Aadhar Housing Finance FY26: Scaling past INR 30,000 crore AUM with steady asset quality

Aadhar Housing Finance ended FY26 on a strong footing, with management positioning the year as a milestone year for scale. The company reported Assets Under Management of INR 305,713 million as of March 31, 2026, which is about INR 30,571 crore, up 20% year-on-year. Disbursements for FY26 were INR 95,557 million, about INR 9,556 crore, up 17% year-on-year.

Profitability remained healthy. The investor presentation reports Profit After Tax of INR 11,083 million for FY26, up 22% year-on-year, excluding an exceptional impact related to a new labour code. In the consolidated profit and loss statement, FY26 PAT is shown at INR 10,958.8 million, while PAT without the exceptional item is INR 11,082.9 million.

Scale built on a secured retail book

Aadhar operates as a housing finance company focused on low-income housing, with management emphasizing an average ticket size around INR 1.1 million and a fully secured retail loan book. As of March 2026, the portfolio is split between Retail Home Loans and Retail Other Mortgage Loans.

AUM by product continued to expand across both categories. Retail Home Loans grew to INR 222,049 million by FY26, while Retail Other Mortgage Loans rose to INR 83,664 million. On the earnings call, management described the book mix as 73% home loans and 27% loan against property, and noted that growth in loan against property was deliberately moderated in recent quarters.

Margins, funding and operating efficiency

Aadhar highlighted stable spreads through the cycle, with FY26 spread shown at 5.8%, up 13 bps year-on-year. The presentation shows portfolio yield at 13.5% in FY26 and cost of borrowings at 7.7%.

On the earnings call, the CFO described the focus as protecting spreads rather than optimizing yield in isolation, especially given interest rate uncertainty. Management also clarified that a 15 bps PLR reduction was implemented from February 2026 as part of its rate pass-through framework.

Funding diversification remains a key theme. As of March 31, 2026, consolidated borrowings were INR 187,438 million. Management stated the borrowing mix at year-end was 51% from banks, 22% from NHB, 19% from NCDs, 5% from ECB, and 4% from others. The presentation also highlights 42 borrowing relationships and a CARE rating upgrade to AA plus stable, alongside positive ALM across maturity buckets.

Operational efficiency continued to improve. Cost-to-income reduced to 35.9% in FY26 from 36.4% in FY25. Management attributed this to productivity improvements and indicated another 50 bps improvement is being targeted in the next financial year.

Asset quality steady, with analytics-led collections focus

Asset quality remained stable. GNPA to AUM was 1.08% in FY26 compared to 1.05% in FY25, while NNPA stayed at 0.8% in FY26. On the call, the CEO stated that collection efficiency remained above 99.8% and that early bucket delinquency and Stage 2 assets improved sequentially.

The ECL disclosures provide additional granularity. As of March 31, 2026, Stage 1 accounted for 95.9% of the portfolio, Stage 2 for 3.0%, and Stage 3 DPD greater than 90 days for 1.06%. Total ECL provision percentage was shown at 1.2%.

Technology and data as operating leverage

Aadhar’s presentation positions technology as a core enabler, not an add-on. The company disclosed a digital-first operating model with a TCS-enabled core system, stating 25 to 35 minutes door-to-login time, 100% paperless onboarding, 97% NACH conversion, and over 108,000 customer app logins.

The company also outlined a broad data science and AI or ML roadmap across underwriting, collections, branch opening, and risk-based pricing. Management said it is increasingly using analytics for sourcing, underwriting, and collections, and is seeing early benefits in productivity and decision-making.

What management is guiding for next

The most explicit takeaway from the earnings call was management reiterating forward growth targets. The CEO stated the company would continue with similar guidance of 20% AUM growth, 20% profit growth, and 17% to 18% disbursement growth.

Management also pointed to selective levers to protect spreads, including calibrated adjustments to the loan against property share and an emphasis on emerging markets. At the same time, the commentary acknowledged ongoing competition in urban markets where banks remain active, and the need to stay cautious on risk.

Aadhar’s FY26 narrative, as presented, is one of disciplined scale-up. The company combined strong growth with stable asset quality and improving operating efficiency, while investing in technology and analytics. If management delivers on its stated growth guidance while sustaining spreads and credit discipline, FY27 becomes a test of repeatability rather than a one-off performance year.