This article first appeared on GuruFocus .
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AUM:INR28,790 crore, 20% year-on-year growth.
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Disbursement for 9 months FY26:INR6,469 crore, 15% Y-o-Y increase.
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PAT:INR797 crore, 20% growth Y-o-Y.
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Gross NPA:1.38%, a sequential improvement of 4 bps.
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Collection Efficiency:Above 99% during the third quarter.
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Average Ticket Size:INR10.7 lakhs.
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Loan-to-Value Ratio:60%.
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Branch Network:621 branches across 22 states and 552 districts.
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Borrowings:INR17,500 crore, 16% growth Y-o-Y.
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Incremental Borrowing Cost:7.5% for Q3 FY26.
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Liquidity:INR1,435 crore at the end of Q3 FY26.
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Portfolio Yield Exit:13.71% at the end of Q3 FY26.
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Cost-to-Income Ratio:35.4% for 9 months FY26, improved by 50 bps Y-o-Y.
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Capital Adequacy Ratio:43.6% for Tier 1.
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ROA:4.4% for 9 months FY26.
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ROE:15.6% for 9 months FY26.
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Release Date: January 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Aadhar Housing Finance Ltd ( NSE:AADHARHFC ) reported a 20% year-on-year growth in Assets Under Management (AUM), reaching INR28,790 crore as of December 31, 2025.
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The company achieved a 15% year-on-year increase in disbursements for the first nine months of FY26, totaling INR6,469 crore.
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Profit After Tax (PAT) grew by 20% year-on-year, reaching INR797 crore, indicating strong lending momentum.
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Gross Non-Performing Assets (NPA) improved sequentially by 4 basis points to 1.38%, with collection efficiency remaining above 99%.
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Aadhar Housing Finance Ltd expanded its branch network by adding 10 new branches, bringing the total to 621 branches across 22 states, enhancing its geographic diversification.
Negative Points
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The company's incremental borrowing cost for Q3 FY26 stood at 7.5%, which may impact future profitability if borrowing costs rise.
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Despite improvements, the Gross NPA ratio remains at 1.38%, indicating room for further improvement in asset quality.
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The cost-to-income ratio for the first nine months of FY26 was 35.4%, only a slight improvement from the previous year's 35.9%.
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The impact of the new labor code resulted in an exceptional item cost of INR16 crore, affecting the financial results.
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The company faces competition in the affordable housing segment, which could pressure margins and growth if not managed effectively.
Q & A Highlights
Q: Congrats for strong set of numbers. Sir, you have delivered very strong growth in the disbursement ahead of your peers. What gives you confidence in sustaining it in the fourth quarter and FY27? A: Thank you, Abhishek. Our confidence comes from our current numbers, which are upward of what we delivered in December. We foresee that quarter four is protected, and our guidance numbers are secure. Our core competence is our branch network, which we are expanding. We plan to add 40 to 50 branches annually, which supports our growth commitments.
Q: Can we expect 20% disbursement growth in the next quarter onwards? A: For the current financial year, AUM should be upward of 20%, and disbursement will be around 16% to 17%. We aim to maintain similar trends next year, which gives us confidence in our growth projections.
Q: Stage 2 assets have shown improvement. Was this improvement broad-based or driven by specific geographies? A: The improvement in Stage 2 assets is broad-based and not linked to any specific geography. We have seen consistent improvement by 20 bps over the last two quarters, which is a positive sign for maintaining portfolio health and preventing slippages into Stage 3.
Q: On the PMAY 2.0 incentives, can you provide updates on approval timelines and disbursement linkage? Are there any additional policy incentives expected in the upcoming budget? A: We are leading in PMAY 2.0, with over 10,000 customers availing subsidies. The process starts post-loan disbursement, with a turnaround time of 2 to 3 working days. We expect a redefinition of "affordable" in terms of ticket size in the upcoming budget.
Q: Credit costs for the quarter have slightly increased. What is your guidance for credit costs for the full year FY26, and where do you see GNPA levels settling by year-end? A: Credit cost for Q3 FY26 is 0.28%. We expect improvement in NPA numbers in Q4, potentially ending the year with GNPA levels between 1.1% and 1.15%. Our credit cost guidance remains within 25 bps for the year.
Q: The disbursement growth has been robust. Are there specific states contributing to this growth, and do you expect stable margins going forward? A: All states have contributed equally to disbursement growth, except Punjab, which is recovering from floods. We are confident in maintaining stable margins as we progress into Q4.
Q: What are your plans for geographic expansion and branch network growth? A: We are present in 22 states and plan to add 40 to 50 branches annually within these states. Our strategy focuses on deeper impact locations, with 30 branches in lower categories and 20 in urban areas.
Q: How is the non-home loan book performing, and are there any signs of stress? A: The non-home loan book has grown by 25% Y-o-Y, with a 65 to 70 bps differential in NPA compared to home loans. Risk-adjusted yields are 300 bps higher, and we have seen a 20 bps improvement in behavior over the last few quarters.
Q: Is there any change in repayment behavior or prepayment trends? A: Our AUM runoff for 9 months FY26 is 16.8%, slightly lower than 17.5% in FY25. We are not seeing significant changes in repayment behavior, and the portfolio runoff remains robust.
Q: What is your perspective on competition in the housing finance sector? A: In the low-income segment, where we operate, competition is less intense. Our extensive branch network, especially in emerging locations, helps mitigate competitive pressures.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
