Summary
Aadhar Housing Finance Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026, 6:00 PM IST
Event Participants
Executives 4 Deo Shankar Tripathi (Executive Vice Chairman), Rishi Anand (MD and CEO), Rajesh Viswanathan (CFO), Sanjay Moolchandani (Head, Investor Relations)
Analysts 5 Abhishek Kumar Jain (AlfAccurate), Arun (JM Financial), Chintan Shah (ICICI Securities), Maulik Chaudhari (Monarch Networth Capital), Prithviraj Patil (Investec), Siraj Khan (Ascendancy Capital), Sonal (Asian Market Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Assets Under Management (AUM) | ₹28,790 crores | +20% YoY; On track to exceed ₹30,000 crores by fiscal year-end. |
| Disbursements (9M FY26) | ₹6,469 crores | +15% YoY; Reflects steady lending momentum in core segments. |
| Net Profit (PAT) | ₹294 crores | +23% YoY for Q3 (excl. Labor Code impact); 9M PAT at ₹797 crores. |
| Gross NPA (GNPA) | 1.38% | -4 bps QoQ; Management targets 1.10% – 1.15% by year-end. |
| Net NPA (NNPA) | 1.00% | Compared to 0.90% in Q3 FY25. |
| Stage 2 Assets | % Not Disclosed | -20 bps QoQ improvement for two consecutive quarters. |
| Net Interest Margin / Spread | 5.97% | +4 bps QoQ; Aided by high incremental yields of 13.1%. |
| Cost of Funds (Exit) | 7.74% | Stable; Average incremental cost for 9M FY26 stood at 7.9%. |
| Cost-to-Income Ratio | 35.4% | -50 bps YoY improvement; Aligning with full-year efficiency guidance. |
| ROA / ROE | 4.4% / 15.6% | ROE reflects the impact of the ₹1,000 crore capital raise in May 2025. |
| CRAR (Tier 1) | 43.6% | Strong capital position supported by recent equity infusion. |
Geographic & Segment Commentary
- Geographic Distribution: The company maintains a diversified presence across 22 states and 552 districts with 621 branches. No single state contributes more than 15% to the total AUM, mitigating regional concentration risks.
- Salaried vs. Self-Employed: The salaried segment constitutes 55% of the AUM. Management continues to prioritize borrowers with stable, predictable income profiles to maintain asset quality.
- Housing vs. Non-Housing Loans: Home loans (HL) grew 14.5% QoQ, while non-housing loans (NHL) grew 9%. The 9M NHL growth was higher at 24% YoY, but management is intentionally capping NHL at 30% of AUM per regulatory guidelines.
Company-Specific & Strategic Commentary
- Branch Expansion: Aadhar added 10 branches in Q3, bringing the total to 621. The strategy involves adding 40-50 branches annually, with 30 focused on “deeper impact” (low-income) areas and 20 in urban/emerging locations.
- PMAY 2.0 Leadership: Over 10,000 customers have received the first tranche of interest subsidies under the renewed program. The scheme is expected to drive further demand in the EWS/LIG segments.
- Digital and Analytics: Deployment of TCS-enabled core systems and machine learning tools has reduced turnaround times and improved early warning signals for credit monitoring.
- Retention Focus: Annualized balance transfer (BT) outflows improved to 5.6% (vs. 6.1% YoY) due to data-driven customer engagement and a dedicated retention team.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| AUM Growth | 20% - 21% (FY26/FY27) | Driven by productivity gains (6%), inflation (6%), and new branch maturation (6%). |
| Asset Quality (GNPA) | 1.10% - 1.15% (Q4 FY26) | Expecting typical Q4 seasonal improvement in collections and recoveries. |
| Credit Cost | ~25 bps (FY26) | Maintained medium-term guidance despite minor Q3 fluctuations. |
| Branch Expansion | 40 - 50 per year | Calibrated expansion to deepen penetration in existing 22 states. |
| Spreads | ~5.8% (Exit FY26) | Expecting to end the year 10-11 bps higher than the start of the year despite rate cuts. |
Risks & Constraints
| Risk | Context |
|---|---|
| Interest Rate Transmission | Regulatory and moral requirements to pass on policy rate cuts. Management announced a 15 bps PLR cut effective Feb 2026, impacting 75% of the floating-rate book. |
| Segment-Specific Stress | Potential volatility in non-housing loans (NHL). Management has tightened credit filters and slowed NHL disbursement (9% QoQ) as a precautionary measure. |
| Labor Code Impact | Exceptional cost hit of ₹16 crores in Q3. While a one-time service cost, it impacted the reported bottom line for the quarter. |
Q&A Highlights
Asset Quality and Geography
- Question: Is the improvement in Stage 2 assets driven by specific geographies like Tamil Nadu? (Abhishek Kumar Jain)
- Answer: Improvement is broad-based; Tamil Nadu has actually shown 20-25% growth in disbursements and significant delinquency drops (Rishi Anand).
Yields and Rate Cuts
- Question: With the 125 bps repo rate cut, where does the yield trajectory go? (Siraj Khan)
- Answer: ALCO decided on a 15 bps PLR cut for February 2026. However, cost of funds may improve 3-4 bps in Q4, and we expect exit spreads to be 10-11 bps higher than March 2025 (Rajesh Viswanathan).
Competition
- Question: Are you seeing rising competition from larger peers in the low-income segment? (Maulik Chaudhari)
- Answer: Competitive intensity is lower in our core <₹15 lakh ticket-size segment and deeper impact locations compared to the ₹50 lakh+ urban affordable segment (Rishi Anand).
Disbursement Momentum
- Question: Why is disbursement growth stronger than peers? (Chintan Shah)
- Answer: January numbers are already trending above December. Confidence stems from our branch network and the fact that 450+ branches are in emerging locations with less competition (Rishi Anand).
Key Takeaway
Aadhar Housing Finance delivered a robust Q3 FY26, characterized by 20% YoY AUM growth and stable asset quality with GNPA improving to 1.38%. The company is successfully navigating a declining interest rate environment, maintaining healthy spreads of 5.97% while proactively announcing a 15 bps rate cut to customers. Strategically, Aadhar continues to leverage its deep distribution network of 621 branches, focusing on the under-penetrated low-income segment where competitive intensity remains manageable. Management is highly confident in surpassing the ₹30,000 crore AUM milestone by year-end, supported by strong PMAY 2.0 traction and operational efficiencies that have reduced the cost-to-income ratio to 35.4%. Looking forward, the company maintains its 20-21% growth guidance for FY27, backed by a disciplined expansion strategy and a resilient, 55% salaried borrower profile.
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