Detailed Narrative
Robust AUM and Disbursement Momentum
Aadhar Housing Finance achieved a new AUM milestone of ₹23,976 crores, growing 21% YoY. Disbursements remained strong at ₹2,094 crores for the quarter, up 20% YoY. Management remains confident in maintaining a 22-24% AUM growth trajectory over the next 2-3 years, supported by a deeper impact strategy targeting Tier 4 cities and beyond.
Asset Quality and Credit Cost Dynamics
GNPA improved to 1.36% from 1.4% YoY. While credit costs saw a slight uptick in Q3 due to seasonal slippages in Stage 2 assets (10-12 bps slippage in December), management expects this to normalize in Q4. The company targets an NPA level of approximately 1.1% by March 2025 and a full-year credit cost between 25-27 bps.
Spread Management and Yield Outlook
The company exited the quarter with a portfolio yield of 13.9% and spreads of 5.8%. However, incremental business is being priced 40-45 bps lower than the existing book, leading to a guided exit spread of 5.7% to 5.75% by year-end. Management noted that 77% of assets and 79% of borrowings are floating, providing some natural hedge against interest rate cycles.
Digital Transformation and Operational Efficiency
Aadhar has transitioned to a digital lending model with 100% paperless onboarding via mobility solutions. This digital push, combined with data analytics for risk categorization and collection triggers, has contributed to a 60 bps YoY improvement in the cost-to-income ratio (34.8%). Management aims for a total 100 bps reduction in cost-to-income for the full fiscal year.
Strategic Expansion and Market Outlook
The company added 12 branches in Q3, bringing the 9-month total to 34, with a target of reaching ~55 new branches by year-end. Management expressed bullishness on the affordable housing segment, citing positive budget announcements like PMAY 2.0 and the SWAMIH Fund 2.0. They reported that 6,700 customers have already shown interest in the new PMAY subsidy scheme.