SBFC Finance Ltd (NSE: SBFC) reported a 34% year-on-year (YoY) rise in profit after tax for the third quarter ended December 31, 2025, reaching \u20b9118 crore. Total assets under management (AUM) expanded to \u20b910,478 crore, reflecting a 29% YoY increase and a 5.4% sequential growth from the previous quarter. The company\u2019s return on average assets (RoA) stood at 4.67%, supported by a spread of 9.04%.<\/p>\n\n\n\n
The NBFC achieved a 29% year-on-year growth in assets under management, crossing the \u20b910,000 crore milestone in December 2025. Improved operating efficiency and stable asset quality metrics supported bottom-line expansion for the quarter.<\/p>\n\n\n\n
A material milestone for the company in Q3 FY26 was the total AUM crossing the \u20b910,000 crore threshold. This growth was primarily driven by the Secured MSME segment, which saw its AUM rise to \u20b98,497 crore, representing 81% of the total portfolio. The company also expanded its physical footprint to 230 branches across 181 cities in 17 states and 2 Union Territories.<\/p>\n\n\n\n
For the quarter ended December 2025, total income rose 27.8% YoY to \u20b9426 crore. Interest income on loans contributed \u20b9393 crore to this total. Operating efficiency showed improvement as the cost-to-AUM ratio declined to 3.93% from 4.62% in the same period last year.<\/p>\n\n\n\n
Asset quality remained relatively stable, with Gross Non-Performing Assets (NPA) at 2.71%, compared to 2.70% YoY. Net NPA improved to 1.48% from 1.63% in the prior-year quarter. The provision coverage ratio (PCR) increased to 46.21%. On a nine-month (9M FY26) basis, profit after tax reached \u20b9328 crore, up 31% YoY.<\/p>\n\n\n\n
The company\u2019s stated strategy remains focused on the underserved \u20b95 lakh to \u20b930 lakh ticket size for secured MSME loans. Management utilizes a 100% in-house sourcing and collection model to maintain credit standards. SBFC\u2019s technology landscape, including AI-enabled underwriting and digital onboarding, supports this granular growth; currently, 88.6% of the secured MSME AUM is from customers with CIBIL scores above 700.<\/p>\n\n\n\n
SBFC operates within a target MSME financing market estimated at \u20b941 lakh crore, which has historically grown at a CAGR of 24%. The company maintains a diversified borrowing profile with 47.4% from bank rupee loans and 15.9% through co-origination. Its capital position remains robust with a Capital Adequacy Ratio (CRAR) of 31.70% and an AA- (Stable) credit rating.<\/p>\n\n\n\n
While the headline growth is robust, certain metrics suggest caution for potential investors. Stage 2 assets increased significantly to \u20b9318 crore from \u20b9199 crore in the prior-year quarter. Disbursements for the Secured MSME segment were flat year-on-year at \u20b9699 crore and declined 14% on a sequential basis from the previous quarter. Furthermore, credit costs rose to 1.29% of average AUM, up from 0.97% in Q3 FY25. The company also notes that small-scale businesses lack resilience, making the portfolio potentially vulnerable to macroeconomic down-cycles.<\/p>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
SBFC Finance Ltd (NSE: SBFC) reported a 34% year-on-year (YoY) rise in profit after tax for the third quarter ended December 31, 2025, reaching \u20b9118 crore. Total assets under management (AUM) expanded to \u20b910,478 crore, reflecting a 29% YoY increase and a 5.4% sequential growth from the previous quarter. The company\u2019s return on average assets 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