Q1 FY27, and the average ticket size fell sequentially to Rs 1.79 lakh from Rs 1.87 lakh. The gold-loan loan-to-value ratio rose to 80.4% from 77.3% in Q1 FY27 and 64.4% in Q2 FY26.

Conclusion

Finkurve combined rapid revenue and profit growth with a lower return on average loan assets than a year earlier. Q2 FY27 total income rose 87.76% to Rs 90.39 crore and profit rose 62.21% to Rs 9.60 crore, but the increase in finance costs to Rs 30.57 crore coincided with a net interest margin of 18.0%, versus 25.6% in Q2 FY26.

The unresolved issue is whether Finkurve can extend the sequential net-interest-margin improvement from 16.2% in Q1 FY27 to 18.0% in Q2 FY27 while interest expense reaches 9.5% of average assets. Investors can also track changes in the 80.4% gold-loan loan-to-value ratio, the 20.8% gold-loan yield and debt-security borrowings of Rs 520.92 crore.