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Informist, Tuesday, Aug. 12, 2025 

MUMBAI – Aavas Financiers Ltd. is expected to report a marginal sequential decline in its net profit for the June quarter, driven by a slight deterioration in asset quality, flat credit costs, and muted disbursement growth, according to brokerages tracking the company. Aavas is also expected to lag behind peers in terms of growth in its assets under management.

The company is expected to report a net profit of INR 1.51 billion for the June quarter, down 2% on quarter but up 20% on year, according to the average of estimates from eight brokerage firms. The highest estimate for the company's net profit is INR 1.59 billion by JM Financial Institutional Securities Pvt. Ltd. and the lowest estimate is INR 1.39 billion by Kotak Institutional Equities. 

The company is expected to report a net interest income of INR 2.99 billion for the quarter, up 11% on quarter and 22% on year. The highest estimate for net interest income is INR 3.50 billion from Centrum Broking Ltd. and the lowest estimate is INR 2.80 billion from Kotak Institutional Equities.

Brokerages are divided on their estimates of growth in loan disbursals. Motilal Oswal projects a disbursement growth of 1% year-on-year and Prabhudas Lilladher expects it to rise sequentially by 2.8%. Kotak estimates low double-digit disbursement growth will drive a 2.2% quarter-on-quarter and 17% year-on-year rise in assets under management.

While Kotak expects the company's net interest margin to remain stable on quarter, as the marginal decline in funding costs is likely to be offset by lower incremental yields, Motilal Oswal and Prabhudas Lilladher expect it to improve sequentially. Motilal Oswal expects the net interest margin to expand around 5 basis points on quarter and Prabhudas Lilladher expects it to grow 4.9% on quarter.

Profit after tax will likely decrease 4.6% on quarter and asset quality could worsen by 7 bps on quarter with credit costs remaining flat, Prabhudas Lilladher said. Kotak estimates the operating expenses growth will likely be moderate at 15% on a sequential basis, resulting in a cost-to-average asset under management ratio of 3.1%, compared to 3.5% in 2024-25 (Jan-Mar).

At 1306 IST, shares of the company traded at INR 1,710, down marginally, on the National Stock Exchange. The stock is down 16% since the company announced its March quarter earnings. The company will release its June quarter earnings later in the day.

Of the 13 brokerage reports on the company available with Informist, five have a 'buy' recommendation with an average target price of INR 2,055 and five have a 'hold' rating with an average target price of INR 2,126 and three have a 'sell' recommendation.

Following are the June quarter earnings estimates for Aavas Financiers based on reports from eight brokerages in descending order of the estimate of net profit:

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Reported by Reshma Ravi 

Edited by Tanima Banerjee 

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