Aavas Financiers Reports Strong Q1 FY27 Performance: Net Profit Surges 23% to INR 171 Crore

Aavas Financiers Limited has officially announced its unaudited financial results for the quarter ended June 30, 2026 (Q1 FY27). The housing finance company registered robust growth across its operational and financial metrics, driven by strong loan disbursements, expanding net interest margins, and operational efficiencies.

Strong Financial and Operational Performance

For the first quarter of FY27, Aavas Financiers reported a total income of INR 709.10 crore (INR 70,909.57 lakh), up from INR 627.93 crore recorded in the corresponding period of the previous fiscal year (Q1 FY26). Revenue from operations for the quarter stood at INR 708.72 crore, supported by primary interest income of INR 616.47 crore.

Net Profit Growth: Net profit for Q1 FY27 surged by 23% year-on-year to INR 171.27 crore (INR 17,126.81 lakh), compared to INR 139.23 crore in Q1 FY26.

Assets Under Management (AUM): Total AUM expanded by 15.4% year-on-year to reach INR 23,930.60 crore (INR 239 billion) as of June 30, 2026, up from INR 20,739.70 crore a year ago.

Loan Disbursements: Disbursements reached INR 1,610 crore during the quarter, delivering a sharp growth of 41% year-on-year.

Net Interest Income (NII) & Margins: Net Interest Income rose 18.2% year-on-year to INR 338.30 crore. Absolute Net Interest Margin (NIM) stood at INR 413.90 crore, while NIM as a percentage of total assets expanded by 22 basis points year-on-year to 7.70%.

Earnings Per Share (EPS): Basic EPS for the quarter was recorded at INR 21.60, while diluted EPS stood at INR 21.51 (face value of INR 10 per share).

Operational Efficiency and Margin Dynamics

The company demonstrated significant cost optimization during the quarter, bringing its cost-to-income ratio down by 254 basis points year-on-year to 43.7% (compared to 46.3% in Q1 FY26). Consequently, the operating expense-to-assets ratio improved by 9 basis points to 3.37%. Total expenses for the quarter amounted to INR 488.99 crore, with finance costs standing at INR 292.63 crore and employee benefit expenses at INR 121.70 crore.

In line with its customer-centric approach, Aavas Financiers passed on a 10 basis points reduction in Prime Lending Rate (PLR). Its spread moderated by 5 basis points year-on-year to 5.06%, while borrowing costs remained stable at 7.64% sequentially.

Pristine Asset Quality and Capital Position

Asset quality metrics remained healthy and well-managed:

Gross NPA (GNPA): Improved by 11 basis points year-on-year to 1.11%.

Net NPA (NNPA): Improved by 13 basis points year-on-year to 0.71%.

1+ Days Past Due (DPD): Improved by 39 basis points year-on-year to 3.76%, remaining comfortably below the 5% threshold.

Provision Coverage Ratio (PCR): Stood strong at 66.99%, with credit costs for the quarter well-contained at 24 basis points.

Active Customer Base: Active loan accounts increased by 10% year-on-year to reach 2,75,869.

Strong Balance Sheet & Capital Adequacy

Aavas Financiers maintained a robust balance sheet position as of June 30, 2026:

Net Worth: Compounded by 15.7% year-on-year to reach INR 5,219.56 crore (INR 5,21,955.75 lakh).

Capital Risk Adequacy Ratio (CRAR): Stood comfortably at 44.66%, indicating substantial capital cushioning.

Liquidity Coverage Ratio (LCR): Maintained at a healthy 163.89% under RBI guidelines.

Debt-to-Equity Ratio: Reported at 3.06, while Total Debts to Total Assets ratio stood at 0.73.

Return Profile: Return on Assets (ROA) improved by 25 basis points year-on-year to 3.19%, while Return on Equity (ROE) expanded by 78 basis points year-on-year to 13.34%.

Commenting on the performance, Mr. Manu Singh, Chief Executive Officer, said: "Q1 FY27 has been a strong quarter for Aavas and marks an important milestone in our growth journey. The strong performance during the quarter reflects a business that is becoming faster, fitter, and more productive, with greater accountability and sharper execution across the organization. During the quarter, we disbursed loans worth ₹16.1 bn, delivering robust growth of 41% YoY. This performance was broad-based and driven by a strong pickup in volumes, meaningful improvement in resource productivity, and healthy 38% YoY growth in the Home Loan segment.

Our AUM grew by 15.4% YoY to ₹239.3 bn as of 30th June 2026. Encouragingly, our monthly AUM addition improved by nearly 50% YoY during the quarter, enabling us to achieve in three months what previously took close to five months. This reflects the positive impact of our efforts around customer acquisition, productivity, and execution.

The quarter reflects the early benefits of our focused execution strategy, stronger field-level accountability, and continued emphasis on customer acquisition. The momentum witnessed during the quarter strengthens our confidence in the strategic initiatives underway and provides a solid foundation for the rest of the year.

During the quarter, we expanded our branch network to 440 across 15 states. We will continue to invest in branch expansion to further strengthen and diversify our presence.

Our NIMs expanded by 22-bps YoY to 7.70% during the quarter, supported by improvement in cost of borrowing coupled with our continued focus on risk-adjusted pricing. Despite a volatile interest rate environment and uncertain geo-political backdrop, Aavas managed its cost of borrowings efficiently. This underscores the strength of our diversified liability franchise and strong lender relationships. We continue to enjoy broad-based lender support, providing us with access to diversified, long-term, and cost-effective funding to support future growth.

We delivered 23% YoY growth in Net profit, driven by a healthy 18% YoY growth in Net Interest Income, supported by robust business growth. Our disciplined cost management approach, coupled with a continued focus on profitable growth, has started yielding encouraging results, reflected in a 254-bps YoY improvement in our cost-to-income ratio to 43.7% in Q1 FY27.

We continue to deliver industry-leading asset quality, with all key indicators trending positively and remaining well within our guided range. Our 1+ DPD improved by 39 bps YoY to 3.76% in Q1 FY27, remaining comfortably below 5%. Gross NPA improved to 1.11%, while Net NPA to 0.71%, underscoring the resilience of our portfolio and the effectiveness of our credit-first approach.

With clear accountability across functions and strong alignment throughout the organization, we are embedding greater execution discipline and rigor at every layer of the business, underpinned by a firm commitment to strong governance. Our collective ambition is anchored in a simple philosophy: People. Performance. Perseverance.

Shares of Aavas Financiers Limited was last trading in BSE at Rs. 1521.05 as compared to the previous close of Rs. 1497.95. The total number of shares traded during the day was 4269 in over 471 trades.

The stock hit an intraday high of Rs. 1528.65 and intraday low of 1484.45. The net turnover during the day was Rs. 6455997.00.

Source : Equity Bulls

Keywords

AavasFinanciers INE216P01012 HousingFinance Q1FY27 Q1FY2027 ResultUpdate