SBFC Finance just pulled a classic NBFC magic trick – Q1 FY26 revenue ₹388 Cr (+30.6% YoY) and PAT ₹101 Cr (+28% YoY). AUM sprinted to ₹7,715 Cr (+33% YoY). NIM is at a fat 10.2%, but Gross NPA inched up to 2.69%. Stock at ₹107 trades at 32x earnings and 3.6x book – because apparently, growth is sexier than risk.
2. Introduction
Born in 2008 and listed only in 2023, SBFC is that hustler kid who went from tuition classes to full-blown ed-tech startup vibes in less than two decades. While most NBFCs struggle to explain to RBI why their books look like Swiss cheese, SBFC pitches itself as the “formal credit gateway” for small businesses in Tier II/III towns who don’t have proper paperwork but still want formal loans.
In a country where MSMEs scream for credit and banks yawn in response, SBFC carved a sweet spot. AUM grew at 46% CAGR since FY19 – faster than your neighborhood chaiwala’s expansion into “franchise model.” Its recipe: secured MSME loans (82% of AUM), gold loans (15%), and a pinch of “other stuff” no one cares about.
IPOed in 2023, raised ₹1,025 Cr, and has since been sprinting with branch expansions, co-lending with ICICI Bank, and selling the India growth story to FIIs. But the question is: with debt at ₹5,264 Cr, NPAs slowly creeping up, and ROE stuck at 11%, is SBFC the next Bajaj Finance-in-the-making or just another NBFC flameout in progress?
3. Business Model – WTF Do They Even Do?
SBFC is not your typical shiny fintech with jazzy apps. It’s old-school NBFC masala:
Secured MSME Loans (₹9.36L avg ticket size): Borrowers are shopkeepers, small traders, and local businesses. SBFC secures against collateral (property/asset). This chunk is 82.5% of AUM.
Gold Loans (₹0.91L avg ticket): The “in case of emergency, break gold chain” product. 14.5% of AUM.
Others: Barely 3% – some unsecured loans to remind investors they can experiment.
Distribution:
192 branches, 155 cities, 16 states + 2 UTs.
Heavy presence in South (40%) and North (33%).
Moat claim: 100% in-house sourcing (no DSAs), which helps keep credit quality sane. Also has an 80:20 co-origination with ICICI Bank – basically, ICICI puts its brand, SBFC does the dirty work.
It’s a decent model – focus on underserved MSMEs, keep ticket sizes manageable, keep NIMs fat, and pretend you’re the next Bajaj Finance until RBI calls.
4. Financials Overview
Q1 FY26 vs Q1 FY25 vs Q4 FY25
Metric
Latest Qtr (Q1 FY26)
YoY Qtr (Q1 FY25)
Prev Qtr (Q4 FY25)
YoY %
QoQ %
Revenue
388
297
361
30.6%
7.5%
EBITDA
265
216
245
22.7%
8.1%
PAT
101
79
94
28.2%
7.4%
EPS (₹)
0.93
0.73
0.87
27.4%
6.9%
Commentary: Growth looks healthy both YoY and QoQ. At least unlike fintechs, SBFC is not burning money on “customer acquisition via cashback.”
