01 — At a Glance
Lend Money. Launch AI. Apologize For SBI Delays. Repeat.
- 52-Week High / Low₹41.7 / ₹29.4
- Q3 FY26 Revenue₹240 Cr
- Q3 FY26 PAT₹66.8 Cr
- Q3 FY26 EPS₹0.73
- Annualised EPS (Q3×4)₹2.92
- Book Value₹18.3
- Price to Book1.90x
- Dividend Yield0.29%
- Debt / Equity2.26x
- AUM (FY25)₹5,233 Cr
Auditor’s Opening Note: Paisalo Digital delivered record quarterly PAT of ₹66.8 crore in Q3 FY26 (+29% QoQ, +6% YoY), aided by a 16% YoY AUM growth and consistent cost-of-funds reduction. The stock traded at ₹35.0 on March 20, 2026 — down 1.68% in three months — while delivering annualised earnings of ₹2.92 per share. P/E at 15.0x trades at a discount to the NBFC median of 16.7x. The real story? Management pivoted from “loan company” to “AI company” without asking for a permission slip from shareholders.
02 — Introduction
The NBFC That Forgot It Was An NBFC
Let’s talk about Paisalo Digital. Agra-headquartered. Founded in 1992. Listed on NSE and BSE. Does what NBFCs do: lends money to small businesses, auto rickshaws, and individuals who want to buy electric three-wheelers at 2 AM after consuming uncontrolled amounts of biryani.
For 33 years, Paisalo was a boring NBFC doing boring NBFC things. Small income loans (Umeed, Pragati, Vikas). Mobility financing. Business correspondent arrangement with SBI. AUM growing. Asset quality humming. Collections at 98%+. Par for the course.
Then, somewhere around Q2 FY26, someone at the Paisalo management offices in Agra typed the words “AI-first transformation” into a PowerPoint deck. And everything changed. Suddenly, the company wasn’t just lending. It was “not using AI as an incremental efficiency lever… [but as] a central engine powering growth, risk management, compliance and operating leverage.” The audacity. The courage. The complete reimagining of a ₹5,233 crore AUM NBFC as a machine-learning startup.
Q3 FY26 results landed on December 30, 2025. Record PAT. But also: +49% OpEx growth. Delayed SBI co-lending due to new RBI compliance requirements. And a management team that has fully convinced itself that the future of non-banking finance is 350,000 automated collection calls per day powered by Gen-AI and proprietary “dynamic business rule engines.”
Let’s dig in. Because the numbers are solid. But the narrative is fiction.
Concall Revelation (Feb 2026): “We have already achieved the [NIM] target… AI is not an incremental… but a central engine.” Management spent 60% of the Q3 call discussing AI deployments, 25% discussing AUM, 10% discussing profit, and 5% actually acknowledging that SBI delays might hurt near-term revenue guidance.
03 — Business Model: Lend First, Ask Questions With Machine Learning Later
How To Make ₹5,233 Crore When Your Interest Rates Keep Falling
Paisalo Digital lends money to underbanked borrowers. Simple. They source loan enquiries through branches (402 as of Q3), distribution partners (3,041 as of Q3), and SBI business correspondents (1,429 as of Q3). Total network: 4,872 touchpoints across 22 states serving ~14 million customers.
The portfolio splits roughly as: 89% business loans (small ticket, chunky, concentrated in Delhi-UP), 11% unsecured retail lending (via subsidiary Nupur Finvest). Average lending rate: creeping down. Cost of borrowing: also creeping down. NIM guidance: “we are going to maintain the same for this year” at 6%, even though Q3 actual NIM came in at 6.40%. Welcome to the NBFC squeeze.
Their growth thesis for the next 3 years: double AUM, double income, and double PAT while maintaining “best-in-class” asset quality and keeping ROCE above 13%. This requires ~25% CAGR AUM growth. Management cites historical 20% CAGR (FY20–FY25) and 3-year CAGR of 25%, so “this is achievable.” They’re not wrong. But OpEx is also growing at 49% YoY. And SBI co-lending got delayed by 90 days because the RBI decided to meddle with the compliance playbook.
Business Loans89%Portfolio Composition
Collection Eff.98.8%12M Trailing
Customer Base14M+Added 1.6M in Q3
CAR Ratio38.3%Well Above 15% Req
Co-Lending Model: Paisalo contributes 20% of the loan amount; SBI (or other PSU banks) contributes 80%. This reduces Paisalo’s capital consumption, improves RoA, but makes them operationally dependent on bank approvals and compliance mandates. When the RBI rewrites rules (which happened in Dec 2025), everything pauses for 90 days while lawyers debate mirror accounts and bureau reporting.
💬 Do you think an NBFC becoming a “machine learning company” is peak reinvention or just marketing jargon to justify 49% OpEx growth? Drop your thoughts.
04 — Financials Overview
Q3 FY26: Record PAT. But At What Cost?
Result type: Quarterly Results | Q3 FY26 EPS: ₹0.73 | Annualised EPS (Q3×4): ₹2.92 | Full-year FY25 EPS: ₹2.22
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 240 | 204 | 224 | +17.8% | +7.1% |
| Operating Profit | 93 | 84 | 71 | +10.7% | +31.0% |
| OPM % | 39% | 41% | 32% | -200 bps | +700 bps |
| PAT | 66.8 | 63 | 52 | +6.0% | +29% |
| EPS (₹) | 0.73 | 0.70 | 0.57 | +4.3% | +28% |
The Numbers Story: Revenue +17.8% YoY. PAT +6% YoY. But OpEx grew 49% YoY (management acknowledged this candidly). Operating margins compressed 200 bps YoY despite 31% QoQ jump. The company is spending heavily on: geography expansion, product launches, distribution build, and the aforementioned AI “central engine.” Quarterly annualised EPS (₹2.92) vs. full-year FY25 EPS (₹2.22) suggests management’s 3-year doubling plan is progressing, but execution OpEx is swallowing growth.
05 — Valuation: Fair Value Range
Is Paisalo Cheap Or Just Bad At Opex Control?
