Aye Finance Limited Earnings Summary — Q1 FY2027

• Net profit saw a massive year-on-year surge of 144% to ₹74.50 crore, supported by a healthy capital base post-IPO.
• Total Income reached ₹489.66 crore for the quarter, primarily driven by interest income of ₹452.67 crore.
• Gross Stage III ratio stood at 4.49% while Net Stage III remained controlled at 1.67%, reflecting stable asset quality.
• The Company maintains a strong Capital to Risk-Weighted Assets Ratio (CRAR) of 42.38%, significantly above regulatory requirements.
• A breach was noted in a specific debt covenant related to write-offs due to industry-wide stress in Micro Business and MFI loans, though a waiver was obtained.
• Operating leverage is beginning to manifest as employee benefit expenses were ₹138.64 crore against a total income of nearly ₹490 crore.
• Provision coverage ratio for Stage III assets is robust at 63.80%.
• Company completed full utilization of the IPO fresh issue proceeds (₹672.24 Cr) for augmenting its capital base.

Management is focused on the 'missing middle' of Indian finance, utilizing a cluster-based underwriting model to manage risks in the informal micro-enterprise segment and drive expansion in under-served regions.

Improving

The massive YoY profit jump and successful post-IPO capital deployment indicate strong execution, though qoq profit pressure and sectoral stress in MFI/Micro-business loans warrant monitoring.

The outlook remains positive as the company leverages its strong capital position (42.38% CRAR) to scale AUM, despite external industry-wide headwinds in the micro-lending sector.