AAVASNSEMay 12, 2026

Aavas Financiers Limited

6,363words
32turns
6analyst exchanges
4executives
Management on call
Manu Singh
Managing Director* and Chief Executive Officer
Ghanshyam Rawat
Chief Financial Officer
Ashutosh Atre
Chief Risk Officer
Rakesh Shinde
Head of Investor Relations
Key numbers — 40 extracted
rs,
ents with very strong focus on risk management, governance and execution discipline. Over the years, Aavas has built a very high-quality franchise, defined by prudent growth, disciplined risk manageme
Rs. 200 billion
the year, we saw a change of promoters, welcoming CVC Capital Partners, our balance sheet crossing Rs. 200 billion and our net worth crossing Rs. 50 billion marks. We have expanded our reach to the southern market
Rs. 50 billion
coming CVC Capital Partners, our balance sheet crossing Rs. 200 billion and our net worth crossing Rs. 50 billion marks. We have expanded our reach to the southern markets, and our lifetime disbursements have cro
Rs.400 billion
s. We have expanded our reach to the southern markets, and our lifetime disbursements have crossed Rs.400 billion mark, enabling 4 lakh customers to have their dream Aavas, which is homeownership. Further, our
4 lakh
to the southern markets, and our lifetime disbursements have crossed Rs.400 billion mark, enabling 4 lakh customers to have their dream Aavas, which is homeownership. Further, our credit rating outlook
Rs. 23.5 billion
gment, which is affordable housing. From a business perspective, Q4 was encouraging. We disbursed Rs. 23.5 billion, 16% higher than same time last year and 36% growth Q-o-Q, which firmly reflects an improving ope
16%
fordable housing. From a business perspective, Q4 was encouraging. We disbursed Rs. 23.5 billion, 16% higher than same time last year and 36% growth Q-o-Q, which firmly reflects an improving operatin
36%
ective, Q4 was encouraging. We disbursed Rs. 23.5 billion, 16% higher than same time last year and 36% growth Q-o-Q, which firmly reflects an improving operating rhythm of the business. Our AUM
Rs. 234.5 billion
reflects an improving operating rhythm of the business. Our AUM at the end of FY26 stood at Rs. 234.5 billion, registering a Y-o-Y growth of 15%, while disbursements for the year grew 11% at Rs. 67.8 billion.
15%
siness. Our AUM at the end of FY26 stood at Rs. 234.5 billion, registering a Y-o-Y growth of 15%, while disbursements for the year grew 11% at Rs. 67.8 billion. More importantly, our credit-firs
11%
ood at Rs. 234.5 billion, registering a Y-o-Y growth of 15%, while disbursements for the year grew 11% at Rs. 67.8 billion. More importantly, our credit-first approach continues to benefit us with best
Rs. 67.8 billion
Rs. 234.5 billion, registering a Y-o-Y growth of 15%, while disbursements for the year grew 11% at Rs. 67.8 billion. More importantly, our credit-first approach continues to benefit us with best-in-class asset qual
Guidance — 20 items
Rakesh Shinde
opening
“This will be followed by a question-and-answer session.”
Manu Singh
opening
“Quickly coming to operations for Aavas for FY26.”
Manu Singh
opening
“At a very macro level, FY26 has seen multiple structural enablers, including policy reforms, continued FDI liberalization and progress on trade agreements.”
Manu Singh
opening
“NIMs improved by 29 bps overall in FY26.”
Manu Singh
opening
“We continue to maintain our guidance on keeping credit costs under check and below 25 bps on a sustainable basis.”
Manu Singh
opening
“During FY26, we also successfully secured commitment of ~Rs.”
Manu Singh
opening
“The proceeds from this financing will be deployed to support affordable housing loans to EWS and LIG categories, promote women ownership, scale green-certified housing and expand our MSME lending in underserved lending franchise.”
Manu Singh
opening
“further strengthening our development-focused regions, A well-diversified liability franchise linked to various benchmarks and competitive price; we were able to deliver 62 bps improvement in overall cost of funds for FY26.”
Manu Singh
opening
“Our spread improved by 31 bps Y-o-Y to 5.20% in FY26.”
Manu Singh
opening
“67.05 billion at a competitive rate of 7.61% for FY26.”
Risks & concerns — 15 flagged
My experience spans across sourcing, credit, operations, collections and a deep exposure to operating in regulated environments with very strong focus on risk management, governance and execution discipline.
— Manu Singh
Over the years, Aavas has built a very high-quality franchise, defined by prudent growth, disciplined risk management and a strong commitment to the communities we serve.
— Manu Singh
As we step into the next phase of our growth journey, our priorities are very clear; to scale the franchise responsibly; enhance operating efficiency; and continue to deliver sustainable risk-adjusted returns.
— Manu Singh
This was supported by improvement in spread, coupled with our continuous focus on risk-adjusted pricing suiting our customer segments.
— Manu Singh
50.5 billion with a capital to risk-weighted assets ratio of 44.6%, significantly above the regulatory requirement.
— Manu Singh
I am pleased to share the key portfolio risk parameters with you.
— Ashutosh Atre
Our disciplined underwriting standards, coupled with proactive risk management framework, have enabled us to stay ahead of emerging macroeconomic challenges.
— Ashutosh Atre
We continue to follow a rigorous credit assessment process; stress tested across multiple economic scenarios and remain selectively calibrated in our exposure to high- risk segments.
— Ashutosh Atre
And going back to my previous answer, I would like to repeat that there is enough headroom to place the product on risk-adjusted pricing.
— Manu Singh
Yes, we are continuously focused on adding branches in states like UP, Gujarat, Tamil Nadu, where we find the perfect balance of potential as well as risk, which we are ready to underwrite.
— Manu Singh
The first is, is RO enabled and understands what source, sources first time right, is assessed based on our risk adjustment assessment.
— Manu Singh
And hence, similarly, when I look at and the team looks at channel management, it does not mean we degrow some channel.
— Manu Singh
So, you also indicated in terms of risk- adjusted pricing to be optimized.
— Manu Singh
As I mentioned, it's a progressive journey that we have the expertise of underwriting risk very well.
— Manu Singh
And hence, our ability to build that muscle on risk- adjusted pricing across 435 branches is a journey which is already on its way.
— Manu Singh
Q&A — 6 exchanges
Q
Congrats on a good set of numbers. Sir, just two questions. One on the medium-term strategy. I do understand you might have spent only 10-15 days, but if you can just broadly guide us, how do you think about the sector's medium-term growth and where does Aavas stand in terms of growth the outlook? And maybe what is your aspirational growth target for FY27 and FY28? That's my first question, sir. Thank you so much for that question. I'll take them separately. I'll take your second question first, which is long-term growth strategy. Our aspiration clearly is to consistently deliver 20%-plus AUM
Manu Singh
improvement in the yield placement of product and cost of borrowing stabilizes at this level. We're very confident to maintain the spreads 5%+. Okay. So, my observation is, with 15 bps PLR cut, yields are down 20 bps, which essentially means that the book yield is converging towards disbursement yield, which is lower as we have been highlighting. So just wanted to understand how your disbursement yields will move ahead, which will ultimately take care of your blended yields. Thank you so much for articulating that clearly. I think that is well established with us. And going back to my previous
Q
So, a couple of questions on the growth side. You articulated aspiration to get towards 20%+. And we are seeing the network expansion. This quarter, again, larger part of the network expansion was in Gujarat, Tamil Nadu and UP, wherein we would have added like, say, 8 to 10-odd branches in each state.
Manu Singh
So, would that be the strategy maybe in terms of expansion? And we have seen almost flat branches in Maharashtra, MP and Rajasthan, maybe 3 branches getting added as such. So, do we see that a larger part of the expansion would be coming to these states in terms of the branches and even in terms of the incremental growth? So that's firstly on geography. And secondly, on the productivity side, maybe what are the initiatives we are taking incrementally just to ensure that productivity and maybe the disbursements per sales officer, that also inches up? So, if you can highlight in terms of what yo
Q
Just one question and maybe just trying to paraphrase what some of my friends earlier in this call have asked. If you look at the last 2 years, we grew below 20%. So, if you could, first, articulate where was the problem? When our peers with large balance sheets were able to grow upwards of 20%, why were we not able to grow? Was it an execution problem? Was it a competition problem? That is the first thing I wanted to understand. You have articulated product placement, geography, so if you could add some nuances around it in terms of channel, are we going to do more of DSA sourcing going forwa
Manu Singh
Sure. I'll take the two questions one by one. The first is about your question about the past. Every human being, including me, becomes wiser in hindsight. So, I would start answering by saying at every point in time, my predecessors and the management team have done their best in those times. Times are different. Variables are different. Looking progressively ahead on growth, my response would go back to the earlier two questions that we are focused on not only looking at sustainable growth, we are also investing continually in geographies like South, Gujarat, UP, where we see potential balan
Q
competitive dynamics in that? Is it largely a function of the other part of the yields declining because of competition being too high? That's one. And the other part to this question is, are you seeing some of the bigger HFCs now trying to enter some of the ticket sizes, ZIP codes that you operate in, primarily also because they are being pushed out from the prime mortgage side, so they're wanting to come into your ZIP code? Any thoughts around that, please? I think Q4, the number which you are referring has an impact of reducing 15 bps PLR, which is effective on 1st of March. So, you can see
Management
Q
I have a few questions. One, see, when I look at your number of loans disbursed data, right, that disbursement value divided by the disbursement ticket size, for full year and even for the last 3 quarters, which is cumulative of Q2, Q3, Q4 because I think you had some problems in Q1, the volumes have not exactly grown. On a full year basis, the total number of loans disbursed are flat. And in home loans, in fact, you've declined on a Y-o-Y basis in terms of volume. What are you doing to improve
Manu Singh
that? Because I see that your employee base has expanded, your branch network has expanded and still the volumes are down. I just want to get some sense of that. Thanks for that observation. It is very clear to us that this is an area of immediate attention for all of us. On which, as we laid down our FY27 plans, we've taken our numbers in April have been, for us, quite effective. There is also a slight change in the sense that realization of an instrument in the customers' banking account is now the order of the day. Some of these have now settled down very well. And hence, we see that progre
Q
My first question is on technology and digital platform that we have developed over the years. So, do you feel that there is further investment required on that front to make it more aligned with the industry requirement and to bring down debt and then also smoothen the overall functioning? Ghanshyam Rawat: No. We have made a good investment in the sales force, as well as the life cycle management, Oracle FLEXCUBE. Then we have best-in-class Oracle ERP system with Fusion. All I think, most of the capitalization has been done. We do not see any further investment in the entire module. Yes, one
Shreepal Doshi
So, nothing major as such on the tech and digital side. The majority of our opex will be towards branch expansion and network expansion broadly, right? Ghanshyam Rawat: Yes. Got it. The second question was pertaining to how you are seeing the ground trends in terms of business momentum, as well as bounce rates, delinquency in the early part of 1Q? And how are we sort of planning or positioning ourselves to face the unfolding situation because of the Middle East war and the impact of inflation going ahead for our customers broadly? We are also keeping very close watch on what is happening on th
Speaking time
Manu Singh
10
Moderator
6
Raghav Garg
5
Ashutosh Atre
3
Shreepal Doshi
3
Rakesh Shinde
1
Renish Bhuva
1
Kunal Shah
1
Abhijit Tibrewal
1
Ghanshyam Rawat
1
Opening remarks
Rakesh Shinde
begin this call with opening remarks from our CEO, Manu Singh; CFO, Ghanshyam Rawat; and CRO, Ashutosh Atre. This will be followed by a question-and-answer session. With that, let me now hand over the call to Manu. Over to you, Manu.
Manu Singh
Good evening, everyone, and thank you so much, Rakesh. Before I delve into the quarterly results, let me tell you that it's an absolute privilege to address you first time as the CEO of Aavas. I'm grateful to the Board and to the entire Aavas family for their trust and confidence. Myself, I bring over 25 years of experience in lending with track records of scaling lending businesses across both geographies and product suites. My experience spans across sourcing, credit, operations, collections and a deep exposure to operating in regulated environments with very strong focus on risk management, governance and execution discipline. Over the years, Aavas has built a very high-quality franchise, defined by prudent growth, disciplined risk management and a strong commitment to the communities we serve. This is evident in our consistently pristine asset quality, strong governance standards, rigorous compliance and best-in-class underwriting capabilities, particularly in the assessed income s
Ashutosh Atre
Thank you, Ghanshyamji. Good evening, everyone. I am pleased to share the key portfolio risk parameters with you. Asset quality and provisioning: Aavas is strongly positioned to continue delivering industry-leading asset quality. Our asset quality remains within the guided range with 1- day past due well below 4% at 3.17% in FY26 versus 3.38% in FY25. And Gross Stage 3 and Net Stage 3 improved to 1.05% and 0.68%, respectively. During the quarter, there was a reduction in absolute value of 1+ DPD and percentage, which improved by 63 bps and gross Stage 3 by 14 bps from December '25. From a geographical perspective, asset quality in our vintage states continued to remain healthy. The average 1+ DPD and GNPA stood well below 4% and 1.25% of AUM. Similarly, in our emerging markets, we are observing healthy credit performance with 1+ DPD and GNPA levels remaining comfortably within 4% and 1% of AUM, respectively. Our total ECL provisioning, including that for COVID-19 impact, as well as Res
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