/*** blogpostTitle: Aptus FY26: Growth returns, credit stays in focus blogpostSlug: aptus-fy26 blogpostShortTitle: Aptus FY26 growth and credit focus blogpostCoverImageDescription: Ultra-realistic corporate finance scene showing a clean dashboard on a laptop with a rising AUM line chart from 10,865 to 13,107, a bar chart for quarterly disbursements peaking at 1,242, and small gauge widgets for GNPA at 1.52 and RoE at 20.1. Background shows a muted modern office desk with papers and a calculator, neutral lighting, no logos or text labels. ***/

Aptus FY26: Growth returns, credit stays in focus

Aptus Value Housing Finance India Limited closed FY26 with faster growth and strong profitability, even as asset quality indicators worsened from last year. The company ended the year with assets under management (AUM) of ₹13,107 crore, up 21% year-on-year. Profit after tax (PAT) rose 26% to ₹943 crore, keeping return ratios among the strongest in the sector at 7.9% RoA and 20.1% RoE.

The March quarter reinforced that momentum. Q4 FY26 disbursements came in at ₹1,242 crore, the highest quarterly disbursement for Aptus, with 21% growth quarter-on-quarter and 17% year-on-year. PAT for the quarter was ₹261 crore, up 26% year-on-year, and RoA improved sequentially to 8.2%.

This performance came after a deliberate product and policy shift during the year. Management said the company discontinued sanctions below ₹7 lakh as part of its effort to onboard higher-quality customers. That decision temporarily moderated disbursements in Q1 and Q2, but the company rebounded strongly in Q4 and said the momentum continued into April 2026.

Growth engines: branches, new states, and channel build-out

Aptus operates primarily in the affordable housing segment, serving largely self-employed customers in semi-urban markets. The product suite is granular and secured. The presentation describes three key offerings with similar risk characteristics: home loans, quasi home loans, and small business loans. Average loan-to-value is around 40% across products, and the company emphasises an in-house model across sourcing, underwriting, legal, technical, and collections.

Geographically, the core book remains concentrated in South India. As of FY26, state-wise AUM stood at ₹5,663 crore in Andhra Pradesh, ₹4,112 crore in Tamil Nadu, ₹2,204 crore in Telangana, and ₹985 crore in Karnataka. Newer states, Maharashtra and Odisha, contributed ₹143 crore of AUM, reflecting early-stage scale-up.

The branch network expanded to 339 branches by March 31, 2026, with 39 branches added during FY26. Management outlined a sharper pace of rollout in FY27. On the earnings call, they said they plan to open around 60 branches in FY27, with about 30 branches planned in Maharashtra and Odisha and the remainder largely in Andhra Pradesh and Telangana.

The company also laid out sourcing initiatives beyond organic branch sourcing. Management described two additional channels: digital sourcing through customer referrals and ecosystem references, and a connector channel being built out at the branch level. Branch managers have been tasked with recruiting connectors as a supplementary lead pipeline.

Financial performance: spreads improved as cost of funds eased

FY26 profitability was supported by stable yields and a visible improvement in the cost of borrowings. The presentation shows FY26 yield at 17.2% versus 17.4% in FY25, while cost of borrowings declined to 8.3% from 8.7%. This lifted the FY26 spread to 8.9%, up from 8.7% in FY25.

Quarterly trends show the same direction. Cost of borrowings improved steadily during FY26 and ended Q4 at 8.1%. Yield eased slightly to 17.1% in Q4. The net impact was a Q4 spread of 9.0%.

Operating costs remained controlled. Opex to average AUM was 2.7% in FY26, broadly in line with prior years. On the call, management reiterated that the long-term range they aim to maintain is 2.6% to 2.8%. They attributed the slight rise to higher payouts linked to a strong Q4, new branch additions, and increased IT and security spends.

Credit costs moved up versus FY25. The investor presentation shows FY26 credit cost at 50 bps, described as within guided range, while the consolidated P&L shows credit cost of ₹62 crore in FY26 versus ₹28 crore in FY25.

Financial summary (as disclosed)

Credit trends: better collections in Q4, but FY26 NPA ratios rose

Asset quality is the key area where FY26 looks weaker than FY25. Gross NPA rose to 1.52% in FY26 from 1.19% in FY25. Net NPA increased to 1.15% from 0.89%. Management said the rise was primarily driven by a marginal increase in NPAs in the NBFC book.

At the same time, the Q4 trajectory improved sequentially. The presentation shows collection efficiency at 100.5% in Q4 FY26 versus 99.1% in Q3 FY26, and 30+ DPD declined to 6.21% from 6.48%. On the call, management highlighted Karnataka as a geography where collections were somewhat weaker, and said they were strengthening collections capacity there. They also said collections in the NBFC or non-home segment were slightly lower than in the housing portfolio.

Provisioning data is disclosed through the ECL table. As of March 31, 2026, gross Stage 3 loans were ₹189.1 crore with Stage 3 provision of ₹47.3 crore, implying a provision coverage ratio of 25.0% for Stage 3. Total ECL provision was ₹127.2 crore, and the presentation notes ECL at 1.03% on a combined basis.

Technology and process: digitisation is now central to scale

Aptus continues to push a technology-led operating model, with a mobile-first, integrated loan origination system and a centralized underwriting setup. The presentation emphasises rule-based decision engines and analytics for delinquency tracking. Management described account aggregator and credit bureau data as key inputs to underwriting and portfolio monitoring.

Digital adoption metrics are unusually high for a lender operating in Tier 2 and Tier 3 markets. In Q4 FY26, 92.3% of agreements were executed digitally and 94.0% of collections were through digital channels. The company also disclosed that 99.5% of customers were on the app and account aggregator penetration was 82.3%.

Funding and capital: diversified borrowing mix and high capital adequacy

The funding mix is diversified, with term loans at 57.6%, securitisation and direct assignment at 19.2% (PTC 11.1% and DA 8.1%), NCDs at 14.6%, and NHB at 8.6%. The company stated it has 25-plus lender relationships and no exposure to short-term borrowings including CPs.

Capital adequacy remains very high. The presentation reports CRAR of 71.0% as of March 31, 2026. Liquidity disclosures show cash and cash equivalents and unavailed bank sanctions totalling ₹2,061.7 crore as of March 31, 2025, along with a forward liquidity schedule indicating a surplus available for business up to September 2026.

In corporate announcements, the board declared a second interim dividend of ₹2.50 per equity share for FY26 and also approved issuance of non-convertible debentures up to ₹3,000 crore through private placement in one or more tranches.

FY27 outlook: growth guidance backed by expansion plans

Management guided for 22% to 24% AUM growth in FY27. They linked this to deeper penetration in existing markets, expansion in Maharashtra and Odisha, channel augmentation, higher average ticket sizes, calibrated lending rates on incremental loans, and improved productivity.

On cost of funds, management did not indicate expectations of further decline. They said incremental cost of funds in housing finance was around 7.8% to 7.9% and in the NBFC book was around 8.2% to 8.3%, with limited scope for reduction in coming quarters. On credit costs, management reiterated a range of 0.5% plus or minus 0.1%.

The takeaway from the FY26 communication is straightforward. Aptus has returned to stronger disbursement momentum after a policy-driven slowdown earlier in the year. Profitability remains strong, supported by improved funding costs and disciplined operating expenses. The swing factor for FY27 will be whether the company can scale outside its southern stronghold while keeping collections stable, especially in the NBFC portion and in pockets where stress has been acknowledged.