Aptus Q1 FY27: Growth momentum improves, asset quality sees a June-end wobble

Aptus Value Housing Finance India Limited began FY27 with a stronger growth print and broadly stable profitability, even as collections saw a temporary soft patch at the end of June. For the quarter ended June 30, 2026, assets under management rose to 13,648 crore, up 21% year-on-year. Disbursements increased 36% to 1,053 crore. Profit after tax grew 19% to 261 crore.

The business continues to be anchored in lending to largely self-employed customers in semi-urban and rural markets, with a focus on first-time home buyers. The company disclosed that 80% of customers are self-employed and 73% are in the low-income group segment, with a branch footprint of 372 and a customer base of 1.93 lakh.

Profitability remained among the strongest in the sector. Q1 FY27 RoA stood at 7.8% and RoE at 20.4%. Spread was reported at 9.0%, supported by a decline in cost of borrowings to around 8.0% even as yields moderated.

Distribution is the growth lever: branches plus new sourcing channels

Management’s commentary across the investor presentation and the earnings call points to a familiar playbook: expand the branch network, deepen in existing states, and build non-branch sourcing to reduce dependency on frontline hiring and competitive poaching.

During Q1 FY27, the company added 33 branches, taking the total to 372. Management reiterated a full-year plan to add 60 to 70 branches. The company also highlighted a contiguous expansion strategy, where new branches are typically added in adjacent markets after assessing demographics, competitive intensity, and delinquency trends.

Alongside branches, Aptus is pushing an omni-channel sourcing model through a mobile-first digital loan origination system. In Q1 FY27, sourcing mix was disclosed as 69.5% organic through in-house sourcing, 12.6% through digital marketing, and 8.0% via the connector channel. Customer App referrals and the Bandhu App contributed 5.8% and 4.1%, respectively.

The connector channel is a key theme this quarter. Management noted that connectors contributed 8% of disbursements in Q1 and expects this to increase further through the year. The company also disclosed that it had built around 1,000 connectors across 333 branches, roughly 3 to 4 connectors per branch.

Financial performance: stable spreads, cost discipline, high returns

The consolidated profit and loss statement shows net income margin of 441 crore in Q1 FY27, up 19% year-on-year. Operating expenses rose to 90 crore from 74 crore last year, while credit cost increased to 21 crore from 11 crore. Profit after tax grew to 261 crore from 219 crore.

Yield moderated sequentially, which management said was expected due to calibrated pricing reductions in select ticket sizes. However, this was offset by liability management and a lower cost of borrowing, keeping spreads stable.

Operating cost discipline continues to be a differentiator. Opex to average AUM remained at 2.7%, within management’s guided range of 2.6% to 2.8%. Management noted that many of the branches opened in Q1 were added in June, so some costs such as rent would reflect more meaningfully in Q2.

Below is a financial snapshot based on numbers disclosed in the investor presentation.

Asset quality: deterioration in Q1, management cites temporary NBFC collections issue

The main concern in the quarter was the sequential weakening in collections and early delinquency buckets.

Collection efficiency fell to 98.52% in Q1 FY27 from 100.50% in Q4 FY26. The 30-plus DPD metric increased to 6.87% from 6.21%. GNPA rose to 1.70% and NNPA to 1.29%.

On the earnings call, management emphasized that the soft patch was concentrated in the NBFC portfolio and was partly seasonal. They disclosed that collection efficiency was around 99.5% in the housing finance company portfolio and around 97.5% in the NBFC portfolio. They attributed the Q1 issue to a temporary hitch during the end of June when some borrower commitments were not met, and said that collections improved in July, with 30-plus DPD declining by nearly 20 basis points.

The company also contextualized consolidated asset quality by noting that it effectively runs two businesses with different benchmarks: the housing finance business and the NBFC business. Management indicated that from September 2026 onward, it plans to provide separate data for the two entities in investor presentations.

On provisioning, the presentation included an expected credit loss table. As of June 30, 2026, Stage 3 assets were 215.3 crore, representing 1.7% of the portfolio, with a Stage 3 provision coverage ratio of 25%. Total ECL provision was 130.2 crore against a total loan book of 12,690.8 crore, implying a provision coverage ratio of 1.0%.

Management reiterated FY27 credit cost guidance of 0.5% plus or minus 10 basis points and said Q1 credit cost of around 0.6% was within the band. They also stated the write-off policy would continue, with accounts beyond 500 days to be written off. Management attributed the lower effective tax rate in recent quarters to tax benefits linked to write-offs.

Funding, liquidity and capital position remain comfortable

The funding slide highlights a diversified liability profile, with 25-plus lender relationships and a stated absence of short-term CP exposure. Management said it raised about 876 crore in Q1 through a mix of term loans, securitization and direct assignment.

Liquidity as of June 30, 2026 was disclosed as 676.4 crore of cash and equivalents and 1,257.0 crore of unavailed sanctions, totaling 1,933.4 crore.

Capital adequacy was reported at 70.0%, a high buffer for growth and resilience. The company also shared an asset-liability maturity profile that showed surpluses across all disclosed buckets as of June 30, 2026.

On interest rate risk, management noted that 66% of borrowings are variable, with 35% linked to the repo rate and 31% to MCLR. They indicated that even if interest rates rise, the estimated impact on margins would be limited, citing an impact estimate of about 0.06%.

What to watch next

Aptus enters FY27 with a clear operating plan: continue branch expansion into Maharashtra and Odisha while strengthening sourcing through connectors, digital marketing, and its apps. Growth guidance for FY27 AUM remains 22% to 24%, supported by a higher disbursement run-rate and continued efforts to increase average ticket size.

At the same time, the quarter reminds investors that collections volatility can emerge, particularly in the NBFC portfolio. Management’s assertion that the June-end issue has already started correcting in July will be tested in subsequent quarters through trends in 30-plus DPD, collection efficiency, and credit cost.

The other evolving piece is product expansion. Management stated that new lending products are under evaluation, primarily in the NBFC, to diversify income streams and support longer-term scaling. More details are expected in future updates.

Overall, Q1 FY27 reinforces Aptus’ positioning as a high-return affordable lending franchise with a cost-efficient model and strong capital buffers, while also highlighting that asset quality and collections remain the key swing factor to monitor as the company expands beyond its South India stronghold.