Financial Performance and Product Mix
Mufin Green Finance delivered a strong financial performance for the quarter ended March 31, 2026, with operating revenue reaching ₹64.67 crore. The net profit for the quarter surged by 207% year-on-year to ₹11.09 crore. This growth is underpinned by a significant change in the product mix.
While the company started as a pioneer in EV and solar financing, those segments now represent 30% of the portfolio. The high-yield medical insurance premium financing segment has quickly scaled to 39% of the AUM, delivering a Return on Assets (ROA) exceeding 8%. This tech-oriented product requires minimal manpower and maintains a negligible NPA of just 0.01%.
Key Highlights from the Call
- Strategic transition from EV/Solar to digital-first products like Insurance Premium Finance and Salary Saathi.
- Reduction in borrowing costs from 13.80% to 12.17% following the upgrade to an A- rating.
- Successful integration with nine insurance companies including HDFC Ergo and Star Health.
- Development of the 'Salary Saathi' product with direct treasury-level EMI deduction for government employees.
- Technological focus allowing for scaling AUM while simultaneously reducing operational headcount.
Management Outlook and Guidance
Looking ahead to FY27, management has provided aggressive guidance, targeting an AUM of ₹2,500 crore. The focus remains on the 'bottom line' rather than just volume growth, with a PAT target of ₹90 crore. Management intends to achieve this by increasing the share of insurance financing to 60% of the total portfolio.
By leveraging technology and reducing the workforce to approximately 300 people, the company expects to significantly improve its ROA. Future expansion plans include scaling 'Salary Saathi' to additional states such as Maharashtra, Chhattisgarh, Meghalaya, and Goa.
Strategic Efficiency Measures
Our target for current financial year is that we will be reducing our manpower size to 300 people by end of 2027. Despite the fact that AUM is increasing, the employee cost is decreasing. This will directly impact our profitability and improve our ROA because of the tech-based products.
What to Watch
- Execution of the Salary Saathi expansion in new state government jurisdictions.
- Sustainability of the low NPA levels in the rapidly growing insurance financing segment.
- Further reduction in borrowing costs as the company targets PSU bank funding at sub-10% rates.
- Impact of the planned 40% reduction in headcount on operational stability and AUM scaling.
