Mufin Green Finance Q4 FY26: Profits rise as the loan book scales and asset quality improves

Mufin Green Finance Limited closed Q4 FY26 with a sharp step-up in profitability, supported by a much larger loan book and steady operating control. Assets under management reached Rs 1,541.17 crore at March 2026, up 83.8 percent year on year from Rs 838 crore a year earlier. That expansion translated into higher interest income of Rs 63.81 crore in Q4 FY26 versus Rs 40.21 crore in Q4 FY25, while profit after tax rose to Rs 11.03 crore from Rs 3.89 crore.

For the full year FY26, the picture is similar but more informative. Total disbursements rose to Rs 1,767.59 crore, and interest income reached Rs 206.98 crore. Net interest income grew to Rs 86.93 crore, while profit after tax increased to Rs 28.21 crore from Rs 20.28 crore. The company also reported improving credit metrics, with gross NPA at 1.94 percent and net NPA at 1.65 percent at March 2026, both lower than the prior year. Capital adequacy remained strong, with CRAR at 32.37 percent.

The year matters because it captures the operating design that the company is pushing: grow disbursements and AUM, improve borrowing costs through a rating upgrade and diversified liabilities, and keep credit losses contained across a mixed portfolio that includes Medicaim financing, EV and solar financing, Salary Saathi, and other secured loans.

Growth at pace, with operating leverage showing up

The headline growth in FY26 sits on two operating trends. First is scale. Net AUM rose quarter by quarter from Rs 944 crore in Q1 FY26 to Rs 1,541 crore in Q4 FY26. Quarterly disbursements also moved up through the year, from Rs 322 crore in Q1 FY26 to Rs 700 crore in Q4 FY26.

Second is operating leverage. Even as cumulative disbursements for FY26 climbed to Rs 1,768 crore by Q4, total headcount fell from 499 in Q1 FY26 to 420 in Q4 FY26. That is a 15.83 percent reduction while disbursements grew 5.5 times over the same period. The company reported disbursement per employee of Rs 4.21 crore and has stated a FY27 target of 300 headcount. This matters because the P and L shows operating expenses in Q4 FY26 at Rs 10.40 crore, almost flat versus Rs 10.45 crore in Q4 FY25 even though the scale of business was much higher.

The earnings build is visible in net interest income and profit. Q4 net interest income grew 50.7 percent year on year to Rs 26.31 crore. For FY26, net interest income grew 24.2 percent to Rs 86.93 crore. On a full-year basis, profit before tax rose to Rs 37.98 crore from Rs 27.32 crore, and profit after tax rose to Rs 28.21 crore from Rs 20.28 crore.

At the same time, credit costs did not spike with growth. Provisions and write-offs were Rs 1.30 crore in Q4 FY26 versus Rs 1.75 crore in Q4 FY25. For FY26, provisions and write-offs were Rs 7.05 crore.

Portfolio mix: four engines, each with its own risk logic

Mufin Green Finance positions itself as an RBI-registered NBFC focused on financing India’s green transition, while also running products that are designed for short tenure or salary-backed repayment. As of March 2026, the company reported AUM of Rs 1,541.17 crore and operates across four verticals.

Medicaim financing is presented as the flagship product and accounts for about 39 percent of AUM. The product converts lump-sum health insurance premiums into EMIs with a stated yield range of 18 to 24 percent, an average ticket size of Rs 55,000, and a tenure of 2 to 36 months. The company highlighted more than 10 insurer partners and an embedded point-of-sale model. It also disclosed a pool rating of CRISIL A+ (SO) on securitized pools and AUM of Rs 607.88 crore for this segment.

Salary Saathi is a smaller book at around 2 percent of AUM, with an AUM of Rs 26.40 crore. It is positioned as a salary-backed personal loan product for government and PSU employees, with salary deduction at source. The company describes the expected NPA as near zero because repayment is linked to payroll, supported by state government MoUs. Product parameters include an average ticket size of Rs 4,00,000, tenure of 1 to 60 months, and yield of 12 to 20 percent.

EV and solar financing is a meaningful part of the platform. The company reported that this vertical represents 30 percent of AUM and provided a split between B2C and B2B AUM. B2C AUM was Rs 166.04 crore and B2B AUM was Rs 293.00 crore. The segment covers electric three-wheelers, electric four-wheelers, buses, batteries and chargers, and solar panels. The stated yield range is 15 to 24 percent, with tenures of 12 to 48 months. The company emphasized collection efficiency of 97.71 percent and linked the segment’s risk management to AI-led underwriting and IoT-enabled portfolio monitoring.

Other loans form around 29 percent of AUM and are described as scalable, secured and aligned to RBI priority sector eligibility. The company reported Rs 447.85 crore in this bucket, describing it as 100 percent collateral backed and 0 percent unsecured. Product parameters include loan ticket sizes from Rs 2,00,000 to Rs 20,00,00,000, tenures of 6 to 36 months, and yields of 15 to 18 percent.

Because each product has a different repayment structure, the portfolio mix becomes a key part of understanding the credit profile. Medicaim loans are short tenure and purpose-specific. Salary Saathi depends on deduction at source. EV and solar are asset-backed and monitored. Other loans are collateral backed and built on GST and banking data underwriting.

Asset quality and capital: credit metrics improve as the book grows

In a fast-growing NBFC, the most important test is whether credit quality holds. Mufin Green Finance reported a continued improvement in asset quality. Gross NPA declined to 1.94 percent in Q4 FY26 from 2.50 percent in Q4 FY25. Net NPA declined to 1.65 percent from 2.13 percent.

The company also showed a sharper reduction in early stress indicators. Stage 2 assets declined to 5.90 percent in Q4 FY26 from 11.91 percent in Q3 FY26 and 12.60 percent in Q4 FY25. Provision coverage was reported at 35.95 percent in Q4 FY26.

Collection efficiency was stated as consistently more than 96.5 percent, which aligns with the direction of NPAs and Stage 2 reduction. The EV and solar portfolio itself was highlighted with a collection efficiency of 97.71 percent.

Capital levels remained a clear buffer. At March 2026, net worth was Rs 574.65 crore, up from Rs 270.25 crore at March 2025. Total assets were Rs 2,027.51 crore versus Rs 1,021.38 crore. CRAR stood at 32.37 percent, comfortably above the 15 percent regulatory minimum.

Leverage also stayed within a moderate band for a growing lender. Debt to equity was 2.43 times at March 2026, compared with 2.60 times at March 2025.

Cost of funds and liabilities: the rating upgrade starts to matter

A second lever shaping medium-term profitability is borrowing cost. Through FY26, the company reported a decline in cost of borrowings from 13.80 percent in Q1 FY26 to 12.17 percent in Q4 FY26, a reduction of 163 basis points. Management attributed this to the credit rating upgrade and an evolving liability mix that includes co-lending and capital markets instruments.

The company’s Acuite rating moved from BBB in FY23 and FY24 to BBB+ in FY25 and A- with stable outlook in FY26. The company expects this upgrade to reduce borrowing costs by 50 to 80 basis points as new lenders price at tighter spreads. It also highlighted that a higher rating broadens access to insurance companies, pension funds, and international DFIs.

Borrowings at March 2026 were Rs 1,397.60 crore, up from Rs 703.67 crore at March 2025, which is consistent with the near doubling of total assets and loan book. The company described a diversified liability franchise with 40 plus lenders and a borrowing mix across private banks, PSUs, DFIs, NBFCs and financial institutions, and NCDs. The mix for FY26 was stated as private banks 10 percent, PSUs 15 percent, DFIs 18 percent, NBFC and others 37 percent, and NCDs 20 percent.

This structure matters because a lowering cost of funds can protect net interest margins even when competition increases in retail and EV-linked lending. It also provides flexibility to redeploy capital into higher-growth verticals without concentrating funding sources.

What investors should take away from FY26

Mufin Green Finance ends FY26 with a clear operating theme: scale the loan book, lower funding costs, and improve credit metrics at the same time. The year delivered strong growth in AUM and disbursements, a meaningful rise in profits, and improving asset quality. It also showed that operating expenses can remain controlled even as the platform expands.

The company’s product design is an important part of the story. Medicaim financing relies on point-of-sale integration and short tenures. Salary Saathi is built on salary deduction at source with state government MoUs. EV and solar financing is backed by assets and monitored with a focus on yield optimization and NPA minimization. Other loans are positioned as collateral backed and PSL aligned.

The next set of investor questions will likely center on two issues: whether the decline in borrowing cost continues towards the company’s stated FY27 target of below 10 percent, and whether the portfolio can maintain low NPAs while growing from the current base of Rs 1,541 crore AUM. With CRAR at 32.37 percent and a diversified borrowing base, the balance sheet has room. The execution test will be to keep collection efficiency high, maintain the downward trajectory in Stage 2 assets, and ensure operating leverage does not reverse as the company pursues higher scale.