Manba Finance Ltd (NSE: MANBA) Q1 2026 Earnings Call dated Aug. 05, 2025
Corporate Participants:
Unidentified Speaker
Tushar Pendharkar
Manish Kiritkumar Shah — Managing Director
Jay Khushal Mota — Chief Financial Officer
Analysts:
Unidentified Participant
Nemin Doshi — Analyst
Mar Jahan — Analyst
Mitul Shah — Analyst
Mitul Shah — Analyst
Sudharsan Nachimuthu — Analyst
Presentation:
operator
Finance Limited Q1 FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Foreign.
operator
Welcome to Mama Finance Ltd. Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Ltd. Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Ltd. Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1 FY26 Result Conference.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1 FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Limited Q1FY26 result.
operator
Conference for please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1 FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1 FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY 2060 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1 FY26 result.15.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Foreign.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FI.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Foreign.
operator
Welcome to Mamba Finance Limited Q1FY26 result. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Limited Q1FY26 Adult Conference Call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mamba Finance Limited Q1FY26 results. Conference call.
operator
Please stay connected. Your conference will begin shortly.
operator
Welcome to Mama Finance Limited Q1FY26 without confidence, call.
operator
Please stay connected. Your conference will begin it shortly.
operator
Welcome to Mamba Finance. Your conference is being recorded.
operator
Ladies and gentlemen, good day and welcome to the Manba Finance Limited Q1FY26 earnings conference call hosted by Ventura Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. Before we begin, I would like to point out that this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on.
operator
Date of this call.
operator
These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. I would now like to hand over the floor to Tushar from Ventura securities. Thank you. And over to you Tushar.
Tushar Pendharkar
Thank you. Good day.
Tushar Pendharkar
Ladies and gentlemen, on behalf of Ventura Security I welcome you all to the Manipa Finance Limited Q1FY26 earnings conference call.
Tushar Pendharkar
The company is today represented by Mr.
Tushar Pendharkar
Manish Shah, Managing Director and Mr. Jay Mota, Executive Director and CFO of the company.
Tushar Pendharkar
I would now like to hand over.
Tushar Pendharkar
The call to Mr. Manish Shah for his opening remarks.
Tushar Pendharkar
Thank you.
Tushar Pendharkar
And over to you sir.
Manish Kiritkumar Shah — Managing Director
Thank you Tushar. Good afternoon all everyone. Thank you for joining Manda Finance Limited earning call today to discuss the performance for the first quarter of financial year 2026. I would like also like to thank Ventura securities for hosting this earning call. In the interest of some of the people who are new to the company. Let me first start by giving a brief overview of the company and operational highlights followed by. Our CFO will brief you on the financial performance for the first quarter. Manma Finance is an nbfc. A range of financial solutions including loans to new two wheeler, three wheeler, used cars, small business loan, pop up loan and used two wheeler loans.
We are currently operating in 76 locations across six states. Precisely Maharashtra, Gujarat, Rajasthan, MP, Chhattisgarh and UP. Our distribution network includes over 1250 plus dealers. We have secured funding from three public sector banks, nine private sector banks and 25 NBFCs. We also have a co lending arrangement with Muthu Capital Services. We have a total team size of 1522 employees out of which more than 700 plus employees are part of our sales team. Our internal collection team ensures lowest NPA in the industry. The company commands one of the fastest turnaround times for loan sanctioning in the industry.
With over 60% of loans sanctioned in one minute and 92% of the loans sanctions on the same day. Now let me discuss some of the key operational highlights. For the first quarter of financial year 2026 our asset under management AUM stood at 1415, 1415 crore reflecting a robust year on year growth of 43%. We also achieved a record high disbursement of 165 crore rupees in quarter 1 FY26 up from 130 crore in the quarter 1 FY25 which is almost a 27% growth. This strong growth was driven by the continued expansion of our dealer network. We added one to 58 dealers at the quarter end which has grown by 77% or year on year.
We have expanded to 76 locations. In other updates, we forged several new tie ups during the quarter in both used two wheelers and used four wheeler segment which is a new for the company. Additionally we entered into business correspondence partnership with Prosperity, Finn, Cooper and Omraj to further enhance our market reach. The launch of new collection app has also significantly improved our collection efficiency. We are also proud to say that Manma Finance has now been qualified as a mid layer RBI NBFC. Now I request our CFO and executive director Mr. Jai Mota to brief you on financial performance.
Jay Khushal Mota — Chief Financial Officer
Thank you Mari sir and good afternoon everyone. Let me provide a brief overview of the financial performance for the first quarter of the financial year 2026. For the first quarter under review, our net interest income stood at rupees 31 crore reflecting a 38% year on year growth with the net interest margin of 12.43%. Profit after tax for the quarter was around rupees 10 crore which grew by 89% year on year. The cost of borrowing currently stands at 11.05%. Our GNPA stood at 3.47% and NNPA was 2.64% as of 30 June 2025 while our capital adequacy ratio stands at 28.21%.
With this we can now open the floor for the question and answer session.
Jay Khushal Mota — Chief Financial Officer
Thank you.
Questions and Answers:
operator
Thank you Scott. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press Star and one on the telephone keypad and wait for your turn to ask questions. If you would like to withdraw your request, you may do so by pressing Star and one again. Ladies and gentlemen, if you have any questions please press Star and one on your telephone keypad. We will wait for a moment while the question queue assembles. First question comes from Nimin Doshi from Geojit cms. Please go ahead.
Nemin Doshi
Thanks for this opportunity. I have a couple of questions. Firstly, with respect to interest income, just going through your financials it seems that there has been sequential decline in interest income from 65.5 crores to 63 crores. So what explains this while our AUM has grown. Secondly, what explains the steep increase in borrowing costs and other income for that matter for. For Q1.
Jay Khushal Mota
Yeah.
Jay Khushal Mota
Hello.
Jay Khushal Mota
Hi.
Jay Khushal Mota
Am I audible?
Nemin Doshi
Yes.
Jay Khushal Mota
So the decree, the decrease in the interest income is due to the change in the report 8 and everything. So we have to be also reduced the rate of interest to the customer. So that’s why there was a slight decrease in the. This we can say in the interest income, total income.
Manish Kiritkumar Shah
Okay. Secondly, in the same on the same line there is a. From the January to tighten our credit we have restricted our loan to value. And for that we are offering a low rate of interest. So eventually it is going to be helpful for better fba. So my gross, you know, income has been reduced. That is also one of the reason.
Nemin Doshi
Okay. Okay. So sir, I believe most of our loans would be fixed in nature. So this would be for the incremental loan that we have discussed, right?
Manish Kiritkumar Shah
Yeah. So that is this has started from January and as we know that this is a very short term loans average loan tenure is only 24 months only. So immediately it starts reflecting, you know, quarter on quarter.
Nemin Doshi
Okay. Okay. And what explains the increase in finance cost? For that matter
Jay Khushal Mota
increasing finance cost was due to. We are keeping a good liquidity with us right now somewhere around 150 to 200 crore with us to strengthen our balance sheet. And second normally we used to do 2 to 3 PTC transaction which gives us the lower rate of interest. But this month we have not done this quarter. So we are exploring the PTC transaction in coming quarter, quarter two or maybe quarter three.
Nemin Doshi
Okay. Okay. So what is our rate of interest for the new loans from the 1st of January.
Jay Khushal Mota
So our new loan interest to the customer where you know we are restricting LTV up to 75%. That strengths for 18 to 19 IRR and between 75 to 85% we are giving a 20 to 21 IRR and the mix of the business in these two LTV category is around in this up to 75%. We are doing almost 60% of overload.
Nemin Doshi
Okay. Okay. So up to 60%. So largely our yield would be in the range of 2020 to 21%.
Jay Khushal Mota
5 to 20. Yeah.
Nemin Doshi
Okay, going ahead sir, how should we see this panning out given the interest rate that has happened and our loan book is more or less fixed in nature. It’s a high yielding book for us. So how should the NIMS progress even on the credit cost front? What do you expect? And do you see any asset quality issues which is the reason why you have started offering lower LTV for that matter. Is that the case?
Jay Khushal Mota
So our assets so far behaving very nicely. But the moment from, we all know from September, you know MFI and Barcelona is affected. So, so these are, these are the. Some of the customers who are also take, keep taking the personal loan and they keep serving both the EMIs here and there. So that’s the reason we have reduced our LTV to that. You know once the customer is having a 20 to 25% of equity, there is a very rare chance that he will, you know, not serve this loan properly.
Nemin Doshi
Okay, okay, okay. Nothing, nothing to read into pcr. Will there be increase in provision coverage going ahead? Because we are at 20 to 25% whereas peers would be approximately 40 to 50% with respect to provision coverage. Any, any thoughts on that?
Jay Khushal Mota
Yeah. So as far as my competitors are concerned their credit loss is around 2.5 to 3% and some as having a 4 and 5 also. Whereas my credit loss across in last couple of many years is not even more than 1%. Also it is always less than 1% so my eventual credit loss is very less still. Every year on year we are increasing the PCR to strengthen our balance sheet because it has started the journey with 10% then 13. Then in 23, 24 we made it 16.5, 24, 25 we made 20 and last year we made it 24.
Then this year we are targeting to make it 26 or 27.
Nemin Doshi
Okay, okay, got it, got it. Lastly, your strategy around the next few years, how would you be planning towards the growth with respect to your asset mix? Will it be more focused towards two villas, three villas or personal loans which is high yielding segment for you, will that contribute given the fact that you are facing some of the asset quality issues over there? So what would be the mix and the strategy around your AUM growth and mix for the couple of years going ahead?
Jay Khushal Mota
Yeah, so today my you know tubular contribution to the net total AUM is around 82%. My top up is around 7% and the additional 10% all other products are there such as a 3 wheeler used car and small business loan. So over every year you know our concentration on two wheeler of course will remain major. But in a three years time we would like to bring it to 70% to the total book size 65 to 70% and balance it will grow with the EV financing, three pillar personal loan and small business loan will always be, you know very very cautiously will grow because that is the only unsecured loan company is into which is today even not even a 4% of my total.
Nemin Doshi
Okay. Okay sir, last question from my side.
Jay Khushal Mota
Further clarify that in the next two to three year also the unsecured portfolio will remain under 10% only.
Nemin Doshi
Okay? Okay.
Nemin Doshi
Okay.
Nemin Doshi
Got it. So lastly, is it fair to assume that your AUM growth will be on a lower base? It would be 35 to 40%. Whereas your pad growth given the fact that you will be. You will be investing more towards the distribution and distribution and technology side. Will that be on a lower end or that would exceed 35 to 40% given the operating leverage will come into play.
Jay Khushal Mota
Yeah. So as a philosophy we want to grow by 30 35% only. Not even 35 to 40 because this is a retail products. So 30 to 35% if you grow then only you will be able to you know focus and keep a proper bandwidth on the collection side.
Nemin Doshi
Okay. Okay. So 30 to 35% both on AUM as well as on the PAT side. Right?
Jay Khushal Mota
Yeah.
Nemin Doshi
And last one last thing sir. What explains the jump in other income? It’s 2 crores for the quarter.
Jay Khushal Mota
So that 2 crore is like maturity amount we have received from the LIC for towards the key main policy we have taken in earlier year. So it was 2 crore we have received upon the maturity in the company only.
Nemin Doshi
Okay.
Nemin Doshi
Okay.
Nemin Doshi
Thank you. Thank you so much and all the very best.
Jay Khushal Mota
Yeah, thanks.
operator
Thank you. The next question comes from DAM Capital. Please go ahead.
Unidentified Participant
Hello sir. Thank you for the opportunity. So I have two questions. The first question is in Kwaki answer. So sir, in terms of our segments where we operate in, are you seeing any stress particular which could be a bigger going ahead considering we are into small business and vehicles and other players have also alluded to some stress in this segment. That was the first question. And secondly value given an AUM growth guidance of 30 35%. How do we think of a long term strategy in terms of profitability for.
Unidentified Participant
Next two to three years?
Unidentified Participant
So see in one of our calls we had mentioned our pact would be touching 100 crores by FY27. So are we on track for this? How to think about this? Those are the two questions.
Jay Khushal Mota
Yeah. So as far as stressed. First question, your first question is concerned as I already told you that we have been you know closely monitoring watching the entire, you know bouncing of EMIs. And. And that’s the reason we have reduced our LTV to almost 8 to 10% which we were doing till 31st of December 2024. So in two wheeler you know controlling the LTV that is the biggest weapon to control your credit loss. So that’s we are clearly you know able to manage. And we have you know some of the states which we have just started just in last two and a half years which is up MP and Chhattisgarh there is a huge scope of expansion with you know, restriction on the credit parameters.
So this as far as stress asset is concerned or on a, you know, NPA side it is concerned, it is well taken. And this story which we have, the way we have performed in the past that will continue for the future. As far as your second question is concerned that you know 27 we will reach around 100 crore. Yes. Because see the way we are growing from 23 to 24, 24 to 25 and now every year 30, 35% we are talking about the growth. But the eventual impact in the pack will be more because we are leveraging our infrastructure cost.
We are leveraging our senior employees who have been joining last one and a half, two years. And then the moment they will reach at one level of AUM that cost will be leveraged. So reaching profitability of 100 by 85 to 100 by 27 should not be an issue.
Unidentified Participant
Got it sir. Thank you so much.
operator
Thank you. Ladies and gentlemen. If you have any question please press star and one on your telephone keypad. The next question comes from Sudarshan Nachimotu from Prostate. Please go ahead.
Unidentified Participant
Hello sir. Thank you for the opportunity. My question is on the asset quality trend. I believe during our last call we mentioned we might be providing stage one and two assets going from now. So if possible from next presentation those details included would be helpful. And for this can you just comment on what is the current numbers of stage one and stage two.
Jay Khushal Mota
Yes, hello.
Jay Khushal Mota
First of all though every that day also if you, you know, just see we have told that every half yearly. That means on September result with the presentation only we are going to give you stage one and stage two numbers. But for your knowledge what is the you know number for the June that can be. You know we can really share with our higher agencies and we’ll definitely share this number with the valorum.
Unidentified Participant
Right. Thank you, that would be helpful. And on the yield trend you did mention from January of reduced fee and your customer quality has gone up. So taking the full year into account, what would be the closing NIMS for the year.
Jay Khushal Mota
So my name will remain what has been shown around 12.43. It will remain almost similar to that only maybe you know, because the way we reduce for the on A LTV ground. At the same time you know we have charted the small business loan that is also little bit growing and that we are lending almost at 22 to 24 IRR. So that will as a mix of everything this will support.
Unidentified Participant
And regarding branch vintage you did mention your operating leverage will pay out. So if you can just you know sort of give us a number wherein what is your AEM of branch which is two years older and AMSOF branch which is six months older. Is there any metric you guys are tracking that would be helpful?
Jay Khushal Mota
Yeah. So out of 1400 crore almost you know the branches which are in Maharashtra, Gujarat and Rajasthan they all are almost four year plus there our presence is there more than four years. So this is all a matured branches and the AUM totaling to Maharashtra, Gujarat and Rajasthan out of this 1400 is around 1150 crore rupees.
Unidentified Participant
Okay and regarding customer backup in terms of OE is there any possibility of giving us how much is from your TVS and how much is from Hero?
Jay Khushal Mota
Yeah so we are actively you know lending in the four brands Honda, Hero, TVS and Suzuki. Our Hero is around 35%, Honda is around 28%, TBS is around 18% and the balance is Suzuki which is 10 to 12%.
Unidentified Participant
And is it safe to assume a chunk of these loans would be scooter loans?
Jay Khushal Mota
Scooter and motorcycle you are talking.
Unidentified Participant
Yeah. So is it majority of scooters or is it scooter?
Jay Khushal Mota
60 to 65% is scooter and balance is motivated.
Jay Khushal Mota
And can you please confirm if your co lending arrangement is still going on?
Jay Khushal Mota
So this is now you know from the AS we have a very better you know capital adequacy ratio and leverage we have available. So now we from the first May we have stopped disbursing new disbursement from Mudu capital arrangements only whatever we have done in past that we are serving.
Unidentified Participant
Right. And so the AEM which you mentioned how much of it is on your book and what is the matur or other quality.
Jay Khushal Mota
Yeah.
Manish Kiritkumar Shah
So out of 1415 crore 12.801280 crore is on book and with Muthoot it’s somewhere around 130 crore and just balance 30 crore is from DA DA transaction.
Unidentified Participant
Okay. And on the cost of borrowing friends. So sequentially we have seen an increase and you had mentioned this best change through your PTC transaction not happening in this quarter but however we see that There is an NCD issuance in Q1 which was at 11 11.3% coupons. So can you just confirm what is the bank borrowing cost which is your NCD cost.
Manish Kiritkumar Shah
So bank borrowing is right now below 11%.
Unidentified Participant
Okay. And is there any particular reason we opted for NCD rather than getting into banks? Because NCD is fixed for two years and given the four year and possibility of it coming in another.
Manish Kiritkumar Shah
No. So NCD you know it is, there are two, three things. One is bullet payment secondly it is, you know, you know through NCD because now from last 3 of the our issuance we are giving retail NCD that is 10,000. So we want more and more people to remain in touch with Manba and you know now almost there are 8,000 NCD holders are there who are watching closely MANBA Finance along with my almost 20,000 shareholders. So this is the whole idea of issuing you know more NCD. And so later maybe six months, one year down we would like to come with the NCD debt IPO also.
So that in a way what we have observed that reducing rate from bank it is always depend upon the you know, repo and all. But as far as NCD is concerned it is a mix of your performance as well as the repo reduction. So that’s the reason we are more focusing nowadays on the end.
Unidentified Participant
50 bipolar call it on to you by the.
Unidentified Participant
Banks.
Manish Kiritkumar Shah
Speak little loudly. Yeah please.
Unidentified Participant
My question is the reason 50bps does the bank have passed it to you?
Jay Khushal Mota
No, no it will be passed now onwards because they have just reported it’s been reduced in on the 5th of of June so they will be passing on whatever reduction is there it will be in coming quarters.
Unidentified Participant
Thank you very much. That’s it from my end I’ll join back again.
operator
Thank you Ladies and gentlemen if you have any questions please press start and one on your telephone keypad. The next question comes from Jahan from Chanetra Asset Management.
operator
Please go ahead.
Mar Jahan
Good afternoon and thank you for the opportunity. I’m Arvin.
Jay Khushal Mota
Yeah
Mar Jahan
so sir, most of my questions have been answered but just one question I have which is currently your borrowing list include banks, NBC, NCDs, given your strong capital position, growth plans, are you exploring any new funding avenues like ECBs or bonds or any alternative funding sources.
Jay Khushal Mota
So see as a policy we keep exploring new funds and you know, new banks, new avenues. So if you see three years before we were doing only CC term loans then we started ptc then we started ta direct assignment then we started co landing. Now a lot of aggressive in the ncd. At the same time we already discussing one or two aggregator who are very, you know, resourceful in ECB transactions. But it is difficult to, you know, say when and where it is going to be clicked. But yes, we are exploring.
Mar Jahan
Right, Right. Understood. That’s it. From my side all my questions have been answered.
operator
Thank you. Thank you ladies and gentlemen. If you have any question please press star and one on your telephone keypad. Next question comes from Mitun Shah and individual investors.
operator
Please go ahead.
Mitul Shah
Yeah, good afternoon sir and thank you for my question. First question is on industry growth. As we are building 35% type of a growth in business. What is the expectation for two wheeler industry growth over next two years? We are building in our assessment.
Jay Khushal Mota
Yeah. So two wheeler this year it seems around 10 to 12%. And as discussing with a lot of OEMs their prediction for the next year also in the same range versus why we are how we will be able to achieve 30 to 35% growth. Because there are a lot of newly operated states in our book which is up MP and Chhattisgarh and lot of geographies it is untouched so far. So for us you know reaching out to 35% growth AUM should not be a problem. At the same time we have introduced now couple of products also.
Now the company is not only dependent on the two wheeler. Now we are also in the EV financing, three wheeler used car, small business loan and top up. So it’s a book your products now and reaching, you know 30 to 35% growth should not be a challenge for company.
Mitul Shah
This 10 12% growth you are assuming for vehicle numbers or in terms of revenue or prices of the.
Jay Khushal Mota
No. So this is what I have told you is about the vehicle numbers. But effectively it will give us a growth of almost 14 to 15% because every year there is a price increment of 4 to 5% in the vehicle cost.
Mitul Shah
Okay. In any case if the situation may be slightly challenging because of all this global turmoil and all you impact on Indian economy in case industry grows by 5 6% still we’ll be able to do 25 30% growth because of the expansion into new geographies.
Jay Khushal Mota
Yes. So this is how we are. We are measuring quarter on quarter the moment you know we have understood that, you know that in the this quarter also we see that the Honda and Hero both have degrown. Okay. So we immediately taken a step and added eight more location in the UP and that will be effective from you know 15th of August operationally and I think that will cover up the gaps which has been you know happening in the industry.
Mitul Shah
The second question on replacement side or like A research as we have seen across automobile segments passenger vehicle, two wheelers, three wheelers in last four, five years there has been a very strong growth on the OEM side. So generally we observe that in subsequent two, three years there is a higher growth for the replacement as around four to five years is the replacement cycle for two wheelers or even in case of passenger vehicle six, seven years. So what is our target for this part of the financing? And where do you see an overall five, two, three years down the line? What is the strategy we are doing to increase the dependence rather than only on the two years?
Jay Khushal Mota
Yeah, so we are talking about the other products, right?
Manish Kiritkumar Shah
Other than OEM sales as you initially highlighted the second end passenger vehicle financing.
Jay Khushal Mota
And all so used to wheeler also we have been, you know, very aggressive. We are very active in this. And same with the used car also because the moment we started and we are getting a very good response in the NCD at 11%. So now we are in a position to lend at 17 ir. 16 to 17 irr with the used car which was previously not possible for the company for the cost of borrowing. So that is also increasing used two wheeler. There is a lot of professional and organized players have started opening up the showrooms and branches in the youth two wheeler and it is becoming little mature product.
So now on that side also company is focusing as I mentioned in my opening remarks on also that we have started business correspondence partners already three partners have started disbursement in this quarter and in the coming quarter four more are joining. So that also we have taken as a backup plan to reach our AUM targets.
Mitul Shah
Okay, and last question on your strategic profitability target of about 85 to 100 crore in next two years or maybe in three years. So can you give more detail in terms of this 30 35% growth in terms of how much would be the industry underlying growth as you highlighted about 10 12%. And how much would be from the network expansion? How much can be from the market share gain or any other segment growth related indication to reach this 8,500 crore target including 35% top line growth and bottom line growth even higher than that.
Jay Khushal Mota
Yes. So I will give you a couple of, you know, reply to this. One is, you know there is a natural growth where we are already a mature. We are already matured. For example we are presence in our four to five years. So almost all the geography already explored. So there our growth will restrict it to 10 to 12% only. It will be always in the parallel with how industry is Growing. But at the same time there are three states where you know our reach out is not even. We have not reached even 20% of the market.
So that every year we will keep on adding more locations. As far as market share is concerned in the area where we perform more than four years historically our market share range is between 14 to 18%. And all these three new areas where our market share is only 3 to 4%. So there is a huge potential availability is there. So all this data which clearly shows that till 2829 only with this if we don’t agree expand any more state still we will be able to reach out to 30 to 35% as far as vehicle portfolio is concerned.
Small business loan. We started the journey before 15 months only with Mumbai as a branch. Then it was a good performance. We started with Nasik Pune, now Ahmedabad and now in the October we are starting from Jaipur also. So that product is also gradually growing. Of course you know the scenario for Tan secret is little tight. So we are going very, very conservative and very precautionary approaches. We have, you know applied. So still there is a huge potential in that product also. So reaching out 30 to 35% is not a challenge. And now as I told you because of this, this is a big element to reach out 85 to 100 crore profitability.
At the same time it will leverage my present infrastructure. It will leverage my all senior professionals who have been joined. For example UP we have taken a very senior person of the industry with 20 years of experience. Now with a zero, you know development their cost was huge. Now today almost every month on month up is disbursing 6 to 7 crore rupees. So gradually in a year, in a year, two years his cost will be leveraged. So putting all these parameters and what we are assuming that you know to pass on the customer is a 50% of what we are getting.
What we are going to get benefit from a reduction in our cost. Fourthly our we are also in a process of, you know to rating agencies where my appraisal is there in the month of August. And we are very, you know positive on getting a. So that can also will be a very, very helpful by reduction further 50 points to 1% rate of interest. So put all to put together reaching our target numbers will not be, you know, tough.
Mitul Shah
Thanks a lot and all the best.
Jay Khushal Mota
Yeah.
Jay Khushal Mota
Thank you.
operator
Thank you. We have a follow up question from Sudhursan Nachimutu from Prosperity Wealth Management.
Sudharsan Nachimuthu
Can you please comment more on your small business loans? What kind of Customers you are looking at what will be the end use of sourcing and collections for him.
Jay Khushal Mota
Yeah. So first of all we have an entire, you know, relationship manager team who does a cold call, who visits the shops and all and they discuss with the potential customers and borrowers and then they collect the data point. We are not sourcing a single business from any of the dsa. We have our own team. Mostly these are the small shopkeepers, traders who are mainly into, you know, shop or a mobile shop or like that who and their presence in the business should be minimum of three to five years. There is a. We also see that there is already line given by three to four other lenders.
We also earmarked that, you know, if one of this lender is there then there is a more, you know, probability of getting sanctioned this loan. So these are the few parameters, a completely digital process. We check the entire thing. 6 months complete bank statement, average balance. Then you know, what is this cash flow? What is the balance cash flow remaining for the repayment of the emi? So these are the very, very robust system we are utilizing. And we are not in absolutely any kind of hurry. And gradually we are, you know performing after 18 months with a disbursement of almost 75 crore rupees.
Our NPA stands only 2%.
Sudharsan Nachimuthu
And what would be the outstanding AEM for SBA?
Jay Khushal Mota
60 crore.
Sudharsan Nachimuthu
And you did mention you would be looking at other players exposure. So is there any possibility of BT in this segment?
Jay Khushal Mota
Pardon?
Sudharsan Nachimuthu
Is there any possibility of business transfer from other players to you?
Jay Khushal Mota
No, no. So we are just seeing doing a business correspondence with some of the player. But that we are doing only in the vehicle loads.
Sudharsan Nachimuthu
And so you are speaking for your 30 to 35% ADM and 12 and a half percent guidance for the year. Right.
Jay Khushal Mota
Team size you are talking.
Sudharsan Nachimuthu
No, the guidance of 30 to 35%. You are sticking to it. And LIM would be around 12 and a half percent.
Jay Khushal Mota
Yeah, yeah.
Sudharsan Nachimuthu
Coming to the OPEC around 5 and a half percent to the AEM. So what would be the trajectory in which it will be going for the year and what is the steady state OPEX to AEM number that one can.
Jay Khushal Mota
Yeah. Opex will definitely will become better and better the way we will, you know, be able to get more and more business from the last in a couple of years joint states such as up, MP and Chhattisgarh. Because you know there the OPEX are today it is in the range of 8 to 9% because of the size of the EU. This which is keeps on reducing Every month on month. So that will be slightly better situation in the OPEX incoming times.
Sudharsan Nachimuthu
So if you can give us a number of your OPEX on your Maharashtra forward numbers.
Jay Khushal Mota
No, we would. I would like to restrict in such a detail. Okay.
Sudharsan Nachimuthu
Not the forward looking statement. I’m asking what would be the OPEX for your mature branches and their agent. So you didn’t mention your Maharashtra, Gujarat and Rajasthan talking about today.
Jay Khushal Mota
You are talking about today’s scenario, right?
Sudharsan Nachimuthu
Yeah.
Jay Khushal Mota
Okay. So today’s scenario, the branches which is already covered four years of operations. Their opex is around 4%. And the branches which are in the below, you know, three years. Their opex is around 7.7and a half percent.
Sudharsan Nachimuthu
That’s it from my end.
operator
Thank you. Ladies and gentlemen, if you have any question please press star and one on a telephone keypad. Ladies and gentlemen, if you have any question please press star and one on your telephone question comes from Maitreya Capital. Please go ahead.
Unidentified Participant
Yeah, hello.
Jay Khushal Mota
Yeah.
Unidentified Participant
Hello.
Unidentified Participant
Just one clarification. Since a previous participant asked that will we reach 100 crore back in FY27. So is that understanding correct?
Jay Khushal Mota
Yeah. So we have not about 100 crore. I told about the. In the range of 85 to 100 crore rupees. So that. Because we are, you know expecting a 30 to 35% growth year on year. Which will support my pack. Secondly, we are leveraging our OPEX by you know, utilizing all our senior professionals. Thirdly, we are expecting almost one 1.5% reduction in the cost of borrowing. So overall impact will come to that level. And we will. We are pretty sure that we will reach these numbers.
Unidentified Participant
And our small business finance currently has an income of 60. How do we plan on increasing the price in the next two or three years?
Jay Khushal Mota
Yeah. So it’s a very good product. Performing well so far in 18 months journey. Almost as per 75 crore rupees. AUM stands for 60 crore with NP of 2%. But as I told you that company for next two to three years want to remain unsecured business in below 10%. So we will not go very, very aggressively for this product. But yes, very strongly and on a selective area. We’ll keep on starting and leveraging our branch for the same product.
Unidentified Participant
Okay. Thank you.
operator
Thank you. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. Ladies and gentlemen, if you have any question please press star and one on your telephone keypad. There are no further questions. Now I hand over the floor to Mr. Manisha of closing comments.
Manish Kiritkumar Shah
Yeah. Thanks. So thank you all for participating in this Earning Con call. I hope we have been able to answer your question satisfactory. If you have any further question or would like to know more about the company, please reach out to our IR managers at Velorum Advisors and I think they will come back to us. And we would like to give more data and more clarification on your doubts or any questions. We once again thanks Ventura Security for hosting this Earning call. And thank you. Thank you very much.
operator
Thank you, sir. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. You may disconnect your lines now. Thank you and have a good day.