Detailed Narrative
Strong Financial Performance in Q4 FY26
Aadhar Housing Finance concluded FY26 with robust performance, achieving an AUM of INR30,571 crores, marking a 20% year-on-year growth. The company reported its highest-ever quarterly disbursement of INR3,087 crores in Q4 FY26, a 20% increase year-on-year, contributing to a full-year disbursement of INR9,556 crores, up 17%. Net profit for FY26 stood at INR1,096 crores, growing 20% year-on-year, with Q4 PAT at INR311 crores, up 27%.
Improving Asset Quality and Operational Efficiency
The company demonstrated strong asset quality, with Gross NPA improving to 1.08% in Q4 FY26, a sequential improvement of 30 basis points. Collection efficiency remained robust at over 99.8%, reflecting consistent on-the-ground execution. Operational efficiency also improved, as the cost-to-income ratio for FY26 came in at 35.9%, an improvement of 55 basis points compared to FY25. Management aims to further reduce this ratio by 50 bps in the current financial year.
Strategic Funding and Spreads Management
Total borrowings as of March 31, 2026, were INR18,744 crores, a 15% increase, with a diversified mix of 51% from banks, 22% from NHB, and 19% from NCDs. The exit cost of funds was 7.71%, and the exit spread was 5.82%, up from 5.7% in the previous year. While anticipating a potential 8-10 bps contraction in spreads year-on-year due to lower incremental business yields, the company plans to use its LAP portfolio mix as a lever to protect spreads.
Branch Network Expansion and Technology Adoption
Aadhar Housing Finance expanded its network by adding 46 branches in FY26, bringing the total to 626 branches across 22 states, covering over 550 districts. The company is increasingly leveraging AI and analytics across sourcing, underwriting, and collections to improve turnaround times, strengthen risk assessment, and enhance collection efficiencies, with early benefits observed in productivity and decision-making.
Focus on Affordable Housing and Emerging Markets
The company maintains a strong focus on the affordable housing segment, particularly for first-time homebuyers in emerging markets, which drives stable, end-user demand and limits speculative activity. Demand trends remain steady, supported by policy measures like PMAY. The average ticket size is INR10.9 lakhs, with incremental disbursements at INR12.5 lakhs, and the company aims to maintain the book level ticket size in the INR10-11.5 lakh range.
Portfolio Mix and Strategic Levers
The portfolio remains fully secured, with 73% home loans and 27% non-housing loans (Loan Against Property). Management deliberately slowed LAP growth in Q4 FY26 due to market conditions but plans to incrementally increase the LAP mix to 27-28% in the current quarter as a strategic lever. The company also aims to increase the share of self-employed business in its AUM by 1-1.5% annually, contributing to a slightly higher yield-generating strategy.