AAVAS Financiers records nearly 8% YoY growth in Q4 PAT; AUM at Rs 20,420 crore

Operating expenses rose by 19.1% YoY to Rs 169.30 crore in the fourth quarter. Interest costs added up to Rs 267.32 crore (up 20% YoY) in the quarter ended on 31 March 2025.

Impairment on financial instruments aggregated to Rs 7.64 crore in Q4 FY25, up 77% YoY.

Profit before tax in Q4 FY25 stood at Rs 193.22 crore, up by 8.9% from Rs 177.49 crore in Q4 FY24.

For the financial year ended 31 March 2025, AAVAS Financiers' profit after tax increased by 17% to Rs 574.11 crore from Rs 490.69 crore in FY24. Total income increased by 16.7% YoY to Rs 2,358.42 crore in FY25.

Disbursements during Q4 FY25 grew by 27% QoQ to Rs 2,020 crore whereas in FY25, disbursement grew by 10% YoY to Rs 6,123 crore.

Assets under Management (AuM) of the company has crossed milestone of Rs 20,000 crore this year. In FY25, AUM grew by 18% YoY at Rs. 20,420 crore.

Opex to assets ratio saw considerable improvement of 26 basis points YoY in FY25 at 3.32% as a result of the company's cost optimisation strategy.

The company's spread during the quarter moderated by 5 basis points sequentially to 4.89% on account of softening of AUM yield by 5 basis points to 13.13% while the cost of borrowings remained unchanged at 8.24%.

Net interest margin (NIM) in absolute terms has increased by 14% YoY in Q4 FY25 and 10% YoY in FY25. NIM as a percentage of total assets during Q4 FY25 stood at 8.11%, and at 7.64% during FY25.

'Our asset quality continues to be pristine, within the guided range with 1 day past due well below 5% at 3.39% in Q4 FY25 and Gross Stage 3 & Net Stage 3 under 1.25% stood at 1.08% and 0.73% respectively. Credit cost during Q4FY25 was 17 bps and 15 bps for FY25,' the company stated.

In terms of the borrowing mix, 51% of our borrowings are from Term Loans, 25% is from Assignment, 14% from NHB Refinancing; 10% is from debt capital market (of which 83% is from development finance institutions like IFC, CDC & ADB).

The company's net worth grew by 16% YoY to Rs. 4,361 crore as on 31 March 2025. ROA was stable at 3.27% and ROE improved by 18 basis points YoY to 14.12% in FY25.

The total number of branches stands at 397 as on 31 March 2025, with 30 additions in FY25.

Sachinder Bhinder, managing director & chief executive officer, said: 'At Aavas, our steadfast commitment remains focused on empowering unserved, underserved, and underbanked customers in Tier 2 to Tier 4 markets by providing customized financial solutions that cater to their unique aspirations.

Following the successful completion of the technological transformation during the year, we have already begun to observe tangible benefits. As of March 2025, the TAT from login to sanction has been reduced to just 7 days, a substantial improvement from the previous peak of 13 days. Additionally, the initiative has resulted in significant cost and time savings, contributing to enhanced productivity and operational efficiency across the organization.

The launch of the PMAY 2.0 scheme, including the interest subsidy scheme for urban housing, will be pivotal in improving loan accessibility for economically weaker sections and low-income groups, empowering countless individuals to realize their dreams of homeownership.

It aligns with Aavas's mission and vision, enhancing our dedication to delivering innovative housing solutions for underserved communities.

Aavas Financiers is a retail, affordable housing finance company, primarily serving low- and middle-income self-employed customers in semi-urban and rural areas in India. The company's product offering consists of home loans for the purchase or construction of residential properties, and for the extension and repair of existing housing units, loan against property and MSME loans.

The scrip declined 3.53% to currently trade at Rs 2022.25 on the BSE.

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