Aavas Financiers (AAVAS) Q2 25/26 earnings summary

Executive summary

• CARE Ratings revised long-term outlook from stable to positive, signaling potential for AA+ upgrade and improved funding costs.

• AUM reached ₹213.6 bn as of H1FY26, with 99.5% retail loans and 27.1 bn in disbursements; operations normalized post new disbursement recognition, with strong 36% Q-o-Q and 21% Y-o-Y disbursement growth in Q2.

• Net profit after tax for H1FY26 was ₹3,036 mn, with ROA of 3.19% and ROE of 13.43%.

• The company operates 405 branches across 14 states/UTs, serving over 375,000 families, with 80%+ branches in Tier 3+ towns and recent expansion in Tamil Nadu.

• Asset quality remains robust, with vigilant monitoring of specific geographies and customer segments; GNPA ratio is 1.24%.

Financial highlights

• AUM grew 16% Y-o-Y to ₹213.6 bn in Q2FY26; full-year AUM growth expected at 18%.

• Q2 FY26 net profit up 11% Y-o-Y to ₹1,644 mn; NII up 18% Y-o-Y; NIM at 8.04%.

• Disbursements in Q2 FY26 were ₹15,599 mn, up 36% sequentially and 21% Y-o-Y.

• 5-year CAGR for AUM and PAT stands at 21% and 18%, respectively.

• Total income for Q2 FY26 was ₹66,745.13 lakh, up from ₹58,045.46 lakh in Q2 FY25.

Outlook and guidance

• Anticipates sustaining current growth momentum into H2, a traditionally strong period, with a focus on contiguous branch expansion and digital transformation.

• Full-year AUM growth guidance at 18%; long-term aspiration to reach ₹550 bn AUM by FY2030, implying 20%+ annual growth.

• OPEX to asset ratio targeted below 3% over the medium term as scale and productivity improve.

• Continued investment in technology and analytics to enhance operational efficiency and customer experience.

• The company continues to focus on housing finance within India, with no separate reportable segments.