AAVAS Financiers Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript AAVAS Financiers Ltd filed with BSE on 12 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Aavas Financiers reported Q4 FY26 net profit growth of 18% year-on-year to Rs. 1.82 billion, driven by NII growth and margin expansion, with AUM at Rs. 234.5 billion registering 15% year-on-year growth. Disbursements for FY26 grew 11% to Rs. 67.8 billion, while asset quality metrics improved with GNPA at 1.05% and 1+ DPD at 3.17%. Management discussed cost of funds improvement, branch network expansion to 435 branches, and a leadership transition with Manu Singh addressing the call as CEO for the first time.
1 statement from this call is not shown because its supporting quote could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Net profit: Rs. 1.82 billion (Q4 FY26)
p. 4
“Our net profit for Q4 grew by 18% to Rs. 1.82 billion, led by a robust 17% Y-o-Y growth in NII on account of healthy improvement in our NIMs.”
Manu Singh, page 4 of the filed PDF · View the filing
AUM: Rs. 234.5 billion (FY26)
p. 4
“Our AUM at the end of FY26 stood at Rs. 234.5 billion, registering a Y-o-Y growth of 15%, while disbursements for the year grew 11% at Rs. 67.8 billion.”
Manu Singh, page 4 of the filed PDF · View the filing
Disbursements: Rs. 23.5 billion (Q4 FY26)
p. 3
“We disbursed Rs. 23.5 billion, 16% higher than same time last year and 36% growth Q-o-Q, which firmly reflects an improving operating rhythm of the business.”
Manu Singh, page 3 of the filed PDF · View the filing
Net interest margin: 8.45% (Q4 FY26)
p. 4
“Our NIMs expanded by 44 bps sequentially to 8.45% during the quarter.”
Manu Singh, page 4 of the filed PDF · View the filing
1+ DPD: 3.17% (FY26)
p. 4
“Our asset quality remains pristine with 1+ DPD well below 4%, improving by 63 bps sequentially to 3.17% as of Mar-26, while GNPA improved by 14 bps Q-o-Q to 1.05%.”
Manu Singh, page 4 of the filed PDF · View the filing
Credit cost: 13 bps (Q4 FY26)
p. 4
“Credit costs improved to 13 bps, driven by lower 1+ flow, and improved across buckets.”
Manu Singh, page 4 of the filed PDF · View the filing
ROA: 3.5% (Q4 FY26)
p. 4
“Our ROA improved by 13 bps to 3.5% and ROE improved by 38 bps quarter-on-quarter to 14.67% in Q4.”
Manu Singh, page 4 of the filed PDF · View the filing
Spread: 5.20% (FY26)
p. 5
“Our spread improved by 31 bps Y-o-Y to 5.20% in FY26.”
Ghanshyam Rawat, page 5 of the filed PDF · View the filing
Outstanding borrowing: Rs. 204 billion (as of March 31, 2026)
p. 5
“As on 31st March 2026, the outstanding borrowing stood at Rs. 204 billion.”
Ghanshyam Rawat, page 5 of the filed PDF · View the filing
Net worth: Rs. 50.5 billion (as of March 31, 2026)
p. 5
“We remain well capitalized with a net worth of Rs. 50.5 billion with a capital to risk-weighted assets ratio of 44.6%, significantly above the regulatory requirement.”
Ghanshyam Rawat, page 5 of the filed PDF · View the filing
Gross Stage 3: 1.05% (FY26)
p. 5
“And Gross Stage 3 and Net Stage 3 improved to 1.05% and 0.68%, respectively.”
Ashutosh Atre, page 5 of the filed PDF · View the filing
Branch network: 435 branches across 15 states (FY26)
p. 4
“During the last quarter, we added 31 branches, bringing our total network to 435 branches across 15 states.”
Manu Singh, page 4 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
AUM growth — 20%-plus
stated as an aspiration by Manu Singh
p. 6
“Our aspiration clearly is to consistently deliver 20%-plus AUM growth, largely to outperform industry.”
Manu Singh, page 6 of the filed PDF · View the filing
ROE — high teens
stated as an aspiration by Manu Singh
p. 6
“I think high teens is where our eyes are very clearly set on ROE.”
Manu Singh, page 6 of the filed PDF · View the filing
Spread — 5%+
stated firmly by Ghanshyam Rawat
p. 7
“We're very confident to maintain the spreads 5%+.”
Ghanshyam Rawat, page 7 of the filed PDF · View the filing
Credit cost — below 25 bps
stated firmly by Manu Singh
p. 4
“We continue to maintain our guidance on keeping credit costs under check and below 25 bps on a sustainable basis.”
Manu Singh, page 4 of the filed PDF · View the filing
Opex to AUM ratio — 2.75% · once balance sheet doubles
stated conditionally by Ghanshyam Rawat
p. 10
“We maintain that once we reach a double size of the balance sheet, it will be somewhere 2.75% opex to AUM ratio.”
Ghanshyam Rawat, page 10 of the filed PDF · View the filing
Opex to assets — below 3% · 2-to-3-year platform
stated as an aspiration by Manu Singh
p. 11
“I think on a 2-to-3-year platform, yes. We are shooting for something below 3%.”
Manu Singh, page 11 of the filed PDF · View the filing
Balance transfer out rate — less than 6%
stated firmly by Ghanshyam Rawat
p. 11
“As a management team, we want to keep control at less than 6%.”
Ghanshyam Rawat, page 11 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management stated an aspiration of 20%-plus AUM growth with focus on sharper execution across product, channel and geography.
Answered by Manu Singh
Asked by Renish Bhuva: What is the medium-term growth outlook and aspirational growth target for FY27 and FY28?
p. 6
“Our aspiration clearly is to consistently deliver 20%-plus AUM growth, largely to outperform industry.”
Manu Singh, page 6 of the filed PDF · View the filing
CFO said cost of borrowing has stabilized and management is confident of maintaining spreads above 5%.
Answered by Ghanshyam Rawat
Asked by Renish Bhuva: Where do you see spreads settling given the PLR cuts?
p. 7
“We're very confident to maintain the spreads 5%+.”
Ghanshyam Rawat, page 7 of the filed PDF · View the filing
Management said the yield optimization journey has already started in the current financial year across branches.
Answered by Manu Singh
Asked by Kunal Shah: Have yields started increasing on any product segments as part of risk-adjusted pricing?
p. 8
“So, as we speak, there is no better way to start a good deed than today. So, it has already started in the financial year.”
Manu Singh, page 8 of the filed PDF · View the filing
Management asserted that increasing yield does not equate to increasing risk and that credit cost guidance remains unchanged.
Answered by Manu Singh
Asked by Abhijit Tibrewal: Does the push for higher yields imply the company is taking on more risk or moving into a different customer segment?
p. 9
“I will repeat that, increase of yield by no standards equals mathematically to increase of risk.”
Manu Singh, page 9 of the filed PDF · View the filing
CFO attributed the rise to branch expansion investment, new ESOP/PSOP costs from the CVC transition, and lower-than-expected growth against which costs were invested.
Answered by Ghanshyam Rawat
Asked by Gaurav Khandelwal: What explains the opex to AUM ratio increase in FY26 despite prior years of improvement?
p. 10
“This year, we had higher opex than last year. It has two factors: We have invested in the branch expansion, which has led to higher manpower because we firmly believe that we must invest in the branch expansion, which will give us a better growth momentum than what we have done in the past.”
Ghanshyam Rawat, page 10 of the filed PDF · View the filing
CFO explained repayment rate increase is due to customer prepayments and part-payments, not balance transfers, which remain under control.
Answered by Ghanshyam Rawat
Asked by Raghav Garg: Why have overall repayment rates increased even though BT-out rates have declined?
p. 12
“No doubt, customers sometimes get extra money, and they pay back, there's part closures or, extra EMI they pay. Only largely on that account, we have slightly higher repayment during this year.”
Ghanshyam Rawat, page 12 of the filed PDF · View the filing
CRO said no adverse trend has been observed so far in bouncing or collections, though the company is monitoring closely.
Answered by Ashutosh Atre
Asked by Shreepal Doshi: How are ground trends looking in terms of bounce rates and delinquency amid the Middle East war and inflation concerns?
p. 12
“But thankfully, as of now, we are not seeing any kind of trend either in bouncing or in our collections.”
Ashutosh Atre, page 12 of the filed PDF · View the filing
Risks flagged
Potential impact of Middle East war and inflation on customer profiles linked to travel, tourism, hotels and energy-related sectors
p. 13
“It is as your guess as mine. So, the immediate visibility comes to, travel, tours and hotels, restaurants, and maybe even anything that is related to energy-related things, will be directly affected.”
Ashutosh Atre, page 13 of the filed PDF · View the filing
Missed growth targets in FY26 led to higher opex-to-AUM ratio due to unabsorbed investment costs
p. 10
“Thirdly, what we thought of, growth for which we have invested, we have missed that growth during the year.”
Ghanshyam Rawat, page 10 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.