Aye Finance stock jumps as FY26 AUM hits ₹7,044 cr

What moved the stock

Aye Finance shares rose sharply in Tuesday’s trade after brokerage IIFL Capital initiated coverage with a ‘buy’ rating and highlighted a potential upside of 40%. On the BSE, the stock opened at ₹130.05 versus a previous close of ₹128.20 and climbed to an intraday high of ₹134.25. Around 11:10 am, it was up 4.41% at ₹133.85, extending gains for the second consecutive session after a 2.3% rise in the prior session. In another market update from the same day, the stock ended 7.80% higher at ₹138.20.

FY26 operational update: AUM growth stays strong

Aye Finance said its Assets Under Management (AUM) grew 27% year-on-year to ₹7,044 crore in FY26. The company operates as a non-banking financial company in the middle layer (NBFC-ML) and focuses on lending to micro-scale MSMEs across India. IIFL Capital also referenced Aye Finance’s AUM at about ₹7,000 crore and noted its granular average ticket size of around ₹2 lakh. The lender’s FY26 performance update also pointed to stronger activity on disbursements, with quarterly disbursements up 25% year-on-year and annual disbursements up 20%.

Profit and asset quality: what the company disclosed

In commentary attributed to Managing Director Sanjay Sharma, the company said FY26 saw improved profitability and credit quality in a year marked by “industry-wide over-lending and market corrections.” Aye Finance said it closed Q4 with profit after tax (PAT) of ₹86 crore and ROE of 16% for the quarter. It also said credit costs have reduced for five consecutive quarters while maintaining a credit PCR of 64%. In a separate performance snapshot, credit cost was stated at 4.3%, down 186 basis points year-on-year.

Borrower additions and branch-led scaling

Aye Finance reported adding 70,841 new borrowers in Q4FY26 and 2,06,833 new borrowers across the full financial year. The borrower growth is a key operating metric for lenders serving micro enterprises, where repeat borrowing and portfolio granularity influence stability. The brokerage note also linked the growth outlook to operating leverage as the branch network matures and AUM scales. It additionally flagged that credit cost normalisation, described as an improvement of 160 basis points, could support profitability.

Revenue and income: latest reported numbers

The company’s reported financial line items showed a clear uplift on both quarter-on-quarter and year-on-year bases. Total revenue from operations was reported at ₹528.44 crore, up 19.35% QoQ from ₹442.78 crore and up 29.16% YoY from ₹409.14 crore. Total income was reported at ₹545.27 crore, up 19.85% QoQ from ₹454.95 crore and up 29.79% YoY from ₹420.11 crore.

In another summary dataset tagged “MAR ’26”, revenue was shown at ₹545 crore with growth of 19.85%, while profit was shown at ₹85.91 crore with growth of 101.67%. Separately, profit figures were listed as ₹192 crore for TTM, ₹171 crore for Mar 2025 and ₹172 crore for Mar 2024.

Key numbers at a glance

How IIFL Capital framed the valuation and growth outlook

IIFL Capital said it expects 27% AUM CAGR and 44% PAT CAGR over FY26-29. It also cited an implied FY28 price-to-book (PB) multiple of 1.4 times and price-to-earnings (PE) multiple of 10 times, linked to ROA and ROE of 4.1% and 14.5%, respectively. The brokerage note also mentioned a three-year EPS CAGR estimate of 34%. While it expects operating leverage and lower credit costs to support earnings, it also pointed to lower NIM risk due to a fast-growing mortgage book.

Stock performance: recent milestones investors tracked

Over the last month, Aye Finance stock gained 13% even as the Sensex fell 4%, according to the market snapshot provided. The share price has seen sharp swings since listing. It hit a record high of ₹161.50 on 11 May after touching a record low of ₹88.40 on 2 April. In a separate update in Hindi, the stock was also described as jumping 17% to ₹158 after March-quarter results showed profit up 110% to ₹86 crore, and it noted a post-IPO low near ₹89.

Business model and customer segment

Aye Finance is described as an NBFC-Middle Layer lender to under-served micro enterprises. It is known for a “Cluster-Based Underwriting” model that uses data and local market understanding to lend to informal businesses across manufacturing, trading, and services. The company’s focus segment was described as micro enterprises with annual turnover between ₹20 lakh and ₹1 crore. Its product mix includes secured (mortgage) and unsecured (hypothecation) working capital loans.

IPO and corporate context

Aye Finance debuted on the bourses in February, and a separate IPO summary in the provided information described a fresh issue of ₹710 crore and an offer for sale of ₹300 crore under a book-building process. The IPO was stated to have opened on 09 February 2026 and closed on 11 February 2026, with a price band of ₹122 to ₹129. At Tuesday’s closing level of ₹138.20, the stock was described as trading 7.13% above its IPO price of ₹129.

Conclusion

Aye Finance’s FY26 update showed AUM rising 27% to ₹7,044 crore, alongside Q4 PAT of ₹86 crore and a stated improvement in credit costs and provisioning coverage. The stock reaction reflected both the operating update and IIFL Capital’s initiation with a ‘buy’ rating, which set expectations around AUM-led scale and operating leverage over FY26-29. Near-term attention is likely to stay on disbursement momentum, borrower additions, and whether the reported decline in credit costs sustains over upcoming quarters.