IndoStar targets ₹500 cr profit by FY29 as it pivots away from trucks
Management is chasing a 35% disbursement CAGR while lowering its exposure to commercial vehicles. The trade-off is a higher long-term bad loan target.
— 2 earlier stories on Indostar Capital Finance Ltd. →What's new
- Management targets a 35% CAGR in disbursements through FY29.
- Gross NPA target raised to 3.75%-4% from 3%.
- Medium and heavy commercial vehicle exposure dropped to 31% by March 2026.
Why this matters
The company is clearly trying to shed its legacy as a truck lender. While the growth targets are ambitious, the decision to raise the long-term bad loan target suggests management is bracing for higher credit costs in its new, more diversified portfolio.
What we're watching
- Whether the Micro LAP business can maintain its 0.3% delinquency rate at scale.
- The pace of disbursement growth in the coming quarters.
- Actual credit costs as the portfolio shifts toward the new target range.
The full read
IndoStar Capital Finance is betting on a major portfolio shift to drive growth. Management now targets a 35% compound annual growth rate in disbursements, aiming for a net profit of ₹450-₹500 crore by FY29. A central part of this plan is reducing reliance on medium and heavy commercial vehicles, which fell to 31% of the portfolio by March 2026. As the company pivots, it has also lowered its expectations for asset quality. The long-term Stage 3 asset target is now 3.75%-4%, up from the previous 3% goal. While the Micro LAP business shows early promise with a 0.3% delinquency rate across 108 branches, the higher bad loan target indicates that management expects a new, higher baseline for credit costs. The roadmap is clear, but the company is trading lower asset quality targets for a faster growth profile.
Questions answered
- What is the new long-term profit goal for IndoStar?
- Management is targeting a net profit of ₹450-₹500 crore by fiscal year 2029.
- How has the company's lending mix changed?
- The concentration of medium and heavy commercial vehicles in the portfolio has nearly halved to 31% as of March 2026.
- Why did the company raise its NPA target?
- Management adjusted the long-term Stage 3 asset target to 3.75%-4%, up from 3%, to align with industry peers.
- How is the Micro LAP business performing?
- The business has expanded to seven states across 108 branches and currently reports a low delinquency rate of 0.3%.
Story so far
All notes on INDOSTAR →- 28 May 2026 · 1:37 PM IST IndoStar targets ₹500 cr profit by FY29 as it pivots away from trucks
- today IndoStar Capital posts ₹424 cr Q4 loss on heavy provisioning
- 1d ago IndoStar Capital Finance posts annual profit despite Q4 loss