Mumbai: Fedbank Financial Services Ltd. reported a strong financial performance for the first quarter of FY27, with its net profit rising 52.5 per cent year-on-year to Rs 114 crore, supported by robust growth in total income and continued expansion of its lending business.

The non-banking financial company (NBFC), which focuses exclusively on collateralised lending to the MSME segment, also witnessed investor interest after the earnings announcement, with its shares surging during intraday trade on Wednesday.

Net profit rises to Rs 114 crore

Fedbank Financial Services posted a net profit of Rs 114 crore for the quarter ended June 2026 (Q1FY27), compared with Rs 75 crore in the corresponding quarter of the previous financial year.

The 52.5 per cent year-on-year growth reflects the company’s strong operational performance and sustained expansion in its lending portfolio.

Total income climbs nearly 30%

The company’s total income increased 29.6 per cent year-on-year to Rs 670 crore, up from Rs 517 crore in the year-ago period.

The healthy rise in income was driven by continued growth in lending activity, with the company maintaining momentum in its core business segments.

According to the company, income growth during the quarter outpaced the increase recorded in the corresponding period last year.

Focus remains on collateralised MSME lending

Fedbank Financial Services operates as a specialised lender focused entirely on collateralised loans for micro, small and medium enterprises (MSMEs).

Its customer base includes small businesses such as tailoring units, restaurants, fabrication workshops and other entrepreneurs requiring secured credit.

The company follows a “twin-engine” lending model, with its business primarily driven by gold loans and mortgage loans.

Gold loans dominate loan portfolio

Gold loans continue to account for the largest share of the company’s business.

According to the latest portfolio composition, gold loans constitute 52.9 per cent of the company’s Assets Under Management (AUM).

The remaining portfolio comprises mortgage loans, including medium and small-ticket loans against property (LAP) and housing loans.

The diversified secured lending portfolio helps the company maintain relatively lower credit risk while serving a broad range of MSME customers.

Shares rally after earnings announcement

Fedbank Financial Services shares witnessed strong buying interest after the announcement of its quarterly results.

The stock surged as much as 12.63 per cent during intraday trade to touch Rs 174.40 on Wednesday.

However, it later pared gains and was trading 2.75 per cent lower at Rs 159 nearly two hours later, compared with a marginal 0.03 per cent rise in the NSE Nifty 50.

The stock has delivered a 32.14 per cent return over the past 12 months and is up 5.47 per cent so far this year.

Trading volumes during the session were 1.47 times the stock’s 30-day average, while its Relative Strength Index (RSI) stood at 54.60.

Analysts remain positive on the stock

Market analysts continue to maintain a positive outlook on Fedbank Financial Services.

According to Bloomberg data, six out of seven analysts tracking the company have assigned a ‘Buy’ rating, while one analyst has recommended a ‘Hold’.

The average 12-month consensus target price for the stock stands at Rs 196.67, indicating a potential upside of around 17.2 per cent from current levels.

The company’s strong earnings growth, expanding secured lending business and positive analyst sentiment underscore its continued momentum as it strengthens its position in the MSME lending segment.