Manba Finance Q1 FY27: Growth Holds Up, Diversification Moves Begin

Manba Finance Limited, a retail focused NBFC with a strong footprint in vehicle finance, started FY27 with steady growth and visible strategic additions. For Q1 FY27, the company reported total revenue of INR 92.6 crore, net interest income of INR 41.6 crore, and profit after tax of INR 13.3 crore. Each of these lines grew about 34% to 36% year on year, reflecting continued disbursement momentum and stable asset quality.

As on June 30, 2026, Manba’s AUM stood at INR 1,731 crore, up 22.3% year on year. Disbursements were INR 226.3 crore, up 36.9% year on year. The company also expanded its distribution footprint to 134 locations and 1,784 dealers, compared with 76 locations and 1,258 dealers in Q1 FY26. Management attributed the slower quarter on quarter AUM growth largely to seasonality, noting that the stronger two wheeler quarters tend to be Q2 and Q3 due to festivals.

What drove Q1: Disbursement momentum and stable margins

The quarter’s income statement shows that interest income rose to INR 85.1 crore in Q1 FY27 from INR 63.0 crore in Q1 FY26. Finance costs also increased, reaching INR 43.5 crore versus INR 32.4 crore. Net interest income still grew strongly to INR 41.6 crore. Fee and other income was INR 7.5 crore.

Operating expenses rose to INR 33.0 crore from INR 24.4 crore. Despite higher costs, profit before tax increased to INR 16.1 crore and PAT to INR 13.3 crore.

The investor presentation reported a net interest margin of 12.13% for Q1 FY27. It also disclosed cost of borrowings at 10.86% and an average yield on average AUM at 23.32%. Management indicated on the call that it expects net interest margin to remain in the 13% to 14% range, supported by a shift in product mix toward higher yielding products.

Note: INR million values in company disclosure have been converted to INR crore.

Book quality and secured focus remain central

Manba continues to position itself as a predominantly secured lender. The presentation states that 95% of AUM is secured, and management reiterated that over 95% of the portfolio is secured.

Asset quality metrics were stable. GNPA was 3.41% in Q1 FY27 versus 3.47% in Q1 FY26, while NNPA was 2.52% versus 2.64%. The company also disclosed a stage wise breakup of gross assets under Ind AS staging.

As of June 2026, Stage 1 assets were INR 1,619.1 crore, or 93.55% of gross assets. Stage 2 assets were INR 52.7 crore, or 3.04%, and Stage 3 assets were INR 59.0 crore, or 3.41%. Net Stage 3 was INR 43.6 crore, or 2.52%.

Provision coverage ratio was disclosed at 26% in FY26 and remained 26% in Q1 FY27. Capital adequacy ratio was 24.40% in Q1 FY27.

Diversification: still early, but management is pushing multiple levers

The company’s AUM mix continues to be dominated by two wheelers. In the Q1 FY27 product wise AUM mix, two wheelers formed 84.1% of AUM, three wheelers 3.1%, used car loans 1.5%, personal loans 5.1%, and others 6.2%.

Management acknowledged this concentration and stated a longer term target to reduce two wheeler dependence to around 65% within three years. It pointed to four key product lines as the main contributors to diversification: personal loans, top up loans, used two wheeler loans, and three wheeler loans. Small business loans and MSME LAP were also highlighted as incremental contributors.

South India entry via partnership model

A key strategic move in Q1 was the entry into South India through a partnership with Sreesastha, operating as Nammaloan. Management said the collaboration has started in Karnataka and will be followed by Tamil Nadu within FY27, with phased entry into other southern states thereafter.

Importantly, management gave a quantified expectation for this expansion. It expects AUM of around INR 60 crore to INR 75 crore through this partner in FY27, with a typical break even timeline of 9 to 12 months.

MSME LAP launch

During the quarter, Manba commenced disbursements under its MSME loan against property product, marking entry into secured MSME lending. Management said MSME LAP may form about 2% to 3% of the book by the end of FY27 given it is newly started this year. It also discussed a ticket size range of INR 8 lakh to INR 20 lakh, with INR 20 lakh as the maximum.

EV ecosystem: battery replacement finance

The company also launched a battery replacement finance product focused on lithium ion battery replacement for electric three wheelers. Management stated the product is initially offered to existing electric three wheeler customers and will be expanded gradually to the broader market. It also mentioned tie ups with OEMs and that OEMs may participate if issues arise, although detailed economics were not disclosed.

Funding, capital and shareholder actions

Manba highlighted diversified borrowing sources in its investor presentation, including term loans, NCDs, and PTC. It stated it raised INR 650 crore through non convertible debentures over the last two years at 10.5% ROI. On the call, management explained that borrowing was lower in the quarter due to comfortable liquidity as of March 31, 2026.

A notable forward action is capital raising. Management stated it is in the process of raising INR 100 crore by September or latest by October, and specified that it will be through preference shares.

The company also announced its first interim dividend of INR 0.25 per equity share of face value INR 10 for FY26 27.

Outlook: quantified AUM growth guidance and profitability targets

Management provided explicit guidance on growth and profitability.

It stated that it remains confident of delivering AUM growth of 35% to 40% during FY27. It also said it is targeting ROA of around 3.5% for FY27, driven by an increasing contribution from higher yielding products such as personal loans, top up loans and used two wheeler loans. Management also indicated net interest margin expectations in the 13% to 14% range.

Key takeaways

Manba’s Q1 FY27 performance shows that the company is maintaining strong growth in income and PAT while expanding distribution. The loan book remains heavily concentrated in two wheelers, but the strategic actions in the quarter suggest the diversification roadmap is moving from intent to execution.

The South India partnership, MSME LAP entry and battery replacement finance product are early stage initiatives, and their impact will depend on scaling and credit performance over the next few quarters. Meanwhile, the planned INR 100 crore preference share raise indicates management is preparing the balance sheet for the next leg of growth.

If the company can deliver on its stated 35% to 40% AUM growth guidance for FY27 while improving ROA toward the 3.5% target, the FY27 narrative is likely to be driven by both growth and mix improvement, not just scale.