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Informist, Tuesday, Jul. 21, 2026

By Vaishali Tyagi and Pratiksha

The management of Aavas Financiers Ltd., a non-banking financial company, during a post-earnings call with analysts on Tuesday said it was committed to achieve a 22-23% growth in disbursements and 17-18% growth in assets under management over the next nine months. 

As. of Jun. 30, the company disbursed loans worth INR 16.14 billion, up 41% on year, while the company's assets under management at the end of June quarter increased to INR 239.31 billion, up over 15% on year and marginally up from INR 235 at the end of March.

The management pegged the company's medium term AUM growth at 20%. The momentum seen during the June quarter strengthened the company's confidence in the strategic initiatives underway and provides a solid base for the rest of the year, the managment said.  "Encouragingly, our monthly AUM addition improved by nearly 50% on year during the quarter helping us achieve targets in three months what earlier took close to five months," the management said. "This reflects the positive impact of our efforts on customer acquisition, productivity and execution. It's a long journey ahead, and these improvements give us confidence that Aavas is well positioned to accelerate growth and deliver sustainable 20% growth over the medium term."

"This performance was driven by a strong pickup in volumes, meaningful improvement in resource productivity, and healthy 38% on-year growth in the home loan segment," the company said in investor presentation. "As we move ahead, our priorities are accelerating customer acquisition, improving productivity, driving higher revenue per resource, enhancing branch profitability, and increasing operating leverage."

The non-banking financial company declared its financial results for the June quarter post market hours. The company's net profit rose to INR 1.71 billion, up 23% on year, from INR 1.39 billion, lower than Street estimate of INR 1.77 billion. Tuesday, the company's shares ended at INR 1,521.70 on the National Stock Exchange, up nearly 2% from Monday.

On expansion plans, the company's management said it would continue to invest in branch expansion to further deepen and diversify its presence. "At the same time, our focus firmly remains on ensuring faster branch-level break-evens and closely monitoring performance of newly opened branches to drive better productivity and profitability," Manu Singh, managing director and chief executive officer, said during the call with analysts. "During the quarter, we expanded our branch network to 440 across 15 states." 

The management expects mild pressure on spreads, which are expected to fall marginally below 5%. "Yes, there is pressure on spreads. As I look for the complete year, I do believe that spread compression from the existing point will go down to sub-five," the top official of the company said. The company's margin spread was at 5.06% in the quarter ended June, down from 5.20% reported at the end of March. 

Notwithstanding spread compression, the management expects return on assets and return on equity to remain stable, citing early benefits from operational initiatives in Apr-Jun. "There is scope to optimise cost-to-income ratios, particularly on the income side...our focus is on enhancing productivity and revenue per resource across 440 branches to deliver planned returns despite competitive pressure," it said.

The company is also prioritising market share gains in its core housing finance business. While this may exert some pressure on net interest margins, the management showed optimism in mitigating the impact through cost controls and improved income. Net interest margin of the company was at 7.70% at the end of the June quarter, significantly down from 8.45% reported at the end of the trailing quarter.

The management said it continues to see a healthy trend on both lead and lag indicators, with no stress visible across geographies or customer segments. The company remained cautious and was keeping a tight watch on collections. In early February, the company identified certain segments that could be impacted by the ongoing war and the potential shortfall in rainfall. 

"We are also tracking indicators across industries...for instance, tractor sales have rebounded after a long period," the management said. "Overall, we are monitoring both past trends and developments across the industry. We remain confident of maintaining our credit quality guidance for the year."  End

Edited by Akul Nishant Akhoury

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