JM Financial Home Loans AUM rises 30% as spread reaches 4.8%

JM Financial Home Loans reported assets under management of Rs 3,929 crore in Q2FY27, 30% above Q2FY26, while its lending spread increased to 4.8% from 4.4%. The business also reported lower gross and net non-performing asset ratios of 1.1% and 0.7%, respectively, alongside quarterly disbursements of Rs 331 crore.

How fast did Home Loans grow in Q2FY27?

Home Loans grew assets under management, or AUM, to Rs 3,929 crore in Q2FY27 from Rs 3,031 crore in Q2FY26, a 30% year-on-year increase. The on-book proportion of AUM was 76% in Q2FY27, compared with 84% a year earlier, indicating a change in the reported portfolio mix as total AUM rose.

Quarterly disbursements increased 48% to Rs 331 crore from Rs 225 crore in Q2FY26, exceeding the 30% increase in AUM. The presentation also shows half-year disbursements of Rs 692 crore in Q2FY27 against Rs 418 crore in the comparable figure, pointing to a higher flow of new lending during the period.

Home Loans' revenue rose 22% to Rs 133 crore in Q2FY27 from Rs 109 crore in Q2FY26. H1FY27 revenue was Rs 256 crore, compared with Rs 210 crore in H1FY26, while management reported a 37% compound annual growth rate between FY24 revenue of Rs 243 crore and FY26 revenue of Rs 455 crore.

Why did Home Loans' lending spread increase to 4.8%?

Home Loans' spread reached 4.8% in Q2FY27 as reported yield was 13.1% and cost of funds, or CoF, was 8.3%. This was 40 basis points above the 4.4% spread in Q2FY26, when yield was 13.0% and CoF was 8.6%; one basis point equals one-hundredth of a percentage point.

The spread increased in each reported quarter, from 4.4% in Q2FY26 to 4.5% in Q3FY26, 4.6% in Q4FY26 and 4.7% in Q1FY27. Yield remained between 13.0% and 13.1% over those five quarters, while CoF declined by 30 basis points, making the lower reported funding cost the main disclosed contributor to the wider spread.

Borrowings outstanding were 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 provide borrowing rates by source.

Did Home Loans improve asset quality while expanding?

Home Loans reduced both reported non-performing asset ratios while AUM increased 30% in Q2FY27. Gross non-performing assets, or GNPA, declined to 1.1% from 1.6% in Q2FY26, and net non-performing assets, or NNPA, fell to 0.7% from 1.0%.

The movements equal a 50-basis-point decline in GNPA and a 30-basis-point decline in NNPA. The presentation does not disclose credit costs, delinquency buckets, collection data, write-offs or recoveries, so it does not specify the operational causes of the changes in the two ratios.

Home Loans reported an average ticket size of about Rs 10.5 lakh and an average loan-to-value ratio, or LTV, of 60% in Q2FY27. Its customer mix was 43% salaried and 57% self-employed, while products listed were home loans and loans against property.

Management also disclosed Rs 175 crore of portfolio assigned in Q2FY27. The source does not state whether this assignment affected the on-book AUM proportion, which declined from 84% in Q2FY26 to 76% in Q2FY27.

How did Home Loans' earnings change with portfolio growth?

Home Loans' operating profit before tax rose 41% to Rs 26 crore in Q2FY27 from Rs 18 crore in Q2FY26, ahead of the 22% increase in revenue. Operating profit after tax also increased 41%, to Rs 18 crore from Rs 13 crore; these figures are unaudited management estimates provided for relative comparison.

For H1FY27, operating profit before tax was Rs 48 crore and operating profit after tax was Rs 35 crore, compared with FY26 figures of Rs 100 crore and Rs 74 crore. The FY26 figures were adjusted for the statutory impact of new labour codes of Rs 1 crore before tax and non-controlling interests, and Rs 1 crore after tax and non-controlling interests.

At the group segment level, Affordable Home Loans recorded segment profit after tax of Rs 18 crore in Q2FY27, up from Rs 13 crore in Q2FY26. This contrasted with total operating segment profit after tax of Rs 240 crore, which declined 11.3% year-on-year from Rs 270 crore.

Where is Home Loans expanding its branch network?

Home Loans operated 152 branches across nine states in Q2FY27, up 18 from 134 branches in Q2FY26, and employed 2,488 people. Gujarat represented 26% of branches and Maharashtra 22%, together accounting for 48% of the disclosed network.

Tamil Nadu accounted for 14% of branches, Telangana for 12% and Madhya Pradesh for 10%. Andhra Pradesh represented 6%, Rajasthan 5%, Karnataka 4% and Chhattisgarh 1%, aligning with management's stated priority of further penetration in existing geographies.

Management lists building scale, increasing productivity and technology-driven sourcing, monitoring and client servicing as business priorities. The presentation does not disclose branch-level disbursements, employee productivity, digital sourcing volumes or branch-expansion targets, so the available data establishes network growth rather than location-level performance.

Conclusion

Home Loans combined 30% AUM growth with a 48% increase in Q2FY27 disbursements, a 4.8% spread and lower reported GNPA and NNPA ratios. Revenue increased 22% to Rs 133 crore, while operating profit after tax increased 41% to Rs 18 crore, alongside a 30-basis-point reduction in reported cost of funds to 8.3%.

The next disclosed markers are whether management's plans to build scale, increase productivity and deepen penetration in existing geographies lead to further changes in the 152-branch network and 76% on-book AUM share. Asset quality and funding costs also remain relevant disclosed measures after GNPA reached 1.1%, NNPA reached 0.7% and spread reached 4.8% in Q2FY27.