Aavas Financiers (AAVAS) Q2 24/25 earnings summary

Executive summary

• Achieved 20% year-over-year AUM growth to INR 184 billion in Q2 FY25, with net profit up 22% year-over-year to INR 1.48 billion for the quarter and 18% year-over-year to INR 2.74 billion for H1 FY25.

• Disbursements reached INR 25.05 billion in H1 FY25, reflecting 8% year-over-year growth.

• Technology upgrades included rollout of Oracle Flexcube LMS, Salesforce-based lead management, and cloud ERP, improving operational efficiency and time to sanction.

• Expanded branch network to 372 across 14 states/UTs, including entry into Tamil Nadu and omnichannel lead generation.

• Unaudited standalone financial results for the quarter and half year ended September 30, 2024, were approved and reviewed by the Board and auditors.

Financial highlights

• Net profit for Q2 FY25: INR 1.48 billion, up 22% year-over-year; H1 FY25 net profit: INR 2.74 billion, up 18% year-over-year.

• AUM grew 20% year-over-year to INR 184 billion.

• Disbursement in Q2 FY25: INR 12.94 billion; H1 FY25: INR 25.05 billion, up 8% year-over-year.

• NIM as a percentage of total assets in Q2 FY25: 7.78%, with absolute NIM up 8% year-over-year; average NIM at 7.61% for H1 FY25.

• Opex-to-asset ratio improved by 40 bps year-over-year to 3.25% in H1 FY25 and by 29 bps to 3.18% in Q2 FY25.

Outlook and guidance

• Maintains guidance for 20%+ AUM growth for FY25, with H2 expected to be stronger.

• Expects to maintain 1+ DPD below 5%, GNPA below 1.25%, and credit cost below 25 bps.

• Opex-to-asset ratio targeted to improve by 20-30 bps annually, aiming for below 3%.

• Spread guidance for FY25 remains at 4.8%-5%, with efforts to recoup spread as cost of funds stabilizes.

• Focus on technology-driven growth, cost optimization, and operating leverage as part of Aavas 3.0 strategy.