SBFC Finance Reports: SBFC Finance Limited, a leading non-banking financial company (NBFC), has posted robust financial results for Q2 FY26, showcasing significant growth in profitability and continued improvement in asset quality. The company reported a net profit of Rs 1.09 billion, marking a 30% year-on-year increase compared to Rs 840 million in Q2 FY25. Revenue from operations surged 30.87% to Rs 4,107.84 crore, highlighting strong operational performance amid a dynamic financial environment.
The quarter also saw improvements in key asset quality metrics, including a slight decrease in the Gross Non-Performing Asset (GNPA) ratio to 2.77% and a decline in the Net Non-Performing Asset (NNPA) ratio to 1.51%. These figures reflect SBFC Finance’s effective risk management strategies and disciplined lending practices. Additionally, the company maintained a Capital to Risk Assets Ratio (CRAR) of 34.05%, underscoring a solid capital base to support growth and regulatory compliance.
In August 2025, SBFC Finance successfully raised Rs 200 crore through Non-Convertible Debentures (NCDs), which has strengthened its liquidity position and facilitated targeted lending to micro, small, and medium enterprises (MSMEs) as well as gold loans. The company also leveraged employee stock option programs, issuing equity shares to employees to retain top talent and align employee interests with company performance.
Highlights of Q2 FY26 Performance
- Net Profit: Rs 1.09 billion, up 30% YoY from Rs 840 million.
- Revenue from Operations: Rs 4,107.84 crore, a 30.87% increase from Rs 3,138.89 crore in Q2 FY25.
- Earnings Per Share (Basic): Rs 1.00, up 28.21% YoY.
- Asset Quality: GNPA at 2.77% (slightly improved), NNPA at 1.51% (down from 1.57%).
- Capital Adequacy: CRAR of 34.05%, Liquidity Coverage Ratio at 174%.
- NCD Issuance: Rs 200 crore raised in August 2025, with Rs 101.90 crore utilized for on-lending.
- Employee Stock Options: 3,76,240 equity shares issued in the quarter; 71,98,313 shares issued in the half-year.
Financial Performance Analysis
Revenue and Profit Growth
SBFC Finance witnessed substantial growth in operational revenue, reaching Rs 4,107.84 crore in Q2 FY26 from Rs 3,138.89 crore in Q2 FY25. This revenue growth translated into a net profit of Rs 1.09 billion, demonstrating the company’s ability to generate higher earnings through efficient operations and strong lending performance.
| Metric | Q2 FY26 | Q1 FY26 | Q2 FY25 | YoY Change |
|---|---|---|---|---|
| Revenue from Operations (Rs crore) | 4,107.84 | 3,884.36 | 3,138.89 | 30.87% |
| Net Profit (Rs crore) | 1,091.35 | 1,008.92 | 839.84 | 29.95% |
| Earnings Per Share (Basic, Rs) | 1.00 | 0.93 | 0.78 | 28.21% |
Asset Quality Improvement
Asset quality metrics show marginal but meaningful improvements:
- GNPA Ratio: Improved to 2.77% from 2.78% in Q1 FY26.
- NNPA Ratio: Declined to 1.51% from 1.57% in Q1 FY26.
- Provision Coverage Ratio: Increased to 46.17% from 44.38%, indicating enhanced coverage against potential loan defaults.
These metrics underline the company’s continued focus on prudent lending practices and effective recovery measures.
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Capital Adequacy and Liquidity Management
SBFC Finance maintains strong capital and liquidity positions, ensuring resilience in a competitive NBFC sector:
- CRAR: 34.05%, well above regulatory minimum requirements.
- Liquidity Coverage Ratio: 174%, demonstrating robust liquidity management and capacity to meet short-term obligations.
These metrics provide confidence to investors and regulators regarding the company’s financial stability.
NCD Issuance and Utilization
In August 2025, SBFC Finance raised Rs 200 crore through Non-Convertible Debentures (NCDs) to support targeted lending initiatives. By September 30, 2025, Rs 101.90 crore had been deployed for on-lending to secured MSMEs and gold loans. The company has ensured sufficient security cover for all listed NCDs and maintains full regulatory compliance.
Employee Stock Option Programs (ESOPs)
SBFC Finance continues to utilize stock options as a talent retention and engagement tool. During the quarter:
- 3,76,240 equity shares issued under employee stock option policies.
- 71,98,313 shares issued during the half-year to employees.
- 1,05,000 shares transferred from the employee welfare trust to eligible employees during the half-year.
These programs help align employee performance with company objectives and promote long-term growth.
Conclusion
SBFC Finance Limited’s Q2 FY26 results highlight robust financial performance, improved asset quality, and disciplined capital management. The 30% year-on-year growth in net profit demonstrates the company’s ability to maintain operational efficiency and resilience in a challenging financial environment.
Strong revenue growth, coupled with a prudent approach to asset quality, ensures that SBFC Finance is well-positioned to capitalize on emerging lending opportunities in the MSME and gold loan segments.
The company’s healthy CRAR and liquidity ratios reflect its ability to meet regulatory requirements and maintain financial stability, even amid macroeconomic uncertainties.
By leveraging employee stock options and NCD issuances, SBFC Finance strengthens both talent retention and capital availability, supporting sustainable long-term growth.
With its proactive strategies and robust financial management, SBFC Finance is poised for continued success and remains an attractive proposition for investors and stakeholders in the NBFC sector.
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FAQ: SBFC Finance Q2 FY26 Performance
1. What was the net profit of SBFC Finance in Q2 FY26?
SBFC Finance reported a net profit of Rs 1.09 billion in Q2 FY26, a 30% increase year-on-year from Rs 840 million in Q2 FY25. This reflects strong operational efficiency and improved interest income.
2. How has SBFC Finance’s asset quality changed?
The company reported a GNPA ratio of 2.77%, slightly lower than the previous quarter, and an NNPA ratio of 1.51%, down from 1.57%. The provision coverage ratio also improved to 46.17%, indicating better risk management and loan recovery practices.
3. What is the significance of the NCD issuance by SBFC Finance?
SBFC Finance raised Rs 200 crore through Non-Convertible Debentures (NCDs) in August 2025 to support lending to secured MSMEs and gold loans. The utilization of Rs 101.90 crore for on-lending strengthens the company’s growth strategy while maintaining sufficient security for investors.
4. How does SBFC Finance use employee stock options?
The company issues stock options to employees as a talent retention and performance alignment tool. During Q2 FY26, 3,76,240 shares were issued to employees, aligning their interests with the company’s long-term objectives and growth.
5. What do the capital and liquidity ratios indicate about SBFC Finance?
SBFC Finance maintains a CRAR of 34.05% and a Liquidity Coverage Ratio of 174%, reflecting a strong capital base and robust liquidity management. These metrics ensure regulatory compliance and the ability to absorb potential financial shocks while supporting ongoing lending operations.