Aavas Financiers (AAVAS) Q1 25/26 earnings summary

Executive summary

• Q1 FY2026 marked a pivotal quarter with a major change in control as Aquilo House Pte. Ltd. acquired 48.96% of equity shares, becoming the new promoter and signaling a new phase of growth and innovation in affordable housing finance.

• Assets under management reached ₹207.4 bn as of June 2025, with 99.5% retail loans and 84% of loans under ₹1.5 mn ticket size.

• PAT for Q1FY26 was ₹1,392 mn, up 10% year-over-year, with 397 branches across 14 states/UTs.

• 60% of the loan book is self-employed customers, and 67% of AUM is housing loans.

• AA/Stable long-term ratings and a diversified shareholding base support financial stability.

Financial highlights

• Net profit for Q1 FY2026 grew 10% YoY to ₹1,392 mn, driven by 16% YoY growth in net interest income and improved spreads.

• AUM reached ₹207.4 bn, up 16% YoY; Q1 disbursements were ₹11.5 bn, with a 5% decline due to a one-time change in recognition.

• Net interest margin expanded by 17 bps YoY to 7.48%; spread improved to 5.11%.

• Operating expenses rose 19.8% YoY; cost-to-income ratio at 45.2%, opex-to-asset ratio at 3.01%.

• Basic EPS for Q1FY26 was ₹17.59, up from ₹15.93 YoY.

Outlook and guidance

• Full-year AUM growth expected in the range of 18%-20%, with normalization of disbursements anticipated from Q2 onward.

• Management focuses on technology-led growth, operating leverage, and expanding in tier 3+ geographies.

• Credit cost guidance maintained below 25 bps on a sustainable basis.

• Pristine asset quality and robust capital base position the company for sustainable growth.

• No material deviation in the use of proceeds from NCDs and commercial paper; all funds used as per stated objectives.