This is the sixth loss in a row due to continued asset quality quality stress and loan write-offs.
“Despite steady progress in collection efficiency, the third quarter opened with gross slippages, resulting in a loss for the quarter. This was primarily due to stress in the loan portfolio originating in prior years,” managing director Venkatesh Krishnan said in a note.
The microfinance company’s gross non-performing assets came lower to
4.24% at the consolidated level, from 5.62% three months prior.
“The microfinance sector inched closer to normalcy in the third quarter after six very challenging quarters,” Krishnan said.
The lender grew loan disbursement by 27% quarter-on-quarter at Rs 1188 crore. Its gross loan book however continued to contract to Rs 3,079 crore at the end of December from Rs 5,555 crore at the beginning of the fiscal.
The company recognized technical write-offs with principal outstanding of Rs 208 crore in the quarter under review. The write-off amount was Rs 1,155 crore for the first nine month of the fiscal.
The lender continued to remain non-compliant with certain covenants while it obtained waivers in respect of such non-compliant covenants from few of the lenders. Krishnan said the company has been in constant communication with its lenders and is confident that no material demand for immediate repayment of borrowed funds will be made due to non-compliance with the covenants.
Its capital position however remained strong with a capital to risk-weighted assets ratio at 30.43%.
“The company’s healthy CRAR has the ability to support current operations and much of its future growth projections. With the implementation of industry guardrails, the broader ecosystem is expected to become more credit-disciplined, contributing to sustainable improvements across key performance metrics,” the MD said.
The group has recognised a deferred tax asset of Rs 643 crore as at December 31, 2025 to the extent it is considered recoverable, based on probable future taxable income supported by revised approved business plans and budgets.