JM Financial home-loan AUM rises 30%, spread reaches 4.8%

JM Financial's Affordable Home Loans increased assets under management (AUM) by 30% year on year to Rs 3,929 crore in Q2FY27, as quarterly disbursements rose 48% to Rs 331 crore and the reported lending spread widened from 4.4% to 4.8%.

What drove Affordable Home Loans' AUM growth in Q2FY27?

Affordable Home Loans increased AUM by Rs 898 crore to Rs 3,929 crore in Q2FY27 from Rs 3,031 crore in Q2FY26. Management lists building scale, increasing productivity, further penetration in existing geographies, and technology-driven sourcing, monitoring and client servicing as the business priorities for its home-loan and loan-against-property operations.

Quarterly disbursements rose faster than the closing loan book, increasing 48% to Rs 331 crore in Q2FY27 from Rs 225 crore in Q2FY26. Half-year disbursements were Rs 692 crore, compared with Rs 418 crore in the prior-year half, showing higher lending activity alongside the 30% growth in AUM.

The on-book share of AUM declined to 76% in Q2FY27 from 84% in Q2FY26. The presentation also reports Rs 175 crore of portfolio assigned during Q2FY27, but it does not provide a period-by-period reconciliation between assignments, on-book AUM and total AUM.

How did Affordable Home Loans' earnings change in Q2FY27?

Affordable Home Loans reported Q2FY27 revenue of Rs 133 crore, up 22% from Rs 109 crore in Q2FY26, while operating profit before tax increased 45% to Rs 26 crore from Rs 18 crore. Operating profit after tax rose 41% to Rs 18 crore from Rs 13 crore, according to the segment presentation.

For H1FY27, Affordable Home Loans reported revenue of Rs 256 crore and operating profit after tax of Rs 35 crore. In FY26, revenue was Rs 455 crore and operating profit after tax was Rs 74 crore, compared with Rs 363 crore and Rs 50 crore respectively in FY25; the presentation states FY24 to FY26 compound annual growth rates of 37% for revenue and 76% for operating profit after tax.

Within JM Financial's Q2FY27 segment table, Affordable Home Loans' Rs 133 crore revenue was below Wealth Management's Rs 353 crore and Private Markets' Rs 254 crore. Its Rs 18 crore segment profit after tax was also below the Rs 30 crore and Rs 77 crore recorded by those segments, while its reported year-on-year profit growth of 41.5% exceeded Wealth Management's 0.4% and Private Markets' decline of 0.5%.

Why did Affordable Home Loans' spread reach 4.8%?

Affordable Home Loans' reported spread increased by 40 basis points to 4.8% in Q2FY27 from 4.4% in Q2FY26, as its cost of funds fell by 30 basis points to 8.3% and yield increased by 10 basis points to 13.1%. A basis point is one-hundredth of a percentage point.

The five-quarter trend shown in the presentation was sequential: spread rose from 4.4% in Q2FY26 to 4.5% in Q3FY26, 4.6% in Q4FY26, 4.7% in Q1FY27 and 4.8% in Q2FY27. Yield was 13.0% in Q2FY26 and Q3FY26 before reaching 13.1% from Q4FY26, while cost of funds decreased from 8.6% to 8.3% over the same period.

Outstanding borrowings stood at Rs 2,196 crore in Q2FY27. Banks and financial institutions accounted for 59% of the liability profile, followed by the National Housing Bank at 20%, mutual funds at 18% and other sources at 3%; the presentation does not disclose borrowing rates for each funding source.

How did Affordable Home Loans' asset quality change?

Affordable Home Loans reported gross non-performing assets (GNPA) of 1.1% and net non-performing assets (NNPA) of 0.7% in Q2FY27, compared with 1.6% and 1.0% respectively in Q2FY26. The gross ratio therefore declined by 50 basis points and the net ratio by 30 basis points while AUM increased by Rs 898 crore.

The presentation does not give absolute GNPA or NNPA balances, provisioning charges, credit costs, write-offs, collection data or overdue buckets for the Rs 3,929 crore portfolio. It therefore provides a comparison of reported asset-quality ratios, but not the individual drivers of their year-on-year movement.

Affordable Home Loans reported an average ticket size of about Rs 10.5 lakh and an average loan-to-value ratio of 60% in Q2FY27. Salaried borrowers accounted for 43% of customers and self-employed borrowers for 57%, with home loans offered to retail salaried customers and loan against property offered to retail self-employed customers.

Where is Affordable Home Loans expanding its network?

Affordable Home Loans operated 152 branches across nine states in Q2FY27, an increase of 18 from 134 branches in Q2FY26, and had 2,488 employees. Gujarat represented 26% of the network, Maharashtra 22%, Tamil Nadu 14% and Telangana 12%, together accounting for 74% of reported branches.

Madhya Pradesh accounted for 10% of branches, followed by Andhra Pradesh at 6%, Rajasthan at 5%, Karnataka at 4% and Chhattisgarh at 1%. Management's stated plan is further penetration in existing geographies, rather than entry into a named additional state.

The 152-branch footprint supports the business's stated focus on scale and productivity, while the customer mix remains weighted toward self-employed borrowers at 57%. The presentation does not disclose branch-level AUM, disbursements or profitability, so it does not quantify the productivity of the 18 net branches added year on year.

Conclusion

Affordable Home Loans combined a 48% increase in Q2FY27 disbursements with 30% AUM growth, revenue growth of 22% and a 41% increase in operating profit after tax. The same period brought a 40-basis-point expansion in spread to 4.8% and lower reported GNPA and NNPA ratios of 1.1% and 0.7%.

The next results will show progress against management's plan to build scale, raise productivity and penetrate existing geographies through technology-led sourcing and servicing. Key disclosed measures to track are whether the 76% on-book AUM share, Rs 2,196 crore borrowing base, 152-branch network and Q2FY27 asset-quality ratios change as disbursements expand.