Aptus Value Housing Finance India Ltd Q1 FY27 Earnings Call: ROE Crosses 20% Guided Threshold, Guides 25-30% Disbursement Growth

Aptus Value Housing Finance India Ltd held its Q1 FY27 earnings call on July 31, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Financial Metrics

• AUM of Rs.13,648 crores — up 21% YoY in Q1 FY 2026-2027, with broad-based disbursements across geographies and channels.
• Disbursements of Rs.1,053 crores — grew 36% YoY in Q1 FY 2026-2027, driven by branch expansion, a ~Rs.1 lakh increase in average ticket size, and the connector channel.
• Profit After Tax of Rs.261 crores — up 19% YoY in Q1 FY 2026-2027, translating to ROA of 7.8% and ROE of 20.4% (above the guided 20% threshold).
• Net Interest Margin of Rs.441 crores — grew 19% YoY in Q1 FY 2026-2027, with gross spread stable at 9% and cost of funds declining to 8%.
• Operating expenses to AUM at 2.7% — within the guided range of 2.6%-2.8% for FY 2026-2027, despite 33 new branches opened in the quarter.
• Consolidated credit cost of 0.6% (60 bps) — within the guided range of 0.5% ±10 bps for FY 2026-2027, with HFC credit cost at 0.24% and NBFC credit cost at 1.4%.

Credit Metrics, NPA & Collection Efficiency

• GNPA at 1.7% — up from 1.52% in Q4 FY 2025-2026 and 1.49% in June 2025, largely driven by NBFC portfolio; NNPA at 1.29% (vs 1.15% in Q4 FY 2025-2026).
• 30+ DPD at 6.87% — increased from 6.21% in Q4 FY 2025-2026, but improved by ~20 bps in July 2026 as delinquent payments were honored.
• Collection efficiency: HFC ~99.5%, NBFC ~97.5% — consolidated at ~98.5% in Q1 FY 2026-2027; management attributed the NBFC dip to a month-end seasonal effect, not customer quality deterioration.
• NBFC collection efficiency restored to ~98.5%-99% in July 2026 — management does not expect further flow-forward from the NBFC portfolio in July/August FY 2026-2027.
• Stage 1 provision coverage reduced to 24 bps — down from ~40 bps 6-7 quarters ago, reflecting improved customer repayment behavior under the ECL model; Stage 2 coverage was increased.
• Write-off policy: any account overdue >530 days — will be written off, contributing to the lower effective tax rate.
• Management declined to provide a detailed slippage breakdown — directing analysts to contact investor relations; Stage 2 loans rose from 6.21% (Q4 FY 2025-2026) to 6.87% (Q1 FY 2026-2027).

Disbursement Momentum & Distribution Network

• Disbursement growth of 36% YoY in Q1 FY 2026-2027 — driven by branch expansion, ~Rs.1 lakh average ticket size increase, the connector channel (8% of disbursements), and optimized lending rates.
• July 2026 disbursements grew 25% YoY — maintaining momentum despite the discontinuation of loans below Rs.7 lakh from July 2025; management guided 25%-30% YoY disbursement growth in Q2 FY 2026-2027.
• Branch network expanded to 370 — with 33 new branches opened in Q1 FY 2026-2027 against a full-year target of 60-70; 20-23 expected in Q2 and the remainder in Q3.
• HFC loan book grew 20% in Q1 FY 2026-2027 — NBFC loan book grew 24% in the same period, with quasi-home loans (LAP) growing faster than pure home loans due to a lower base effect.
• Connector channel contributed 8% of disbursements — ~1,000 connectors across 333 branches (average 3-4 per branch), serving as a key alternative distribution channel.
• Maharashtra and Odisha loan book at ~Rs.162 crores — representing 1.2% of total advances in Q1 FY 2026-2027, indicating room for geographic diversification.

New Product Evaluation, HFC/NBFC Mix & Distribution

• Management is evaluating a new lending product — beyond home loans and SME loans, aimed at the next growth phase (from Rs.15,000 Cr to Rs.25,000 Cr or Rs.35,000 Cr to Rs.50,000-60,000 Cr AUM); specifics will be disclosed in the Q2 FY 2026-2027 earnings call.
• New product to leverage existing 200,000+ NBFC customer base — designed as a value-added offering to supplement current distribution channels, with no expected impact on ROA or ROE.
• HFC product mix: 57% housing, 43% non-housing — management confirmed the mix will continue to meet NHB principal business criteria; new products will be launched through the NBFC.
• Field staff turnover reduced to 40-45% — down from 50-60% previously, still elevated; management is addressing through incentive plans and alternative channel expansion.
• Senior management turnover stable — middle management at ~5-6%, branch managers at ~10-15%; the connector channel is being scaled partly to reduce dependence on high-turnover field staff.

Spread, NIM, Operating Cost & Borrowing Mix

• Gross spread stable at 9% — NIM guided in the 12.5%-13% range for FY 2026-2027, supported by a declining cost of funds (8% in Q1 FY 2026-2027).
• Operating cost ratio targeted at 2.7%-2.8% — past consistency near 2.7%; IT investment continues but cost discipline remains a priority despite 33 new branches in Q1.
• Effective tax rate at ~20% for Q1 FY 2026-2027 — down from ~23% previously, driven by tax benefits from write-off policies; management expects this to continue for FY 2026-2027.
• Funding raised of Rs.872 crores in Q1 FY 2026-2027 — liability mix: banks 50%, NCDs 14%, securitization 18%, NHB balance; total liquidity of Rs.1,933 crores (including Rs.1,257 crores unavailed bank sanctions).
• Borrowing mix: 66% variable, 34% fixed — variable portion comprises 35% repo-linked and 31% MCLR-linked; a repo rate increase would have an impact of only 0.06% on NIMs.
• NHB refinance of Rs.500 crores applied for — management cited "NHB's indicated cost of 8.2%-8.3% is higher than alternative sources" and will only draw if competitive; bank borrowings, securitization, and NCDs are available at 7.8%-7.9% for HFC.

Guidance, Pipeline & Key Risks

• AUM growth guidance of 22%-24% reaffirmed for FY 2026-2027 — supported by branch expansion, new product launches, and continued demand in affordable housing; competition is seen as manageable.
• Consolidated credit cost guidance of 0.5% ±10 bps — for the remaining three quarters of FY 2026-2027; management reiterated the full-year credit cost guidance of 0.6%.
• 60-70 branch additions planned for FY 2026-2027 — 33 opened in Q1, 20-23 expected in Q2, remainder in Q3; growth guidance is supported by this expansion.
• Assignment income as% of off-book AUM expected to settle at ~12-15% — down from ~23% currently and a high of ~40% (period unspecified).
• Separate HFC and NBFC financial data from September 2026 — management will provide disaggregated data in the investor presentation for more meaningful comparison.
• Key risks: potential repo rate hikes and collection efficiency — management noted a repo rate increase would have a modest 0.06% impact on NIMs; collection efficiency is being actively monitored, with the June NBFC dip characterized as a one-off seasonal effect.