Aditya Birla Housing Finance lifts Q2 profit 73% as AUM rises 50%

Aditya Birla Housing Finance lifted profit before tax 73% year-on-year to Rs 335 crore in Q2 FY27 while assets under management, or AUM, reached Rs 57,373 crore, up 50%. Stage 2 and Stage 3 loans declined to 0.65% from 1.10% a year earlier, while the total capital adequacy ratio rose to 23.48%.

How fast did Housing Finance grow in Q2 FY27?

Housing Finance grew disbursements 55% year-on-year to Rs 8,957 crore in Q2 FY27 and expanded AUM by 50% to Rs 57,373 crore. Sequentially, disbursements were 19% above Rs 7,515 crore in Q1 FY27, while AUM was 11% above Rs 51,833 crore.

Disbursements increased from Rs 5,787 crore in Q2 FY26 to Rs 8,957 crore in Q2 FY27. Over the same period, AUM rose from Rs 38,270 crore to Rs 57,373 crore, while the number of unique customers increased from 1,08,400 to 1,59,700.

Net interest income, including fee income, increased 53% year-on-year to Rs 641 crore in Q2 FY27 and was 12% above Rs 572 crore in Q1 FY27. Profit before tax rose from Rs 194 crore in Q2 FY26 and Rs 300 crore in Q1 FY27 to Rs 335 crore.

Which lending segments contributed to Housing Finance AUM?

Housing Finance maintained a broadly stable AUM mix as its book reached Rs 57,373 crore in Q2 FY27. Prime home loans accounted for 25% of AUM, affordable home loans for 29%, prime loan against property for 20%, affordable loan against property for 10%, and construction finance for 15%.

Affordable home loans gained one percentage point of the mix from 28% in Q2 FY26 to 29% in Q2 FY27. Prime home loans declined by one percentage point from 26% to 25%, prime loan against property decreased from 21% to 20%, and affordable loan against property and construction finance remained at 10% and 15%, respectively.

Average ticket size on retail AUM was Rs 30 lakh in Q2 FY26, Q1 FY27 and Q2 FY27, even as the customer count rose to 1,59,700 from 1,45,400 in the preceding quarter. Housing Finance reported that the Aditya Birla Group ecosystem contributed 17.5% of retail disbursements in Q2 FY27.

Management’s stated plan is to accelerate growth in prime and affordable segments with average ticket sizes of Rs 25 lakh to Rs 30 lakh. It also plans for growth to be augmented by the Aditya Birla Group ecosystem, which generated 17.5% of retail disbursements in Q2 FY27.

Did Housing Finance improve loan quality?

Housing Finance reduced combined Stage 2 and Stage 3 loans to 0.65% of the loan book at September 2026, down 45 basis points from 1.10% at September 2025 and 13 basis points from 0.78% at June 2026. In rupee terms, the combined balance declined to Rs 341 crore from Rs 383 crore a year earlier as the total loan book increased to Rs 52,221 crore from Rs 34,823 crore.

Stage 1 loans represented 99.35% of the loan book at September 2026, compared with 98.90% a year earlier and 99.22% at June 2026. The Stage 1 balance rose to Rs 51,879 crore from Rs 34,440 crore in September 2025, while Stage 2 loans declined to Rs 150 crore and Stage 3 loans stood at Rs 192 crore.

The Stage 3 provision coverage ratio, or PCR, was 57.0% at September 2026, compared with 57.1% at June 2026 and 57.6% at September 2025. The presentation cites segment-focused credit teams, risk-based products and credit evaluation, and analytics-led portfolio management as its credit mechanisms.

How did Housing Finance earnings, costs and capital change?

Housing Finance reported profit after tax of Rs 260 crore in Q2 FY27, compared with Rs 151 crore in Q2 FY26 and Rs 233 crore in Q1 FY27. Operating profit was Rs 368 crore, versus Rs 222 crore a year earlier, while credit provisioning was Rs 32 crore against Rs 28 crore in Q2 FY26.

Net interest income margin, including fee income, was 5.21% in Q2 FY27, compared with 5.07% in Q2 FY26 and 5.20% in Q1 FY27. Operating expenses as a share of the average loan book declined to 2.22% from 2.39%, while the cost-to-income ratio fell to 42.59% from 47.05%.

Credit provisioning as a share of the average loan book declined to 0.26% in Q2 FY27 from 0.34% a year earlier. Return on assets was 2.12%, above 1.82% in Q2 FY26, while return on equity was 11.47%, below 13.95% a year earlier.

Net worth stood at Rs 9,188 crore in Q2 FY27, compared with Rs 4,552 crore in Q2 FY26. Total capital adequacy ratio, or CRAR, was 23.48%, up from 16.87%, while debt-to-equity declined to 4.79 from 6.90 despite borrowings and debt securities increasing to Rs 44,003 crore from Rs 31,411 crore.

At September 30, 2026, cumulative asset-liability management, or ALM, inflows matched outflows at 33% in the six-to-12-month bucket and at 100% beyond five years. Average borrowing cost was 7.47% in Q2 FY27; non-convertible debentures accounted for 40% of borrowings, down from 50% in September 2025, while term loans increased to 35% from 29%.

Conclusion

Housing Finance combined 50% AUM growth and 55% disbursement growth with a decline in Stage 2 and Stage 3 exposure to 0.65% in Q2 FY27. Higher net interest income, a lower operating-cost ratio and credit provisioning equal to 0.26% of the average loan book accompanied a 73% increase in profit before tax to Rs 335 crore, while CRAR reached 23.48%.

The next measures to watch are management’s plan to expand prime and affordable lending at Rs 25 lakh to Rs 30 lakh average ticket sizes, and the reach of its 246 branches as of September 30, 2026. Management said the network covered about 85% of its total addressable market and plans to pursue growth and market-share expansion through micro-market penetration, digital customer journeys and group-ecosystem sourcing.