SATIN - Satin Creditcare

📊 NSE: SATIN 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 12:55

💰 Financial Performance

Revenue Growth by Segment

Microfinance revenue reached INR 1,358 Cr in H1-FY26, following a full-year FY25 revenue of INR 2,377 Cr. Housing Finance revenue grew from INR 92 Cr in FY24 to INR 115 Cr in FY25 (25% growth) and reached INR 72 Cr in H1-FY26. Total income for the consolidated entity grew 43.7% from INR 1,559 Cr in Mar-23 to INR 2,240 Cr in Mar-24.

Geographic Revenue Split

The company has significantly de-risked its geographic concentration, with the top 4 states now contributing 56% of the portfolio as of Mar-25, down from 81% in Mar-17. The operations span 23 states and union territories across 529 districts and 95,000 villages.

Profitability Margins

Profit After Tax (PAT) saw a massive recovery, rising from INR 5 Cr in Mar-23 to INR 436 Cr in Mar-24. For June-24, PAT stood at INR 105 Cr. Return on Managed Assets (RoMA) improved from 0.05% in Mar-23 to 3.48% in Mar-24, though it moderated to an annualized 2.92% in June-24.

EBITDA Margin

While standard EBITDA is not used for MFIs, the Return on Equity (RoE) averaged 9.1% over the last six years. Net interest margins are supported by a 17.3-month average maturity for assets against a 25.5-month maturity for liabilities as of H1-FY26, creating a positive ALM gap.

Capital Expenditure

Not disclosed in absolute INR Cr for physical assets, but the company is investing heavily in technology, including ISO 27001:2022 certified data security and a centralized data analytics unit to drive digital underwriting.

Credit Rating & Borrowing

Satin Housing Finance holds an A- (Stable) rating from ICRA and Infomerics. The parent company recently allotted Commercial Papers worth INR 25 Cr at a coupon rate of 9.40% p.a. with a 364-day tenure maturing in November 2026.

⚙️ Operational Drivers

Raw Materials

Not applicable as a financial service provider; the primary 'raw material' is cost of funds/capital. Borrowing costs are evidenced by a 9.40% interest rate on recent Commercial Paper issuances.

Import Sources

Not applicable for financial services.

Key Suppliers

Not applicable; however, the company relies on diverse funding sources including banks and capital markets for liquidity, with a recent INR 25 Cr CP issuance listed on BSE.

Capacity Expansion

Current reach includes 1,616 branches as of H1-FY26, up from 1,029 in FY22 (57% increase). Employee count has grown from 10,736 in FY22 to 15,343 in H1-FY26 to support deeper rural penetration.

Raw Material Costs

Not applicable; however, credit costs (provisioning for bad loans) averaged 3.3% over the last six years, which is the lowest among listed peers.

Manufacturing Efficiency

Operational efficiency is measured by AUM per branch, which stood at INR 6.83 Cr in H1-FY26, and AUM per loan officer at INR 0.98 Cr.

Logistics & Distribution

Distribution is managed through a network of 1,616 branches; the company uses a 'three-lines-of-defence' model for compliance and risk control across all locations.

📈 Strategic Growth

Expected Growth Rate

12-15%

Growth Strategy

Growth will be driven by a strategic shift from unsecured to secured lending (Non-MFI portfolio increased from 8% to 15% in 5 years), expansion into the MSME and Affordable Housing sectors, and leveraging technology for digital underwriting and credit discipline. The company is also entering the AIF space to drive scale.

Products & Services

Micro-loans under the Joint Liability Group (JLG) model, MSME loans (secured by collateral), affordable housing finance, and Green finance solutions.

Brand Portfolio

Satin Creditcare Network Limited (SCNL), Satin Finserv Limited (SFL), Satin Housing Finance Limited (SHFL), and Satin Tech.

New Products/Services

Expansion into Green Finance and MSME loans (ticket sizes <= INR 2 lakh) through Satin Finserv, and affordable housing loans with an average ticket size of INR 14.4 Lakh.

Market Expansion

Targeting rural and semi-urban India with a focus on 'excluded households at the bottom of the pyramid'; currently present in 95,000 villages.

Market Share & Ranking

Ranked #3 in the industry in terms of Assets Under Management (AUM).

Strategic Alliances

Securitization transactions with various trusts; Crisil Ratings monitors 7 outstanding securitization transactions with a median collection efficiency of 92.6%.

🌍 External Factors

Industry Trends

The industry is seeing a 'Funding & Liquidity Revival' with the rollout of CGSMFI 2.0 in Q3FY26. Digitalization is a key trend, with the industry expected to grow at a 12-15% CAGR from FY26 as consolidation favors stronger MFIs.

Competitive Landscape

Competes with other large NBFC-MFIs and small finance banks; Satin maintains a competitive edge with the lowest average credit cost (3.3%) among listed peers over six years.

Competitive Moat

Moat is built on a 35-year track record, a massive rural distribution network (1,616 branches), and a committed senior management team with an average tenure of ~10 years. This scale and experience provide a cost advantage in credit assessment.

Macro Economic Sensitivity

Highly sensitive to rural economic health and inflation; however, the company maintains a strong capital adequacy ratio (CRAR) consistently above 25% to buffer against macro shocks.

Consumer Behavior

Shift toward 'borrower repayment discipline' is noted, with newly originated loans showing a PAR 1-60 of only 2.3%.

Geopolitical Risks

Primarily domestic socio-political risks; microfinance is susceptible to local regulatory changes and political interference in loan repayments.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI microfinance guardrails (Guardrails 2.0) effective Jan 2025, which limit the number of lenders per borrower to prevent over-leveraging. The company also adheres to ISO 27001:2022 for data security.

Environmental Compliance

The company has forayed into 'Green Finance' through its subsidiary Satin Finserv to support sustainable MSME initiatives.

Taxation Policy Impact

Not explicitly detailed, but the company reported a PAT of INR 105 Cr on a Total Income of INR 634 Cr for the June-24 quarter.

Legal Contingencies

Not disclosed in available documents; however, the company maintains a 'zero-tolerance for misconduct' policy and a three-lines-of-defence model for compliance.

⚠️ Risk Analysis

Key Uncertainties

Regulatory changes and socio-political issues remain the primary risks, with the potential to disrupt collection efficiency (currently 92.6% median for rated pools).

Geographic Concentration Risk

56% of the portfolio is concentrated in the top 4 states as of Mar-25. Specific securitized pools show higher concentration, with the top 3 states accounting for up to 72.4% of principal.

Third Party Dependencies

Dependency on credit rating agencies (Crisil, ICRA) for maintaining access to capital markets; a sharp downgrade is cited as a major risk factor for liquidity.