| Strong Revenue Growth and Diversified Income Streams
RBA Finance Private Limited has demonstrated robust revenue expansion, with total income rising from Rs.24.46 crore in FY24 to Rs.34.12 crore in FY25, supported by both net interest income and fee-based revenues. The company’s ability to scale portfolio management fees alongside lending income highlights a diversified business model that reduces dependence on a single source of earnings. This balanced revenue mix not only strengthens resilience against market cycles but also underscores the firm’s capability to capture value across lending and advisory activities. Additionally, Mr. Shyam Sunder Agarwal, Director of RBA Finance Private Limited., brings with him over three decades of distinguished experience in the finance sector. His extensive expertise, coupled with a steadfast commitment to leveraging technology, makes him an invaluable leader in driving the organization’s growth and long-term success.
Improving Asset Quality and Collection Efficiency
The company’s asset quality profile has shown consistent improvement, with GNPA reducing from 3.24% in FY24 to 2.62% in FY25 and further stabilizing at 2.60% in H1 FY26. NNPA followed a similar trajectory, reflecting effective provisioning and proactive write-offs. Collection efficiency has remained strong at 93–94%, while the proportion of on-time portfolio improved to nearly 90%. These metrics highlight disciplined credit underwriting, robust recovery mechanisms, and a strong focus on maintaining portfolio health even as the lending book expanded significantly.
Capital Adequacy and Strategic On-Book Expansion
RBA Finance Private Limited has successfully executed a strategic pivot toward on-book lending, with on-book AUM rising from Rs.129.19 crore in FY24 to Rs.237.71 crore in FY25 and further to Rs.245.83 crore in H1 FY26. This transition has enhanced control over asset quality and revenue capture, while net worth has steadily grown to Rs.55.01 crore, supporting capital buffers. Despite higher gearing, the company has maintained CAR above regulatory thresholds, reflecting prudent capital management. The combination of strong capitalization, growing net worth, and deliberate portfolio rebalancing positions RBA Finance Private Limited favorably for sustainable growth in the coming periods.
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| Elevated Leverage and Tightening Capital Buffers
The company’s gearing rose sharply from 2.17x in FY24 to 3.84x in FY25, reflecting aggressive on-book expansion funded largely through borrowings. Although net worth has grown steadily, capital adequacy ratios compressed from 30.03% in FY24 to 20.25% in FY25, only marginally recovering to 21.87% in H1 FY26. This tightening capital cushion limits flexibility for further rapid growth and underscores the need for calibrated leverage or fresh equity infusion to sustain expansion without straining solvency metrics.
Margin Compression and Operating Cost Intensity
Despite stable borrowing costs, net interest margins declined from 20.92% in FY24 to 18.62% in FY25, highlighting pressure from competitive pricing and portfolio mix changes. Operating expenses also remain high, with cost-to-income ratios hovering around 77–80%, indicating limited efficiency gains at scale. While FY25 showed some improvement, H1 FY26 saw opex intensity rise again, suggesting that productivity enhancements and tighter cost controls are necessary to preserve profitability as the business grows.
Credit Costs and Mid-Bucket Stress
Although headline GNPA and NNPA ratios improved, the company continues to record elevated write-offs, with Rs.7.13 crore in FY25 and Rs.4.93 crore in H1 FY26. Mid-bucket delinquency (31–60 days past due) rose in H1 FY26, pointing to potential forward-flow risk if cures are not sustained. This, combined with reliance on aggressive portfolio growth, exposes the company to volatility in credit costs. Maintaining strong early warning systems and provisioning discipline will be critical to ensure asset quality stability as the loan book matures.
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