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    Aptus Value Hou.

    APTUSGood
    Financial Services·1 Nov 2025
    Management Summary

    Aptus delivered a robust quarter characterized by industry-leading RoA/RoE and a significant strategic pivot. The company has consciously moved away from loans below ₹7 lakhs to distance itself from MFI-like customer profiles, focusing instead on higher-quality self-employed borrowers. Despite this shift and temporary weather disruptions, management remains confident in achieving 25%+ AUM growth and reaching a ₹25,000 crore AUM target in the medium term.

    Highlights

    7

    • Profit After Tax (PAT) grew 24% YoY to ₹227 crores for Q2 FY26; H1 FY26 PAT rose 26% to ₹446 crores.

    • Disbursements in Q2 FY26 reached ₹963 crores, a strong 24% QoQ growth, despite a strategic decision to stop loans below ₹7 lakhs.

    • AUM growth stood at 22% YoY and 4% QoQ, with a medium-term vision to reach ₹25,000 crores.

    • Industry-leading profitability metrics maintained with RoA at 7.9% and RoE at 20%.

    • Asset quality saw a slight marginal increase in GNPA to 1.55% (up 6 bps) while NNPA stood at 1.17%.

    • Credit cost increased to 50 bps in H1 FY26 due to a conservative shift in write-off policy (100% write-off after 500 days vs 2 years previously).

    • Cost of borrowing improved by 20 bps QoQ to 8.42%, with the latest incremental borrowing at approximately 7.9%.

    Key financials

    Single quarter

    06 metrics
    1. 01Net Interest Income (NII)₹389 Cr+27%YoY
    2. 02Profit After Tax (PAT)₹227 Cr+24%YoY
    3. 03Return on Assets (RoA)7.9%
    4. 04Return on Equity (RoE)20%
    5. 05GNPA1.6%

    Guidance & targets

    5
    CategoryTargetPriority
    Volume
    AUM Target
    ₹25,000 crores
    		High
    Revenue
    AUM Growth Rate
    25%+
    		High
    Other
    Average Ticket Size (ATS) Increase
    ₹1 lakh per year
    		Medium
    Other
    Direct Assignment Share
    10%
    		Medium
    Margin
    Credit Cost
    50 bps
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Short-term disbursement drag from ticket size floor

    Stopping loans <₹7L impacted Q2 growth, though management expects recovery from Q3 onwards. — Management acknowledged

    medium

    Increased Credit Costs

    Credit cost rose to 50 bps due to policy change; management views this as a conservative, sustainable run rate. — Analyst acknowledged

    low

    Weather-related disruptions

    Temporary disruptions in certain clusters impacted disbursements in the first half. — Management acknowledged

    low

    Areas of Evasion(1)

    • Specific monthly disbursement figures for September/October were withheld.

    Q&A highlights

    3

    “Actually from 1st of July, we stopped taking in any proposals of less than INR7 lakhs... with a specific purpose to keeping in mind that we would want to maintain clear distance from a micro finance kind of business.”

    Explains the temporary slowdown in disbursement growth as a deliberate move to improve customer profile and credit quality.

    asked by Rajiv Mehta, Yes Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Pivot: Distancing from Microfinance

    Aptus has implemented a significant strategic shift by stopping all loan logins below ₹7 lakhs effective July 1, 2025. This move is intended to differentiate the company's profile from microfinance institutions (MFI) and focus on higher-quality self-employed borrowers in Tier 3 and 4 towns. While this caused a temporary drag on disbursement growth in H1 FY26, management reports that the sales team has already adjusted to the new floor, with October showing healthy traction.

    02

    Conservative Accounting: Accelerated Write-offs

    The company has tightened its technical write-off policy, moving from a 2-year window to 100% write-off after 500 days. This change is the primary driver behind the credit cost increasing to 50 basis points in H1 FY26 from the previous 20-30 bps range. Management views this as a conservative measure to de-risk the balance sheet, noting that their pricing already accounts for a 50 bps credit cost.

    03

    AUM Growth Trajectory and Medium-Term Vision

    Despite a modest 8% YoY disbursement growth in H1, AUM grew by 22% YoY to reach ₹11,767 crores. Management remains steadfast in its target to reach ₹25,000 crores AUM in the medium term, implying a 25% CAGR over the next three years. This growth is expected to be fueled by branch expansion (40 new branches planned this year) and a steady increase in the average ticket size by ₹1 lakh annually.

    04

    Operational Efficiency and Digital Stabilization

    The new loan origination system, ZIVA, has now stabilized across all branches after an initial settling period. This system is expected to drive productivity improvements in legal, credit, and sales functions. Currently, sales productivity stands at approximately 3 to 3.1 files per officer per month, and management aims to improve this through data-driven insights and system-led enhancements.

    05

    Liability Diversification and Cost of Funds

    Aptus continues to benefit from a declining cost of borrowing, which fell to 8.42% in Q2. The company is actively diversifying its funding mix, with a recent direct assignment transaction of ₹170 crores. Management plans to increase the share of direct assignments to 6-7% of the loan book (up to a board-authorized 10%) to further optimize the balance sheet and liquidity, which currently stands at a strong ₹1,700 crores.

    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.