📉 The Financial Deep Dive
The Numbers:
Aadhar Housing Finance Limited announced a strong financial performance for the quarter ended December 31, 2025 (3Q FY'26). Profit After Tax (PAT) for the nine months of FY'26 reached ₹797 crore, marking a significant 20% year-on-year (YoY) growth. In the third quarter specifically, PAT stood at ₹294 crore, a robust 23% YoY increase, even after excluding the impact of the new Labor Code which resulted in an exceptional item of ₹16 crore for past service cost.
Assets Under Management (AUM) demonstrated healthy expansion, growing 20% YoY to ₹28,790 crore as of December 31, 2025. For the nine months of FY'26, disbursements were ₹6,469 crore, up 15% YoY. The Cost-to-Income ratio for the nine months FY'26 saw an improvement of 50 basis points (bps) YoY, settling at 35.4%, aligning with management's strategic objectives.
The Quality:
Portfolio quality remained a strong point. Gross Non-Performing Assets (GNPA) were reported at 1.38%, showing a sequential improvement of 4 bps. Net NPAs stood at 1%, compared to 0.9% in the prior year's third quarter (3Q FY'24). Collection efficiency consistently remained upward of 99%, indicating sound operational execution. Early bucket delinquencies and Stage 2 assets also displayed sequential improvement.
The company's exit spread, a key profitability metric, was recorded at a healthy 5.97%. While specific revenue and EBITDA figures are not detailed in the provided update, the PAT growth and improved Cost-to-Income ratio signal underlying operational efficiency and profitability.
The Grill & Management Commentary:
Management expressed substantial optimism regarding the operating environment, reiterating confidence in maintaining the current growth trajectory and achieving its guidance for FY'26 and the medium term. There were no explicit mentions of aggressive analyst questions or evasive management responses; the commentary focused on continued expansion and strategic execution. The competitive intensity in their niche operating segment (low-income housing finance with average ticket sizes below ₹15 lakhs) was noted as relatively low, attributed to their extensive branch network in emerging locations.
Outlook & Guidance:
The company has set an ambitious target of crossing ₹30,000 crore in AUM by the end of FY'26. For the full fiscal year FY'26, AUM growth is projected to be upward of 20%. Disbursement growth for the fourth quarter (Q4 FY'26) is anticipated at 16-17%. Similar robust growth trends are expected to continue into FY'27, with a medium-term AUM growth target of 20%. Credit cost guidance for FY'26 remains within 25 bps, with a medium-term target of 25-26 bps. Year-end NPA levels for FY'26 are projected to be between 1.10% and 1.15%.
Financial Deep Dive:
Borrowings increased by 16% YoY to ₹17,500 crore as of December 31, 2025. Liquidity stood at a comfortable ₹1,435 crore. The company maintained strong capital buffers, with a capital adequacy ratio of 43.6% for Tier 1 and 0.5% for Tier 2.
In a strategic move to enhance customer affordability and competitiveness, Aadhar Housing Finance decided to reduce its lending rates by 15 bps effective from February 2026, impacting approximately 75% of its floating-rate customer base.
Key Events and Strategy:
The company continued its physical expansion, adding 10 new branches in 3Q FY'26, bringing its total network to 621 branches spread across 22 states. Technology remains a core focus, with investments in analytics and machine learning aimed at enhancing credit assessment and risk monitoring capabilities. The Pradhan Mantri Awas Yojana (PMAY) 2.0 scheme continues to be a demand driver, with over 10,000 customers benefiting from subsidies. Management clarified its loan mix strategy, emphasizing that while non-home loan growth outpaced home loans YoY, the company is committed to maintaining its desired regulatory mix (70:30 home to non-home loans), noting an improvement in the behaviour of the non-home loan book in recent quarters.