Aptus Value Housing Finance India Limited — Q2 FY26 earnings call

Call held 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

  • 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

  1. Net Interest Income (NII) ₹389 Cr +27%YoY
  2. Profit After Tax (PAT) ₹227 Cr +24%YoY
  3. Return on Assets (RoA) 7.9%
  4. Return on Equity (RoE) 20%
  5. GNPA 1.6%
  6. Opex to Average AUM 2.7%

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.

Guidance & targets

Volume

  • AUM Target Volume · medium term · High confidence ₹25,000 crores
    With a vision to reach INR25,000 crores AUM in the medium term, we aim to build on the current momentum and sustain a 25% plus growth.

    — M. Anandan, Executive Chairman

Revenue

  • AUM Growth Rate Revenue · next 3 years · High confidence 25%+
    we clearly grow at a rate of about 25% CAGR in the next 3 years, we will cross even INR25,000 crores.

    — M. Anandan, Executive Chairman

Other

  • Average Ticket Size (ATS) Increase Other · annually · Medium confidence ₹1 lakh per year
    Progressively, our plan is really increase it by INR1 lakh average ticket size per year.

    — M. Anandan, Executive Chairman

  • Direct Assignment Share Other · FY26 · Medium confidence 10%

    From 3% today

    while we have the Board authorization to go direct assignment up to 10% of the loan book, we may look at around 6% to 7%, not beyond that.

    — M. Anandan, Executive Chairman

Margin

  • Credit Cost Margin · FY26 · Medium confidence 50 bps

    Previously 30-40 bps → 50 bps

    to be on the conservative side, we said we will take it up to 50. And that is one of the reasons why we have consciously gone for this decision of writing-off beyond 500 days.

    — M. Anandan, Executive Chairman

Risks & concerns

  • Short-term disbursement drag from ticket size floor

    medium

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

    Management acknowledged

  • Increased Credit Costs

    low

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

    Analyst acknowledged

  • Weather-related disruptions

    low

    Temporary disruptions in certain clusters impacted disbursements in the first half.

    Management acknowledged

Areas of evasion (1)

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

Q&A highlights

2 direct
Strategic exit from loans below ₹7 lakhs Direct
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

Analysis of Balance Transfer (BT) Outs Direct
our BT continues to be around 7%... around 5% is really the customer pay money out of their own source... So what is the loan transfer, is only 2.5%.

Clarifies that the majority of portfolio runoff is due to customer prepayments rather than competitive poaching by other banks.

Asked by Kunal Shah, Citigroup

Sustainability of Credit Cost and Write-off Policy Partial
we have now decided to go for 100% technical write-off of outstanding beyond 500 days. Earlier, we were partly following a practice of 100% write-off beyond 2 years.

Highlights a shift toward more conservative accounting, which explains the spike in credit costs to 50 bps.

Asked by Nidhesh Jain, Investec

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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