OnEMI Technology Stock Analysis: Growth Outlook, AUM Trajectory, And Valuation
Key Takeaways
- AUM is forecast to rise from about Rs 7,100 crore in FY26 to Rs 14,700 crore by FY28, a 44% CAGR.
- PAT is projected to grow from Rs 281.5 crore in FY26 to Rs 629.1 crore by FY28, with Rs 445.8 crore in FY27.
- Borrowing costs are expected to fall to 12.8% by FY28, supported by operating leverage and lower credit costs.
- The stock trades near Rs 316.90 intraday from a Rs 301 reference price, implying roughly 28% upside.
OnEMI Technology Stock Analysis: What Drives Its AUM Growth To Rs 14,700 Crore By FY28?
OnEMI Technology Stock Analysis points to a compelling growth narrative for a digital-first NBFC serving India's mass market. JM Financial pegs AUM rising from about Rs 7,100 crore in FY26 to Rs 14,700 crore by FY28, a 44% CAGR, with PAT climbing from Rs 281.5 crore in FY26 to Rs 629.1 crore in FY28 (445.8 crore in FY27). The stock traded near Rs 316.90 intraday after a Rs 301 reference price, and the shares have risen 1.41% in the last month while the benchmark advanced 5.34%. This backdrop frames OnEMI as a company leveraging a blend of secured lending growth and an expanding borrowings mix to support a scalable loan book.
- AUM is forecast to rise from about Rs 7,100 crore in FY26 to Rs 14,700 crore by FY28, a 44% CAGR.
- PAT is projected to grow from Rs 281.5 crore in FY26 to Rs 629.1 crore by FY28, with Rs 445.8 crore in FY27.
- Borrowing costs are expected to fall to 12.8% by FY28, supported by operating leverage and lower credit costs.
- The stock trades near Rs 316.90 intraday from a Rs 301 reference price, implying roughly 28% upside.
OnEMI is a digital-first lender offering personal loans and loans against property through Kissht, a mobile application. The financial research notes that the company’s AUM could more than double over the 2-year horizon, driven by better-quality borrowers and a more efficient funding cost structure. The rapid expansion is aided by LAP assets rising nearly fivefold year-on-year to Rs 617 crore in the June quarter, lifting LAP’s share to 7.7% of total AUM from 2.5% a year earlier.
In FY27, management guided for AUM growth of more than 40% for the year, and the JM Financial analysis shows the June quarter’s numbers supporting this trajectory. The firm’s AUM stood at Rs 8,000 crore at the end of Q1 FY27, up 61% YoY and 13% sequentially, underscoring a robust demand cycle and the ability to monetize existing borrower relationships. The secured-lending arm operates through 101 branches and is expected to break even around Q3 FY27; the brokerage pegs secured-lending share rising to 11% of AUM by FY28, consistent with better capital efficiency and lower credit risk.
From a cost perspective, the funding headwinds appear to be easing. The average cost of borrowings declined to 14.45% in Q1 FY27 from 15.68% a year earlier, a trend the broker expects to persist into FY28. This helps lower the hurdle rate for new originations and supports margins as the book grows. The cost picture is reinforced by credit costs expected to fall to 6.2% from 8.2% by FY28, while operating expenses as a percentage of average AUM are projected to decline to 15.2% by FY28 from around 19.6% in FY26. The broker also notes a strong post-IPO capital position, with a capital adequacy ratio above 40% in June quarter, providing headroom for further loan-book expansion.
Asset quality is central to the thesis. The gross non-performing assets (NPAs) are estimated to moderate from 2.12% in FY26 to 2.02% in FY28. The quality of new borrowers has improved notably, with about 95.5% of borrowers added during FY26 having credit scores above 700, and the fixed-obligation-to-income ratio for new customers declining to 30.2% from 34.4% in FY25. These indicators suggest the portfolio is shifting toward higher-quality credit, with reduced risk of stress in a growth-phase loan book.
The valuation narrative sits around the Rs 301 reference price. JM Financial valued the stock at about two times its estimated FY28 book value, versus 1.6 times at the reference price. The implied upside is about 28% from the Rs 301 level, and the stock has shown momentum, rising as much as 3.8% to Rs 316.90 intraday. In the most recent session, the stock traded with a value of Rs 10.96 crore and a free-float market capitalization of Rs 1,627.82 crore. This backdrop could support further upside if the company adheres to the projected path of AUM growth, operating leverage, and credit-cost moderation.
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OnEMI Technology Stock Analysis: Evaluating The FY26–FY28 PAT Growth And Return On Equity Outlook
The profitability path underneath the growth thesis hinges on PAT expansion and efficiency gains. JM Financial’s scenario projects PAT rising from Rs 281.5 crore in FY26 to Rs 629.1 crore in FY28, with Rs 445.8 crore in FY27 in between, implying a 49% compounded growth in profit. This expansion sits alongside a steady ROA of about 5.1% and a ROE around 21.8% for FY27 and FY28, suggesting strong earnings leverage as the asset base scales. Even as lending rates reprice to attract higher-quality borrowers, the firm’s operating leverage and cost discipline are expected to sustain a favorable margin profile.
In this framework, the AUM growth path remains the anchor. AUM of Rs 8,000 crore at the end of Q1 FY27 signals the potential for sustained momentum into FY28, provided the balance between risk and price discipline remains intact. The two-times FY28 book value valuation, compared to 1.6 times implied by the Rs 301 reference price, underpins the potential for a re-rating if the growth and risk controls hold up. Investors should watch for signs of trend-confirming data–improvements in risk-adjusted returns and the sustainability of funding costs–as these will determine whether the ROA and ROE targets are realized.
OnEMI Technology Stock Analysis: How Lower Borrowing Costs And Operating Leverage Could Improve Margins
The margin expansion potential rests on three pillars: lower funding costs, improved operating leverage, and disciplined credit costs. The cost of borrowings is expected to fall to 12.8% by FY28 from 14.45% in Q1 FY27, a direct lift to net interest margins if loan growth remains robust. Operating expenses as a percentage of average AUM are projected to decrease from about 19.6% in FY26 to 15.2% by FY28, reflecting fixed-cost absorption and process improvements as the loan book scales. Credit cost is forecast to ease from 8.2% in FY26 to 6.2% by FY28, which would further bolster profitability in a growing portfolio.
These dynamics are magnified by the LAP strategy. LAP assets rose nearly fivefold to Rs 617 crore in the June quarter, lifting their share to 7.7% of total AUM from 2.5% in the prior year. With 101 branches supporting secured lending, break-even is expected around Q3 FY27, and the firm’s share of AUM for secured lending could reach 11% by FY28. The net effect is a credible path to higher ROA and a compressed risk profile, provided asset quality does not deteriorate.
OnEMI Technology Stock Analysis: The LAP Expansion And The Quality Of New Borrowers
Asset quality improves as the loan mix shifts toward higher-credit borrowers. FY26 saw 95.5% of borrowers with credit scores above 700, reflecting prudent credit selection in a rising market. The fixed-obligation-to-income ratio for new customers declined to 30.2% from 34.4% in FY25, signaling improved affordability as the portfolio grows. The LAP expansion supports diversification of the loan book and lowers acquisition costs by leveraging existing relationships for cross-selling and better pricing power.
Liquidity metrics also point to a balanced funding story. The average cost of borrowings fell to 14.45% in Q1 FY27 from 15.68% a year earlier, and the internal expectations are for continued improvement, aided by a higher-quality borrower mix and a more efficient operating framework. While the growth trajectory remains favorable, the risk remains tied to macro credit cycles and competitive intensity in the NBFC space. Investors should monitor the evolution of credit costs and the pace of AUM expansion to gauge risk-adjusted returns.
OnEMI Technology Stock Analysis: Is The Current Valuation Justified By OnEMI's Growth Prospects And Credit Quality?
The assessment of OnEMI’s valuation rests on both the growth story and the balance sheet’s resilience. The Rs 301 reference price anchors a base-case scenario, while a price target pegged by a broker at two times the FY28 book value implies roughly 28% upside from the Rs 301 level. The intraday high of Rs 316.90 demonstrates that the market has already started pricing in upside if growth translates into higher earnings. Liquidity remains decent with Rs 10.96 crore traded and a free-float market cap of Rs 1,627.82 crore. This backdrop could support further upside if the company adheres to the projected path of AUM growth, operating leverage, and credit-cost moderation.
Nevertheless, valuations should be weighed against execution risk. The business remains exposed to macro policy shifts and competitive pressure, especially in a space where digital-first lenders must differentiate via underwriting quality and customer experience. The synergy between growth, margin expansion, and risk controls will be the decisive factor. Investors may wish to consider stepwise exposure to manage downside risk while monitoring progress on AUM, LAP share, and the pace of cost declines.
Frequently Asked Questions
What Are The Projected AUM And PAT Growth For OnEMI Technology From FY26 To FY28?
AUM is expected to grow from about Rs 7,100 crore in FY26 to Rs 14,700 crore by FY28, a 44% CAGR. PAT is projected to rise from Rs 281.5 crore in FY26 to Rs 629.1 crore in FY28, with Rs 445.8 crore in FY27.
How Do Return On Equity And Return On Assets Look In The JM Financial Projection For FY27 And FY28?
The JM Financial projection shows ROA around 5.1% and ROE around 21.8% for FY27 and FY28, reflecting efficient use of capital as the loan book scales.
What Are The Expected Changes In Borrowing Costs And Operating Leverage By FY28?
Borrowing costs are expected to fall to about 12.8% by FY28, with operating expenses as a percentage of average AUM dropping to 15.2% by FY28 from 19.6% in FY26, supported by operating leverage.
What Is The LAP Growth And The Quality Of New Borrowers In OnEMI's Portfolio?
LAP assets rose nearly fivefold to Rs 617 crore in the June quarter, making up 7.7% of total AUM (vs 2.5%). About 95.5% of borrowers added during FY26 had credit scores above 700, and the fixed-obligation-to-income ratio for new customers fell to 30.2% from 34.4% in FY25.
Is The Rs 301 Reference Price Indicating Upside For OnEMI Technology Stock?
Yes. JM Financial values the stock at about two times FY28 book value, versus 1.6 times implied by the Rs 301 reference price. This implies roughly a 28% upside from Rs 301, with intraday highs reaching Rs 316.90 and a traded value around Rs 10.96 crore.
Conclusion
OnEMI Technology Stock Analysis indicates a growth-driven thesis supported by a 44% AUM CAGR to Rs 14,700 crore by FY28 and a PAT trajectory that could reach Rs 629.1 crore by FY28. The near-term upside vs a Rs 301 reference price, plus a target pegged at roughly two times FY28 book value, hints at a favorable risk-reward if asset quality and funding costs stay on path. For retail investors, the key is to watch AUM momentum, LAP expansion, and the efficiency gains that can sustain ROE near 21.8% in FY27–FY28, while managing the risk of credit cycles and competitive pressure.
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Reference :
1 : Economictimes
