AAVAS Financiers Q1 FY27 Results (NSE: AAVAS)
Signal: Earnings grew
The read
Aavas delivered a strong quarter with broad-based momentum: AUM growth accelerated to 15.4% YoY, NII grew 18.2%, and NIM expanded 22 bps to 7.70% aided by efficient cost of borrowing. Cost-to-income improved 254 bps to 43.7%, reflecting operating leverage. Asset quality improved further with 1+ DPD at 3.76% (down 39 bps) and credit costs at 24 bps. Disbursements surged 41% YoY, indicating strong demand. The quarter marks a visible inflection in execution quality and profitability.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹413.9 Cr | 16.8% | N/A |
| Net profit | ₹171.3 Cr | 23.0% | |
| EBIT margin | 0% |
P&L walk
Revenue (Net Total Income) grew 16.8% YoY to ₹4,139 mn, driven by 18.2% NII growth and supported by 15.4% AUM expansion. Cost-to-income improved sharply by 254 bps to 43.7% on operating leverage. Net profit grew 23% YoY to ₹1,713 mn, outpacing revenue growth due to margin expansion and controlled credit costs (24 bps).
Key positives
- AUM grew 15.4% YoY to ₹239.3 bn, with monthly AUM addition improving ~50% YoY.
- NII grew 18.2% YoY to ₹3,383 mn, supported by NIM expansion of 22 bps to 7.70%.
- Cost-to-income improved 254 bps YoY to 43.7%, driving operating leverage.
- Asset quality improved: 1+ DPD down 39 bps to 3.76%, GNPA 1.11%, NNPA 0.71%.
- Disbursements grew 41% YoY to ₹16.1 bn, indicating strong loan demand.
- ROA improved 25 bps to 3.19% and ROE improved 78 bps to 13.34%.
Key concerns
- Spread moderated 5 bps YoY to 5.06% due to a 10 bps PLR reduction while borrowing costs remained stable.
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