Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
4 Balaji P., Manoharan C T, M. Anandan, Sanjay Mittal
Analysts
10 Amit Khaitan, Amit Khetan, Ankit Shah, Nischint Chawathe, Raghav Garg, Rajiv Mehta, Renish Patel, Shubhi Gupta, Sucrit D. Patil, Umang Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| AUM | ₹13,648 crores | Grew 21% YoY, driven by 36% disbursement growth and broad-based expansion across geographies and channels |
| Disbursements | ₹1,053 crores | Up 36% YoY; July '26 disbursements up 25% YoY, reinforcing FY27 AUM growth trajectory |
| Advances Book | ₹12,691 crores | Difference from AUM (~₹957 crores) reflects direct assignments and ECL/provision adjustments |
| Branch Network | 372 branches | Added 33 branches in Q1 (10-12 opened before May 31); FY27 target of 60-70 additions |
| GNPA | 1.7% | Up from 1.52% in Q4 FY26; HFC credit cost 0.2%, NBFC ~1.4%, consolidated assessed on portfolio mix |
| NNPA | 1.29% | Up from 1.15% in Q4 FY26 |
| 30+ DPD | 6.87% | Up from 6.21% in Q4 FY26; improved ~20 bps in July with corrective collection actions underway |
| Collection Efficiency | 98.52% | HFC ~99.5%, NBFC ~97.5%; June-end commitment timing issues in NBFC portfolio, improving in July |
| Credit Cost | ~0.6% | Within FY27 guidance of 0.5% ± 10 bps; HFC at 0.2%, NBFC at ~1.4% |
| Net Total Income | ₹441 crores | Grew 19% YoY, supported by business growth and operating leverage |
| Net Profit | ₹261 crores | Up 19% YoY, translating to ROA of 7.8% and ROE of 20.4% |
| Spread | 9% | Stable sequentially; yield moderation fully offset by lower cost of funds at 8% |
| Cost of Funds | 8% | Declined, driven by prudent liability management |
| NIM | ~12.5%-13% | Management expects NIM to remain protected with stable leverage |
| Operating Expense/AUM | 2.7% | Within guided range of 2.6%-2.8% despite branch expansion investments |
| Total Liquidity | ₹1,933 crores | Includes ₹1,257 crores unavailed bank sanctions, providing growth headroom |
| Borrowings Raised (Q1) | ~₹872 crores | Mix of term loans, securitization, and direct assignment |
| Liability Mix | Banks 60%, NHB 14%, Securitization 18% | Well-diversified; NHB share lower due to uncompetitive pricing |
| Effective Tax Rate | ~20% | Lower than ~23% historical due to tax benefits from aggressive write-off policy |
Geographic & Segment Commentary
- Housing Finance (HFC) Business: Housing loans comprise 67% of HFC book; credit cost at 0.2% and collection efficiency at ~99.5%, comparing favorably with HFC peers. HFC loan book grew 20% YoY in Q1 FY27, with management prioritizing growth in this segment.
- NBFC Business: Loan book grew 24% YoY; credit cost at ~1.4% comparable to NBFC peers; collection efficiency ~97.5% impacted by June-end collection timing issues. Management emphasized NBFC asset quality data should be benchmarked against NBFC peers, not HFCs.
- Branch Expansion & Geographic Reach: 33 branches added in Q1 FY27 (total 372); expanding into new geographies including Odisha and Maharashtra (combined loan book ~₹162 crores) with a contiguous expansion strategy targeting less competitive markets.
Company-Specific & Strategic Commentary
- Branch Expansion: Added 33 branches in Q1 against FY27 target of 60-70; 20-23 more planned in Q2 and the remainder in Q3, with rent costs to be reflected from Q2 onwards.
- Customer Acquisition — Connector Network: Connector channel contributed 8% of disbursements in Q1; ~1,000 connectors deployed across 333 branches (3-4 per branch) to diversify sourcing and reduce dependence on field staff.
- Average Ticket Size Increase: Ticket size increased by at least ₹1 lakh YoY through calibrated customer selection, onboarding higher-quality customers while maintaining business momentum.
- Pricing Strategy: Calibrated reduction in lending rates on select housing loan ticket sizes to support customer acquisition; yield moderation fully offset by lower cost of funds.
- Product Expansion: Evaluating new lending products beyond home loans and SME loans, to be housed in NBFC; leveraging 200,000+ existing customer base for cross-selling; more details expected in Q2 call.
- Separate HFC/NBFC Disclosures: From September 2026, investor presentations will provide separate financial data for HFC and NBFC businesses for more meaningful peer comparison.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| AUM Growth | 22%-24% for FY27 | Anchored by branch expansion, ticket size increase, connector channel traction, and optimized pricing |
| Disbursement Growth | 25%-30% YoY in Q2 FY27 | Based on July '26 disbursements up 25% YoY; lower base impact from INR7 lakh product exit reducing |
| Branch Network | 60-70 additions in FY27 | 33 added in Q1; 20-23 more in Q2, remainder in Q3 |
| Spread | ~9% | Stable; protected by cost of funds decline to 8% |
| NIM | 12.5%-13% | Stable leverage expected to maintain margins |
| Operating Expense/AUM | 2.6%-2.8% | Continued frugal cost management despite branch and IT investments |
| Credit Cost | 0.5% ± 10 bps for FY27 | HFC at ~0.2%, NBFC higher; collection normalization expected to improve |
| ROE | Above 20% | Consistent with FY27 profitability guidance |
| Assignment Income Margin | Normalizing to 12%-15% | Down from current ~23% run rate |
Risks & Constraints
| Risk | Context |
|---|---|
| NBFC Collection Disruption | June-end collection commitments not honored in NBFC portfolio drove 30+ DPD to 6.87% and collection efficiency down to 98.52%; management attributes to timing rather than customer quality deterioration, with July improvement of ~20 bps in 30+ DPD; slippage risk if normalization does not sustain |
| Repo Rate Sensitivity | 66% of borrowings are variable; 35% linked to repo rate and 31% to MCLR; a repo rate increase would have a modest ~0.06% NIM impact per 100 bps |
| Field Staff Attrition | Attrition at field level at 40%-45% (down from 50%-60%); competitors opening branches poach field officers, driving need for alternate sourcing channels and retention incentives |
| NHB Refinance Cost | NHB offering ~8.2%-8.3% vs market rates of 7.8%-7.9% for HFC borrowings; NHB share of funding declining unless pricing becomes competitive |
| Credit Cost Sustainability | Consolidated credit cost of 0.6% depends on NBFC collections normalizing; write-off policy (500+ DPD) provides tax benefits but aggressive write-offs could pressure future provisions if asset quality weakens |
Q&A Highlights
FY27 Growth Drivers and Disbursement Momentum
- Question: What are the drivers behind the impressive 36% disbursement growth and how will it sustain over the next quarters? (Nischint Chawathe, Kotak Institutional Equities)
- Answer: Growth anchored by branch expansion, ticket size increase of at least ₹1 lakh, connector channel traction (8% of Q1 disbursements), and optimized lending rates on select housing loan ticket sizes. July disbursements up 25% YoY, providing confidence for the FY27 AUM growth guidance of 22%-24%. (Balaji P.)
NBFC Asset Quality and Collection Efficiency
- Question: What drove the NBFC collection weakness in Q1, and is there any lumpiness in specific regions or customer cohorts? (Umang Shah, Kotak Mutual Fund; Rajiv Mehta, YES Securities)
- Answer: June-end commitment timing issue in NBFC where certain commitments were not honored; no problem with underlying customer quality. HFC collection efficiency at ~99.5% and NBFC at ~97.5%; July saw 30+ DPD improve ~15-20 bps as pending dues were honored. Credit cost range of 0.5% ± 10 bps maintained for the year. (Balaji P.; M. Anandan)
Funding Strategy — NHB vs Banks and Securitization
- Question: Why is NHB share at its lowest level in many quarters, and what is the cost of unavailed bank sanctions? (Rajiv Mehta, YES Securities)
- Answer: NHB refinance facility of ₹500 crores applied for but expected cost of 8.2%-8.3% vs market rates of 7.8%-7.9% for HFC borrowings through banks/securitization; NHB will be used only if pricing becomes competitive. Unavailed bank sanction rates: HFC 7.9%-8.1%, NBFC 8.1%-8.25%. (Balaji P.)
New Product Expansion Rationale
- Question: Why enter new lending segments when the affordable housing addressable market remains large? (Amit Khetan, Laburnum Capital)
- Answer: Scaling from ₹15,000 to ₹25,000+ crores in AUM requires product diversification beyond distribution expansion. With 200,000+ existing customers currently availing financial products from other vendors, the NBFC offers cross-selling opportunity. New products will be housed in NBFC to maintain NHB principal business criteria in HFC; more details expected in Q2 call. (M. Anandan; Balaji P.)
Effective Tax Rate and Write-Off Policy
- Question: Why is the effective tax rate at ~20% versus ~23% previously, and is this sustainable? (Raghav Garg, AMBIT Capital)
- Answer: Lower tax rate due to tax benefits from aggressive write-off policy (accounts 500+ DPD as write-offs, which are tax-deductible); policy will continue. Credit cost driven largely by write-offs rather than provisions. (Balaji P.; M. Anandan)
Balance Sheet Strength and Financial Risk Management
- Question: What key financial risks are anticipated in coming quarters, and what measures protect margins, liquidity, and balance sheet? (Sucrit D. Patil, Eyesight Fintrade)
- Answer: Spread protected at 9% through effective borrowing; NIM expected at 12.5%-13%; OpEx managed at 2.7% despite branch expansion; credit cost expected at 0.5%-0.6%. Low leverage allows negotiating lender terms rather than accepting bank offers; liquidity maintained for 2-3 months. Repo rate increase impact limited to ~0.06% on NIM. (Sanjay Mittal; Balaji P.)
Credit Cost Guidance, Write-Off Policy, and Stage 1 Provision Coverage
- Question: Is the write-off policy being accelerated, and how should we view the decline in Stage 1 provision coverage from ~40 bps to ~24 bps? (Rajiv Mehta, YES Securities)
- Answer: Write-off policy for 500+ DPD accounts is ongoing and will continue. Stage 1 provision coverage reduced due to better customer repayment behavior as per ECL model; Stage 2 coverage increased commensurately given the rise in Stage 2 assets. Credit cost guidance of ~0.6% maintained. (Balaji P.)
Product Mix and NHB Principal Business Criteria Compliance
- Question: How will product expansion impact the HFC/NBFC mix and profitability metrics? (Renish Patel, ICICI Securities)
- Answer: HFC mix of 67% housing loans will be maintained to meet principal business criteria; all new product expansion will be executed through NBFC. No impact on ROA/ROE expected; new products could potentially enhance profitability. (Balaji P.)
Key Takeaway
Aptus Value Housing Finance delivered a strong Q1 FY27 with AUM growing 21% YoY to ₹13,648 crores on the back of 36% disbursement growth, while maintaining ROE of 20.4% and ROA of 7.8%, with net profit up 19% YoY to ₹261 crores. Spread remained stable at 9% as cost of funds declined to 8%, fully offsetting yield moderation from pricing rationalization on select ticket sizes. Asset quality softened modestly — GNPA at 1.7% and 30+ DPD at 6.87% — driven by June-end collection timing issues in the NBFC portfolio, which management attributes to a temporary hitch already correcting through July. FY27 guidance is reaffirmed across AUM growth (22%-24%), credit cost (0.5% ± 10 bps), OpEx-to-AUM (2.6%-2.8%), and ROE above 20%, anchored by branch expansion (33 of 60-70 target branches already added), ticket size increases, and connector channel traction. Strategic focus centers on product diversification in the NBFC to leverage a 200,000+ customer base, supported by separate HFC/NBFC disclosures from September 2026. Key watch points include NBFC collection normalization, funding cost dynamics (NHB at 8.2%-8.3% vs market 7.8%-7.9%), and field-level attrition at 40%-45%.