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Informist, Monday, Oct. 26, 2026

 

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--SBFC Fin: Stengthened our focus on secured MSME customers 
--CONTEXT: Comments from SBFC Finance mgmt at post-earnings analyst call 
--SBFC Fin: Half of our book linked to MCLR, 20% of book linked to repo rate 
--SBFC Fin: We don't see El Nino affecting our portfolio, remain watchful 
--SBFC Fin: Branches in Maharashtra, Karnataka saw some impact of El Nino 
--SBFC Fin: Continue to guide for incremental growth in AUM, disbursals 
--SBFC Fin: Raised prime lending rates by 25 bps after Oct repo rate hike 
--SBFC Fin: Impact of rising oil prices, El Nino on customers yet to come 
 

 

By Nandini Sinha and Deesha Jadhav

 

MUMBAI – SBFC Finance Ltd. does not see El Nino impacting its portfolio but remains watchful, the lender told analysts at a post-earnings conference call Monday. The non-banking financial company announced its results for the September quarter Saturday. 

 

"In India, the impact of the three Fs -- fuel, fertiliser and foreign exchange--on top of a super El Nino is juxtaposed with a resilient domestic demand," an official said. "We do not currently see signs of it affecting the portfolio, but we continue to remain watchful even at a region level."

 

Major impact of El Nino was seen in branches in Maharashtra and Karnataka, the company said. "So there is a lot of tightening which we already have done which is helping us and, in fact, now the state of Karnataka is stabilising. It is showing better outcomes going forward. So as on today, there is no impact which we are seeing," an official said.  

 

The impact of the rise in interest rates and crude oil prices on consumers is yet to be realised, the company said. However, the credit cost would probably be around 1.4-1.5% for a significant time, it said. For the September quarter, the lender's credit cost rose 21 basis points on year to 1.4%.

 

SBFC Finance reported the third straight quarter of growth since it repositioned its lending mix in the September quarter of 2025-26 (Apr-Mar), the company said. "You cannot reliably predict every turn in the cycle, but you can prepare your business to respond to it," an official said.

 

 

"We have repositioned our lending mix, strengthened our focus on secured MSME (micro, small, and medium enterprise) customers, and are now seeing the early benefits of that transition." Disbursements in the micro, small, and medium enterprise segment grew 6% on quarter and 5% on year to INR 8.55 billion in the September quarter.

 

The lender expects to see some repricing of its loan book after the Reserve Bank of India's Monetary Policy Committee raised the policy repo rate by 25 basis points to 5.50% earlier this month. "...we will see some repricing of our book, which has a mix of benchmark it is linked to. We have half of our books linked to MCLR (marginal cost of funds-based lending rates), close to 20% linked to repo rates, with other portion being T-bill (Treasury bills) and other external benchmarks with a small portion of fixed-rate loan as well, an official said.

 

SBFC Finance said it has raised the prime lending rates by 25 bps following the hike in the repo rate, officials told analysts. The cost of funds is expected to rise post the hike and the pricing has been passed on to the customers in October, they said.

 

The company said it expects more rate hikes to come. "These aren't controllable for us. How we manage our borrowing costs and reprice our variable rate portfolio of loans is in our hands. And we will focus on the controllable. We don't have to worry so much about the health of the economy at our size," the management said. 

 

The momentum of growth in the micro, small, and medium enterprise segment has picked up after a pause in some states that came as a result of the repositioning to slightly larger tickets, and transition of employees, the company said. "But now the momentum is back, the repositioning is done, the restaffing in most of the locations is done, so that is the reason we continue to guide for incremental growth both in AUM (assets under management) and disbursal (of loans) from here," an official said.

 

SBFC Finance's net profit for the September quarter rose 27% on year to INR 1.39 billion, supported by a healthy rise in interest income. Total revenue from operations grew over 33% on year to INR 5.46 billion. At 1135 IST, shares of the lender were down over 1% at INR 78.92 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Himanshi Gupta

 

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