Aptus Value Housing Finance India Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Aptus delivered a resilient Q1 FY26, characterized by strong profitability (20%+ ROE) and a significant credit rating upgrade. While disbursements saw a seasonal dip in April and May, management reported a strong recovery in June and July. The company is aggressively pursuing a long-term target of ₹25,000 crore AUM by FY29 through geographic expansion into Maharashtra and Odisha and digital-led customer acquisition.

Highlights

  • Assets Under Management (AUM) grew 24% YoY to ₹11,267 crores

  • Profit After Tax (PAT) increased 28% YoY to ₹219 crores

  • Return on Equity (ROE) crossed the 20% milestone, reaching 20.1%

  • Return on Assets (ROA) remained industry-leading at 7.9%

  • Net Interest Margin (NIM) stood at 13.4%, supported by yield management

  • Gross NPA (GNPA) rose 19bps sequentially to 1.49% due to seasonality

  • Disbursements for the quarter were ₹775 crores, up 15% YoY but down 27% QoQ

  • Credit rating upgraded to CARE AA from AA- during the quarter

Key financials

  1. AUM ₹11,267 Cr +24%YoY
  2. PAT ₹219 Cr +28%YoY
  3. NIM 13.4%
  4. ROA 7.9%
  5. ROE 20.1%
  6. GNPA 1.5%

What they filed

Q1 FY27: revenue up 15.4%, net profit up 19.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue421 450 484 520 544 +29%554 +23%574 +19%600 +15%
EBITDA353 383 409 439 453 +28%455 +19%— —
Net profit182 190 207 219 227 +25%236 +24%261 +26%261 +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.

Segment breakdown

  • Housing Loans
    61% AUM Share (Consolidated)72% AUM Share (HFC Entity)
  • Non-Housing Loans
    39% AUM Share (Consolidated)

Guidance & targets

Volume

  • AUM Volume · by FY 28-29 · High confidence ₹25,000 crores
    Aligned with our vision of scaling our AUM to ₹25,000 crores by FY 28-29.

    — M. Anandan, Executive Chairman

  • AUM Growth Volume · FY26 · Medium confidence 28-29%
    if the disbursement growth is around 20% to 22%, there will be a 6% more on the AUM growth. So that is what we are targeting, which is around 28%, 29%.

    — P. Balaji, Managing Director

Margin

  • Cost of Borrowing Reduction Margin · by year-end · High confidence 40-45 bps
    by the year-end, we should get at least 0.4% to 0.45% reduction in the borrowing cost on the existing borrowings.

    — P. Balaji, Managing Director

Profitability

  • ROE Profitability · Medium Term · Medium confidence 22%
    Our objective is to cross 22% as fast as possible.

    — P. Balaji, Managing Director

Other

  • Credit Cost Other · FY26 · High confidence 45-50 bps
    The credit cost was sequentially up by 8 basis points to 38 basis points but remained under our 45 to 50 basis points guidance.

    — P. Balaji, Managing Director

Capacity

  • Branch Expansion (Odisha & Maharashtra) Capacity · FY26 · High confidence 10 new branches
    In this year, we'll be opening 10 more. That is 5 each in Odisha and Maharashtra.

    — P. Balaji, Managing Director

Risks & concerns

  • Manpower Attrition

    medium

    Attrition remains high at the field officer level (sales and collections), which is a challenge for maintaining productivity.

    Management acknowledged

  • Competitive Intensity

    medium

    Increased competition from banks and emerging Small Finance Banks (SFBs) shifting focus toward secured affordable housing products.

    Management acknowledged

  • Asset Quality Seasonality

    low

    GNPA rose 19bps to 1.49% in Q1; management attributes this entirely to seasonal factors (heat, school fees) and expects normalization.

    Both downplayed

Q&A highlights

3 direct
Growth Slowdown and Recovery Direct
if you look at my June and July disbursement, it has come back to normalcy... the average monthly disbursement is almost at ₹350 crores.

Confirms that the Q1 dip was seasonal and that the company is back on track for its 28-29% AUM growth target.

Asked by Kunal Shah, Citigroup

Asset Quality vs. Collection Efficiency Direct
30 plus is 6.45% and NPA is 1.49%, which means the balance 5%, they pay before it becomes an NPA... collection efficiency computation... includes the OD collections.

Clarifies the gap between high 30+ DPD and low GNPA, explaining the flow and the impact of overdue collections on reported efficiency.

Asked by Amit J, Jawade Partners

Cost of Funds and Rating Upgrade Direct
incremental borrowings... used to borrow between 8.6% to 8.7%. Now it has come down to 8.05% to 8.1%... we are not contemplating any passing on of benefits [to customers].

Indicates significant margin expansion potential as borrowing costs drop while lending rates remain largely fixed.

Asked by Rajiv Mehta, Yes Securities

2 min read 5 chapters

Detailed narrative

Profitability Milestones and Efficiency

Aptus achieved a significant milestone in Q1 FY26 by delivering an ROE of 20.1%, supported by a robust ROA of 7.9%. The company's NIM remained strong at 13.4%, while opex-to-assets was controlled at 2.7% despite ongoing investments in branch expansion and digital capabilities. Management is now targeting a medium-term ROE of 22%, driven by lower borrowing costs and steady yields.

Liability Management and Rating Upgrade

The company's long-term credit rating was upgraded to CARE AA from AA-, reflecting its financial strength and prudent risk management. This upgrade, combined with the repo rate cycle, is expected to reduce the cost of borrowings by 40-45 basis points by the end of FY26. Incremental borrowing rates have already dropped to 8.05%-8.1% for the HFC entity, down from 8.6%-8.7% previously.

Geographic Expansion Strategy

Aptus is successfully diversifying beyond its southern strongholds, with its loan book in Maharashtra and Odisha crossing ₹67 crores. The company plans to open 10 more branches in these states (5 each) during FY26, with another 10-15 planned for the following year. Management follows a 'contiguous expansion' strategy, focusing on understanding local culture and markets before scaling aggressively.

Asset Quality and Collection Dynamics

While GNPA saw a seasonal uptick to 1.49%, management remains confident in its credit underwriting, noting an average LTV of only 40%. The 30+ DPD stands at 6.45%, but the company maintains a high collection efficiency (99.12% for the quarter, improving to 99.7% in June). The use of SARFAESI for accounts beyond 90 days serves as a critical negotiation tool for settlements.

Digital Transformation and Acquisition

Digital-led customer acquisition is gaining traction, with 21% of Q1 FY26 business originating through referral apps, construction ecosystem apps, and social media. A new mobile-first lead management platform launched in April 2024 is streamlining operations and boosting collection productivity, helping to offset some of the challenges posed by field-level attrition.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Financial Services earnings calls