26 October 2018 Under IGAAP, PAT grew 10% YoY to INR2.4b (11% above estimate). The beat was largely led by better-than-expected spreads. Disbursements grew 5% YoY to INR65b. However, excluding gold finance, disbursements were up 16% YoY. The company managed to keep its spread largely stable on a sequential basis at 11%. Cost of funds has remained largely stable on a sequential basis largely due to refinancing of high cost liabilities. SCUF has hiked its lending rates to large MSME customers (ticket size > INR2.5m) which should help maintain yields. Hence, compared to the earlier guidance of 40bp yield decline, it is now revised to stable yields, going forward. The company is able to draw down on existing bank lines but new lines are taking time. It raised INR3b CP at 8.3% earlier this month. Note that CRISIL upgraded SCUF to AA earlier this fiscal. Provisions were largely in line with our estimates at INR2.