Jaipur-based affordable housing finance company Aavas Financiers delivered robust financial results for Q2 FY27, with net profit increasing 11% year-on-year to ₹182 crore compared to ₹164 crore in the corresponding quarter last year. According to the company's investor presentation, net profit slightly exceeded market expectations of ₹181 crore, with revenue from operations standing at ₹736 crore compared to ₹667 crore in the year-ago quarter. Net interest income (NII) grew 10.8% year-on-year to ₹431 crore in Q2FY27, driven by robust business growth and improved operating efficiencies. The company maintained strong asset quality with a gross NPA ratio of 1.11% and net NPA ratio of 0.70%, both showing year-on-year improvement.
For the first half of FY27, Aavas Financiers reported assets under management (AUM) of ₹24,801 crore, up 16.1% year-on-year as of September 30, 2026. As reported by the company's investor presentation, disbursements for H1FY27 increased 30% year-on-year to ₹3,506 crore, with Q2 disbursements at ₹1,891 crore. The company achieved a net interest margin (NIM) of 7.81% during Q2 FY27, supported by stable borrowing costs and risk-adjusted pricing. Pre-Provisioning Operating Profit (PPOP) grew 13.6% year-on-year, demonstrating operational leverage despite slight compression in yield or shift in asset mix. Cost-to-income ratio improved by 195 basis points year-on-year to 42.2%, driving operational efficiency.
The company demonstrated strong business growth with disbursements of ₹3,506 crore during H1FY27, registering 30% year-on-year growth. According to the company's investor presentation, Aavas Financiers expanded its network to 443 branches across 15 states and added more than 21,500 customers during the first half of FY27. CEO Manu Singh indicated that the company is on track to surpass the ₹250 billion AUM milestone this month, having served nearly 4.5 lakh customers. The company strengthened its funding franchise by adding two new large relationships, helping maintain spreads above 5% despite volatile interest rate environments. Management noted that the repayment rate normalized to around 17% and is expected to remain in a similar range.
The company's cost of borrowing stood at 7.64% while maintaining a spread above 5%. As reported by the company's investor presentation, NIM increased by 11 basis points quarter-on-quarter to 7.81% during Q2 FY27, supported by stable borrowing costs and risk-adjusted pricing. The 1+ days past due (DPD) ratio improved by 18 basis points year-on-year to 3.81% in Q2 FY27, with asset-quality indicators remaining within the company's guided range. Singh emphasized that quality of growth remains as important as its pace, with technology serving as a critical force multiplier for scaling operations. The company's average ticket size remained low at ₹10.4 lakh, reinforcing its focus on granular retail housing finance.
According to the company's investor presentation, Aavas Financiers shares closed 0.21% higher at ₹1,116.40 on the NSE on October 26, gaining ₹2.30 ahead of the earnings announcement. The company has outlined a long-term ambition of reaching ₹50,000 crore in AUM and expects to deliver more than 20% growth over the long term, with continued focus on branch expansion to strengthen and diversify its presence. The divergence between strong disbursement growth (30% YoY in H1FY27) and moderate NIM expansion highlights a strategy prioritizing volume and market penetration over immediate margin maximization.
