Aadhar Housing Finance Limited — Q4 FY26 earnings call

Call held 5 May 2026

Management summary

Aadhar Housing Finance closed FY26 on a strong note, achieving an AUM of INR30,571 crores, a 20% YoY growth, and a PAT of INR1,096 crores, also up 20% YoY. The company recorded its highest-ever quarterly disbursement of INR3,087 crores in Q4 FY26, driven by robust demand and branch network expansion. Asset quality showed significant improvement with GNPA at 1.08%, and the cost-to-income ratio improved by 55 bps for the full year. Management remains confident in sustaining growth and profitability while carefully managing competitive intensity and interest rate movements.

Highlights

  • AUM reached INR30,571 crores, registering 20% Y-o-Y growth.

  • Highest ever disbursement of INR3,087 crores in Q4 FY26, driven by steady demand and improved execution.

  • PAT for FY26 stood at INR1,096 crores, a 20% Y-o-Y growth.

  • Gross NPA improved to 1.08%, a sequential improvement of 30 bps versus Q3 FY26.

  • Cost-to-income ratio for FY26 improved by 55 bps to 35.9% compared to FY25.

Concerns

  • Incremental cost of borrowings increased by approximately 10 bps in Q4 FY26 compared to Q3 FY26.

  • Anticipated year-on-year contraction in spreads of 8-10 bps due to lower incremental business yields.

Key financials

2 periods

Headline

  • AUM
    ₹30,571 Cr
    YoY +20%
  • Gross NPA
    1.1%
    QoQ -0.3%
  • Exit Cost of Funds
    7.7%

FY26

  • PAT
    ₹1,096 Cr
    YoY +20%
  • Disbursements
    ₹9,556 Cr
    YoY +17%
  • Cost-to-Income Ratio
    35.9%

What they filed

Q1 FY27: revenue up 17.1%, net profit up 19.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue764 798 833 848 897 +17%943 +18%985 +18%993 +17%
Net profit228 239 245 237 266 +17%281 +18%311 +27%282 +19%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Liquidity Cash ₹1,425 Cr · Undrawn ₹1,687 Cr Undrawn sanctions as at 31st March '26 is INR1,687 crores, of which INR246 crores from NHB. Liquidity at the end of quarter 4 FY '26 stood at INR1,425 crores.
    Undrawn sanctions as at 31st March '26 is INR1,687 crores, of which we have INR246 crores undrawn from NHB. Liquidity at the end of quarter 4 FY '26 stood at INR1,425 crores.

Guidance & targets

Volume

  • AUM Growth Volume · ahead · High confidence 20%
    As we go ahead, we would continue with similar guidance of 20% AUM...

    — Rishi Anand

  • Disbursement Growth Volume · ahead · High confidence 17-18%
    ...and 17% to 18% disbursement growth.

    — Rishi Anand

  • Overall DA Growth Volume · next year · Medium confidence 10-15%
    In terms of overall DA compared to the INR1,725 crores that we did in the current year, probably next year, we would be trying to grow that in the range of anywhere between 10% to 15% in terms of overall DA.

    — Rajesh Viswanathan

Profitability

  • Profit Growth Profitability · ahead · High confidence 20%
    ...20% profit...

    — Rishi Anand

  • Spreads Contraction Profitability · year-on-year · Medium confidence 8-10 bps
    Our spreads year-on-year will probably see some contraction to the extent of about 8 bps to 10 bps.

    — Rajesh Viswanathan

Efficiency

  • Cost-to-Income Ratio Improvement Efficiency · current financial year · High confidence 50 bps
    This is in line with our guidance of dropping cost-to-income ratio by about 50 bps in the current financial year.

    — Rajesh Viswanathan

Portfolio Mix

  • LAP Mix Portfolio Mix · current quarter · Medium confidence 27-28%
    ...we want to maybe take it to about 27%,28% in the current quarter...

    — Rishi Anand

  • Book Level Ticket Size Portfolio Mix · shorter term · High confidence INR10-11.5 lakhs
    The intent is to maintain the book level ticket size even in the shorter term in the range of INR10 lakh to INR11 lakh, INR11.5 lakhs.

    — Rajesh Viswanathan

  • Self-employed Business as % of AUM Portfolio Mix · every year · Medium confidence 1-1.5% increase
    Always have guided that self-employed business will as a percentage of the AUM will move towards self-employed from -- overall book will move towards self-employed by 1%, 1.5% every year.

    — Rajesh Viswanathan

  • Home Loan to Non-Home Loan Mix Portfolio Mix · medium term · High confidence 70-30
    ...we will want to maintain at about 70-30 in the medium term.

    — Rajesh Viswanathan

What to watch in Q1 FY27

AUM Growth

Next financial year (FY27)
Current 20% Y-o-Y (INR30,571 crores)
Target Maintain 20% Y-o-Y growth

Why it matters

Key indicator of business expansion and market penetration.

As we go ahead, we would continue with similar guidance of 20% AUM...

Risks & concerns

  • Geopolitical issues (West Asia war) impacting bounce rates/delinquencies

    medium

    Management states bounce rates have been stable for 6 quarters and customers primarily deal in essential commodities, limiting impact.

    Analyst downplayed

  • Competitive intensity in certain segments (urban)

    medium

    Competitive intensity remains elevated in urban segments, but focus on low-income and end-user driven demand provides stability.

    Management acknowledged

  • Potential for spreads contraction

    medium

    Anticipated 8-10 bps year-on-year contraction in spreads due to lower yields on incremental business, but levers like LAP mix can help.

    Management acknowledged

Q&A highlights

8 direct
Impact of West Asia war on bounce rates/delinquencies Direct
Our bounce rates have been stable for the last 6 quarters. So from that perspective, we are, I would say, safe as we speak.

Addresses a macro geopolitical risk and its direct impact on asset quality, with management providing specific data and operational measures.

Asked by Renish from ICICI

Sustainability of 20% AUM growth and market share in low-income housing Direct
We've been delivering constantly, we've been delivering an AUM growth of upward of close to about 20%, 22%. And I have just in my opening statement, clearly mentioned that we will look at similar numbers from a short-term to medium-term perspective.

Confirms management's confidence in sustaining current growth rates, supported by market share data and government initiatives.

Asked by Renish from ICICI

Slower LAP growth and its impact on AUM growth Direct
LAP growth -- and you're right, when you read at the data that LAP growth has been slightly slow, I would say this was deliberate and it was kind of completely planned.

Reveals a deliberate strategic decision to slow LAP growth due to tariff issues and current geopolitical situation, impacting portfolio mix and risk management.

Asked by Kunal Shah from Citigroup

Higher other income and one-off items Direct
One was an IT refund of about INR2.5 crores that we have taken back to the P&L. And the second was some old write-backs that we had, which we had not done for a long time, and that is about to the extent of about INR3.5 crores. So put together, it is the extent in the range of about INR6 crores to INR7 crores that we had as a onetime, which is sitting in the fee income.

Clarifies the nature of higher other income, identifying specific one-off items totaling INR6-7 crores, which helps in assessing recurring profitability.

Asked by Kunal Shah from Citigroup

PLR reduction in Feb '26 and outlook on yields/spreads Direct
Our view is that the interest rate cycle has stagnated and to a certain extent, will be stagnant for at least two, three quarters.

Provides management's view on the interest rate environment and its impact on spreads, indicating a stable but potentially contracting spread outlook.

Asked by Shreya Shivani from Nomura

Increase in opex to AUM sequentially despite limited branch growth Direct
I think opex to AUM, it is always a quarter 4 phenomenon because we run various competition and contests in quarter 4 for our employees.

Explains the sequential increase in operating expenses as a seasonal Q4 phenomenon related to employee incentives, rather than a structural increase in costs.

Asked by Prithviraj Patil from Investec

Drivers of 26% home loan growth in Q4 FY26 Direct
I think it is also to -- also go to the various government initiatives like PMAY. We are the largest player in PMAY play today, close to about INR50 crores of our subsidies have gone to the consumers about 15,000, 16,000 customers.

Identifies government initiatives like PMAY as a key driver for strong home loan growth, highlighting the company's significant role in subsidy disbursement.

Asked by Nischint Chawathe from Kotak

Repricing of non-banking funding sources Direct
See, our NCDs is about 22% is our NCD. So NCDs typically are 3-year, 4-year NCDs, which typically don't get repriced. These are all -- these are NCDs are broadly fixed type of instruments.

Clarifies the repricing dynamics of different funding sources, distinguishing between fixed-rate NCDs and floating-rate bank/NHB borrowings, which impacts the overall cost of funds.

Asked by Rakesh Kumar from Valentis Advisors

2 min read 6 chapters

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.

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