Affordable housing financier Aavas Financiers delivered robust financial results for the June quarter, with standalone net profit rising 23.01% year-on-year to ₹171.27 crore compared to ₹139.23 crore in the previous year. According to latest reports from Business Standard, the growth was supported by an 16.6% increase in net interest income, indicating stronger core lending income during the quarter. The company's net interest margin improved 22 basis points year-on-year to 7.70%, while the cost-to-income ratio improved by 254 basis points to 43.7%. Latest data shows Net Interest Income rose 18.2% year-on-year to ₹338.30 crore, with absolute Net Interest Margin standing at ₹413.90 crore. As per ICICI Securities research report dated July 22, 2026, the company achieved its highest first-quarter disbursements at ₹16.1 billion (up 41% YoY).
Asset quality metrics showed continued improvement across key parameters. As reported by CNBC TV18, the 1+ days past due ratio improved by 39 basis points year-on-year to 3.76%, while gross non-performing assets declined 11 basis points to 1.11%. Net non-performing assets improved 13 basis points to 0.71%, with the company attributing these outcomes to its risk architecture and underwriting framework. The return on assets stood at 3.19%, improving by 25 basis points year-on-year, while return on equity increased 78 basis points to 13.34%. Latest data confirms the Provision Coverage Ratio (PCR) stood strong at 66.99%, with credit costs for the quarter well-contained at 24 basis points, remaining flat year-on-year despite geopolitical challenges. As per ICICI Securities, the company maintained credit cost at 24 basis points YoY during Q1FY27.
The company demonstrated strong business expansion during the quarter. According to CNBC TV18, loan disbursements surged 41%, while assets under management crossed ₹23,900 crore. The firm expanded its branch network to 440 locations during the quarter, strengthening its presence in semi-urban and rural areas across India. As a retail affordable housing finance company, Aavas Financiers primarily serves low- and middle-income self-employed customers in these markets. Latest data shows disbursements reached ₹1,610 crore during the quarter, delivering sharp growth of 41% year-on-year, with active loan accounts increasing by 10% year-on-year to reach 2,75,869. The company's AUM grew by 15.4% year-on-year to ₹239.3 billion as of June 30, 2026. As per ICICI Securities, the company achieved 10 basis points YoY contraction in opex-to-assets during Q1FY27.
Commenting on the results, Manu Singh, Chief Executive Officer, highlighted the company's strategic progress. As reported by CNBC TV18, Singh stated that the quarter reflects the early benefits of focused execution strategy, stronger field-level accountability, and continued emphasis on customer acquisition. He added that the momentum witnessed during the quarter strengthens confidence in strategic initiatives and provides a solid foundation for the rest of the year. Singh noted that the company's NIMs expanded by 22 basis points YoY to 7.70% during the quarter, supported by improvement in cost of borrowing coupled with continued focus on risk-adjusted pricing. The company underwent internal restructuring during Q1FY27 with the resignations of Mr. Ghanshyam Rawat (CFO) and Mr. Ashutosh Atre (CRO). As per ICICI Securities, FY26 was marked by leadership transitions, including CVC Capital Partners' entry as a promoter and the appointments of Mr. Manu Singh as MD & CEO and Mr. Ripudaman Bandral as CBO.
ICICI Securities has issued a buy rating on Aavas Financiers with a revised target price of ₹1,750 (earlier ₹1,725), valuing the stock at 2.1x Mar'28E P/BV. The brokerage expects the company to achieve ~18%+ AUM growth and mid-teen RoE going forward. As per ICICI Securities, the company is well positioned to achieve 20%+ medium-term AUM growth through its ongoing franchise expansion into India's southern markets and deeper penetration in Gujarat, Maharashtra, and UP. The research report dated July 22, 2026, notes that with most of the challenging events behind and a strong start to FY27, Aavas is positioned for sustained growth. Prabhudas Lilladher had previously recommended an Accumulate rating with a target price of ₹1,675, expecting 22% disbursement growth and 18% AUM growth for FY27.
