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    Aadhar Housing Finance Limited

    AADHARHFCStrong
    Financial Services·30 Jan 2026
    Management Summary

    Aadhar Housing Finance delivered a robust Q3 FY26, characterized by 20% AUM growth and steady asset quality improvements. The company is benefiting from a declining interest rate cycle and the PMAY 2.0 scheme, where it leads in subsidy claims. Management expressed high confidence in hitting the ₹30,000 crore AUM milestone by FY26 end while maintaining industry-leading spreads of nearly 6%.

    Highlights

    8

    • Assets Under Management (AUM) reached ₹28,790 crores, registering a 20% YoY growth.

    • Profit After Tax (PAT) for Q3 FY26 stood at ₹294 crores (excluding Labor Code impact), up 23% YoY.

    • Gross NPA improved sequentially by 4 bps to 1.38%, with a target to reach 1.1%-1.15% by year-end.

    • Disbursements for 9M FY26 grew 15% YoY to ₹6,469 crores.

    • Return on Assets (RoA) and Return on Equity (RoE) stood at 4.4% and 15.6% respectively for the quarter.

    • Cost-to-income ratio improved by 50 bps YoY to 35.4% for the 9-month period.

    • The company added 10 new branches in Q3, taking the total network to 621 branches across 22 states.

    • Management announced a 15 bps interest rate cut for customers starting February 2026 following RBI repo rate easing.

    What Changed2

    vs Q4 FY26

    Guidance items10 → 5 (-5)Q&A highlights8 → 3 (-5)

    Key financials

    Single quarter

    06 metrics
    1. 01AUM₹28,790 Cr+20%YoY
    2. 02PAT (Excl. Labor Code)₹294 Cr+23%YoY
    3. 03GNPA1.4%+1.4%YoY
    4. 04RoA4.4%
    5. 05Cost-to-Income Ratio35.4%-1.4%YoY

    Segment breakdown

    AUM Share9M Disbursement Growth
    Salaried Segment55%—
    Non-Housing Loans (NHL)27%24%
    Home Loans (HL)—11.5%
    Heatmap· 2 shared metrics

    Guidance & targets

    5
    CategoryTargetPriority
    Volume
    AUM
    ₹30,000 crores
    		High
    Margin
    Credit Cost
    25 bps
    		High
    Margin
    Interest Rate Cut
    15 bps
    		High
    Other
    GNPA
    1.1% to 1.15%
    		Medium
    Capacity
    Branch Expansion
    40 to 50 branches
    		High

    Risks & concerns

    4
    RiskSeverity

    Implementation of New Labor Code

    Impacted the quarter with a one-time past service cost of ₹16 crores. — Management acknowledged

    low

    Competitive Intensity in Affordable Housing

    Management argues that their focus on low-income segments (ticket size <₹15 lakhs) and deep-impact locations (450+ branches) sees significantly less competition than the 'prime' affordable segment. — Analyst downplayed

    medium

    Geographic Stress (Punjab)

    Punjab is still struggling to recover from flood situations, leading to slightly lower growth in that specific state. — Management acknowledged

    low

    Areas of Evasion(1)

    • Specific retention count for BT requests (promised to provide later).

    Q&A highlights

    3

    “The way I look at my current numbers, even for January, they are upward of what we delivered in December. So with the current pace of numbers, I foresee that the quarter 4 is completely protected.”

    Confirms that the company is not seeing the growth slowdown currently affecting some peers in the HFC sector.

    asked by Abhishek Kumar Jain

    2 min read5 chapters

    Detailed Narrative

    01

    AUM Milestone and Growth Trajectory

    Aadhar is on track to cross the ₹30,000 crore AUM mark by the end of FY26, supported by a 20% YoY growth rate. Management highlighted that January 2026 performance is already exceeding December levels, giving them high confidence in meeting year-end targets. The growth is well-distributed, with no single state contributing more than 15% to the total AUM.

    02

    Asset Quality and Collection Efficiency

    Asset quality showed meaningful improvement, with GNPA at 1.38% and 1+ DPD improving by 31 bps sequentially to 6.86%. Management expects GNPA to settle between 1.1% and 1.15% by the end of the fiscal year. Collection efficiency remains robust at over 99%, and Stage 2 assets improved by 20 bps, indicating lower slippage risk into Stage 3.

    03

    Interest Rate Cycle and Spread Management

    Following RBI rate cuts, Aadhar's ALCO decided to pass on a 15 bps rate cut to customers starting February 2026. Despite this, management expects exit spreads to remain healthy at approximately 5.8%, which is an improvement over the previous year. This is possible due to the company's diversified borrowing profile and the reduction in incremental borrowing costs to 7.5%.

    04

    PMAY 2.0 and Government Initiatives

    The company is positioning itself as a leader in the PMAY 2.0 scheme, with over 10,000 customers already receiving interest subsidies. Management believes the renewed program is significantly improving affordability for first-time homebuyers in the EWS and LIG segments. The turnaround time for subsidy processing through NHB is currently 2-3 working days.

    05

    Operational Efficiency and Branch Strategy

    The cost-to-income ratio improved to 35.4%, and management aims for a further 50 bps reduction for the full year. The branch expansion strategy remains aggressive yet calibrated, with a plan to add 40-50 branches annually. Currently, 450 out of 621 branches are in 'emerging' locations where competitive intensity is lower than in urban centers.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.