Good day, and welcome to Aadhar Housing Finance Q4 FY 2026 earnings conference call hosted by JM Financial Institutional Securities Limited. I now hand the conference over to Mr. Ajit Kumar from JM Financial Institutional Securities Limited. Thank you, and over to you.
Thank you, Rutuja. Good evening, everyone. Apologies for the slight delay. Welcome to Q4 FY 2026 earnings call of Aadhar Housing Limited. On behalf of JM Financial, I would like to thank Aadhar management for giving us the opportunity to host this call. Today, we have with us the entire top management team of Aadhar, represented by Mr. Deo Shankar Tripathi, Executive Vice Chairman; Mr. Rishi Anand, MD & CEO; Mr. Rajesh Viswanathan, CFO; and Mr. Sanjay Moolchandani, Head Financial Planning. I'll now hand over the call to Rishi, sir, for his opening remarks, and then we can open the floor for Q&A. Over to you, sir.
Thank you so much, Ajit, and a very good evening to all of you. First of all, apologies for this slight delay. Technology sometimes plays its own role, but there we are. Thank you for joining us today to discuss Aadhar Housing Finance performance for the fourth quarter and full year ending March 31st, 2026. We are pleased to close the financial year on a very strong note with consistent execution across growth, asset quality and profitability matrices. I am happy to share that during the year we have achieved a critical milestone with our asset under management crossing INR 30,000 crore. This reflects the strength of our business model and our continued focus on affordable housing segment.
In addition, we have delivered our highest ever disbursement of INR 3,087 crore in a single quarter in Q4 FY 2026, driven by steady demand and improved execution across our branch network. The operating environment during the quarter remained very supportive for the housing finance sector as a whole. We saw healthy demand momentum across markets. Importantly, demand in our segment continues to remain largely end-user driven, with significant share coming from first-time homebuyers, particularly across emerging markets. This provides stability to growth and limits speculative activity in the segment. At the same time, competitive intensity remains elevated in certain segments, particularly in the urban segment, where banks continue to be active. In the low-income segment where we operate, demand trends remain very steady with well-supported structural drivers.
Overall, the combination of supportive policy measures, stable demand and healthy asset quality trends provide a constructive backdrop for affordable housing finance segment. Coming to Aadhar's performance for the quarter and full year. As of 31st March 2026, our AUM stood at INR 30,571 crore, crossing the INR 30,000 crore milestone, which I just mentioned, registering a 20% YOY growth. Disbursement for FY 2026 stood at INR 9,556 crore, a 17% YOY increase, reflecting steady lending momentum across our core markets, and a PAT of INR 1,096 crore at 20% YOY growth. On all the three critical parameters, we have stood by our guidance and commitment to the market. As we go ahead, we would continue with similar guidance of 20% AUM, 20% profit and 17%-18% disbursement growth.
Disbursement during the quarter four was highest in the company's history, with INR 3,087 crore, which was 20% YOY increase, supported by strong on-the-ground execution and consistent sourcing through branch network. Our portfolio continues to remain fully secured and retail in nature, with a balance between home loans, which is 73%, and non-housing loan, which is loan against property at 27%. We continue to maintain a well-diversified book with an average ticket size of INR 10.9 lakh and a 60% loan to value value ratio, which is well within comfort levels. The salaried segment continues to be at 55% share of the AUM. Balance transfer outflows during the financial year FY 2026 improved by 60 basis points as compared to FY 2025, supported by focused rate retention efforts and data-driven customer engagement.
Asset quality remains pristine, with gross NPAs standing at 1.08%, a sequential improvement of 30 basis points versus quarter three FY 2026. Collection efficiency continues to remain strong above 99.8%, reflecting consistent on-the-ground execution. Importantly, early bucket delinquency remains stable, and stage two asset continue to show improvement by 30 basis points compared to last quarter. 1+ DPD also reflects improvement of 78 basis points on a sequential basis. Our underwriting discipline, combined with strong field-level collections and analytic-led monitoring, continues to support overall portfolio quality. We continue to expand our distribution footprint in a calibrated manner.
We have added five new branches in quarter four and 46 branches in the full year, in line with our strategy, taking our total network today as of March 31st to 626 branches across 22 states, covering over 550+ districts. We are beginning to see encouraging traction in our urban markets, along with continued strong performance in the emerging markets. This gives us confidence in our approach of building a balanced presence across geographies. Our deep local presence and branch-led sourcing model continue to be key strengths, enabling us to understand customer profiles better and drive consistent growth. Our geographical diversifications remain strong, with no single state contributing disproportionately to the AUM. We continue to maintain less than 15% exposure to any state on all three critical parameters. That is AUM, disbursement, and distribution.
Our approach of combining branch expansion with productivity improvement of existing branches continues to support sustainable growth. Technology continues to be a key enabler in our growth. During the year, we are increasingly leveraging AI and analytics across sourcing, underwriting, collections, which is helping us improve turnaround time, strengthening risk assessment, and enhance collection efficiencies. We have also started incorporating AI-led tools in select part of our loan life cycle, and while this is still evolving, we are seeing early benefits in terms of productivity and decision-making. Looking ahead, we remain confident about an operating environment. The affordable housing segment continues to benefit from structural drivers, including favorable demographics, increasing formalization, and continued policy support such as PMAY. We believe demand in our segment will continue to remain stable and end user driven, supported by first-time homebuyers and increased penetration in underserved markets.
While we remain mindful of competitive intensity in certain segments and in the evolving markets, our current portfolio trends and operating metrics give us confidence in our growth trajectory. With a strong balance sheet, stable asset quality, diversified distribution network, and continued focus on execution, we remain well-positioned to sustain our performance and deliver on our medium-term guidance. Aadhar remains committed to its mission of enabling homeownership for low-income families while delivering consistent and sustainable returns to all the stakeholders. With that, I would now hand over to Rajesh, our CFO, to take you through the financial performance in detail. Rajesh, over to you.
Thanks, Rishi Anand. Good evening, everyone. I would like to take you all through the financial performance for quarter four FY 2026 and full year FY 2026. In quarter four FY 2026, our AUM has grown by 20% on a YOY basis. Our overall borrowings on 31st March 2026 stood at INR 18,744 crore compared to INR 16,322 crore as at the previous year end, which is a growth of 15%. The borrowing mix at the end of 31st March 2026 is 51% from banks, NHB share is 22%, NCD share is 19%, ECB share is 5%, and others is 4%.
Our incremental borrowing for quarter four FY 2026 stood at INR 2,430 crore coming in at 7.6%. For the full year it was INR 6,396 crore, which came in at 7.8%. Currently, we have 42 strong and diversified borrowing relationships. In quarter four, fresh NHB borrowings were INR 705 crore, which came in at 6.9%. Of this, the Affordable Housing Fund was INR 141 crore, which came in at a fee, at a rate of 4.3%. Full year FY 2026 NHB borrowings were INR 1,304 crore, which came in at 7.2%, of which the Affordable Housing Fund was INR 261 crore, which came in at 4.7%.
As a strategy to diversify the funding mix, during quarter four FY 2026, we have availed term loan of INR 500 crore, which came at around 7.5% from domestic DFI NaBFID, which is National Bank for Financing Infrastructure and Development. The exit cost of funds on 31st March 2026 stood at 7.71%. In terms of fixed and floating nature of our book, 76% of our borrowings and 73% of our assets are on floating basis. Undrawn sanctions, as at 31st March 2026, is INR 1,687 crore, of which we have INR 246 crore undrawn from NHB. Liquidity at the end of quarter four FY 2026 stood at INR 1,425 crore.
The exit spread stood at the end of 31st March 2026 was 5.82% as compared to 5.7% at the previous year end. Our cost to income ratio for FY 2026 came in at 35.9% as compared to 36.4% in FY 2025, an improvement of approximately 55 basis points. This is in line with our guidance of dropping cost to income ratio by about 50 basis points in the current financial year. GNPA has seen a marked improvement, which is also a seasonality impact in quarter four. GNPA came in at 1.08% as compared to 1.05% in quarter four FY 2025. Capital adequacy ratio for quarter four FY 2026 stood at 42% for Tier one and 0.5% for Tier two .
Finally, the PAT came in at INR 1,108 crore without the impact of the new labor law code. This is compared to INR 912 crore in FY 2025, rendering a YOY growth of 22%. Quarter four PAT came in at INR 311 crore as compared to INR 245 crore in quarter four FY 2025, a growth of 27%. FY 2026 ROA and ROE, again without the impact of the new labor law code, is 4.4%, and ROE is 15.9%.
For quarter four , the ROA and ROE is 4.8 and 17.1. This is compared to 4.4 and 15.9 in quarter four FY 2025. The impact of the labor law code, which we have already taken in quarter three FY 2026, is INR 16 crore, which as per the ICAI guidelines is shown as an exceptional item. Also included in the manpower cost for quarter four FY 2026 is an amount of INR 13.5 crore, both in quarter four FY 2026 and full year FY 2026, which is the impact of fresh ESOPs that we have granted to employees in the quarter four of the current financial year. The impact of this is in that quarter and full year is INR 13.5 crore.
Number of employees as at 31st March 2026, on-roll was 5,400 and off-roll was 3,900, as compared to 4,600 on-roll last year and off-roll was 4,300 in March 2025. We are focusing on maintaining a healthy book and delivering consistent performance on a quarter and yearly basis. With that, we can open up for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two . Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Renish from ICICI Securities. Please go ahead.
Yeah. Hi, sir. Congrats on a good set of numbers. Just two things, sir. One, on this, impact of, West Asia war. I mean, do you foresee or do you see any impact on ground, let us say in month of March, April? If yes, I mean, are we intending to calibrate disbursement in near term just as a, you know, sort of precautionary measure?
Hi, Renish. Thank you for your question. West Asia war or the current geopolitical issues, you know, the first line of defense, and I always make this statement for us, the first line of defense is always, you know, if there was something to be going wrong, it would be the bounce rate, you know, increase or decrease in the bounce rate.
Right.
The last, the current month, three cycles of bounce rates have not seen any trend whatsoever. You know, our bounce rates have been stable for the last six quarters. From that perspective, we are, I would say, safe as we speak. That is one. Second is from a ground-up perspective, you know, all our 2,000 people in the collections have been given heads-up to be very careful and closely in connect with the customers. That is point number two.
Point number three is most of our customers actually deal in essential commodities. If I can go back and relate to various situations that we have all seen, for example the COVID situation, et cetera. Essential commodities people dealing in essential commodities got hardly impacted because that's what, you know. You know, the cycle of essential commodities continues. That is number three.
Right.
Lastly, you know, our belief and the way we look at, the West Asia crisis is, you know, the first people who will get impacted are companies which would be highly exposed to NRI communities. Fortunately, in our case, we hardly have any exposure to NRI consumers. I hope that helps, Rinesh.
Okay. Yeah. It should solve, sir. I think, most of these indicators are actually showing a no sign of stress, at least as of now.
That's right.
Okay. My second question is on this, you know, growth, right? I'm not too much keen on asking you about FY 2027, but just from a three to five perspective, I mean, can you share just your thoughts on the broader industry-wise data points? You know, in a sense, less than INR 25 lakh is ticket size, the total disbursement market and our market share, and how that market share has been trending over say last two to three years. Just to get some idea about how we are positioned and, you know, whether at this INR 30,000 crore of AUM and 20%+ growth, you know, is sustainable or not.
Right. Right. Right. Okay, Rinesh, a few data points. Total outstanding of the entire housing portfolio across various financial institutions would be close to about INR 37 trillion. You know, if I, if I break that structure down into low-income housing, that's where we belong. low-income housing basically would be average ticket size of the book at the book level below INR 15 lakh. That's where we belong. you know, if I were to further. Which approximately housing finance companies in the total pool holds about 20% market share. If I come to low-income housing finance companies and look at our share in that peer group, we have been trending around 16%, 17%. If I look at the current numbers, we are at about 18% market share.
Okay.
all past numbers.
Yeah, yeah.
look at our numbers and how do we look at our growth strategy as we go ahead? You know, we've been delivering constantly. We've been delivering, you know, an AUM growth of upward of close to about 20%-22%. I have just in my opening statement clearly mentioned that we will look at similar numbers from a short-term to medium-term perspective. As an organization, on a lighter note, we work on something called milestones. You know, when we opened this year, and I remember interacting with you as well, that, you know, we had a milestone number of INR 30,000 crore. We fortunately-
Right.
crossed that number with all the efforts of the entire Aadhar team. You know, if I look at the trajectory of numbers that I've guided 20% growth, if I look at three years from now, you know, the next milestone obviously in three years should be INR 50,000 crore. The third point is, you know, there is And I've been making this statement and the more I travel and go out to state levels, et cetera, I get thinking more pulse about it that there is little too much that is happening at the ground level right now, right from various state-level government authorities to central level.
Recently I was in the state of Odisha last week itself, and I happened to catch up with, or I was fortunate to meet up with the Additional Chief Secretary, Housing Development, Finance Secretary Odisha. I, you could clearly see, you know, how the BLC projects under PMAY and AHP projects, which is affordable housing projects, are shaping up 25+ thousand units up for grab. Similar is the situation across multiple states. You talk about, you know, Tamil Nadu, you talk about Karnataka, you talk about MP, you talk about Gujarat. You know, every state government is sitting on almost ready structured houses.
Indeed.
BLC advances being given already. You know, there is too much that is happening at the ground level and I don't foresee any reason why demand should be under question. It can be unless, you know, unforeseen situations like COVID, et cetera, happen, which obviously touch wood, we are not, you know, looking at those situations. Steady state, you know, INR 50,000 crore three years from now.
Got it. It's very, very helpful, sir. Thank you for such a detailed insights. Thank you and best of luck, sir.
Thank you so much, Renish Bhuva.
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead.
Yeah. Thanks for taking the question. Three questions. Firstly, with respect to the LAP growth, both in terms of disbursements, I think maybe it is lagging a bit on the home loan side. Would it be more kind of a seasonal phenomena, any particular reason like last two, three quarters, in fact, the overall non-retail home loan part, maybe non-home loan part that is growing relatively slower. If you can address that and how should we look at it in terms of the overall AUM growth. Second is on the fee income side or maybe on the non-interest income side, both the assignment income is quite high.
Was it like equally larger proportion of assignments done during the quarter or it was more in terms of the spreads which have led to this assignment? Even other income seems to be slightly higher. Is there any one-off out there? Yeah. That's the second question. Thirdly, on ESOP costs, this is just a Q4 cost which is there. This is not gonna accrue even in FY 2027. This is like a one-time cost which we had taken and it is over. There will be no impact getting into FY 2027 too.
Hey, Kunal. Okay. I'll take the first question first. LAP growth. You know, and you're right when you read at the data that, you know, LAP growth has been slightly slow. I would say this was deliberate and it was completely planned. This plan or deliberation started when the tariff issue happened. You know, we cautioned our teams to, you know, be very careful and I will not say go slow, it might be the wrong choice of words, but be very careful. You know, we don't want to do something in haste which will go out and look at our delinquency numbers. We kind of cautioned them.
Right now also, I would say given the current situation of West Asia, and I spoke about it a while back, I don't want to again haste things. We are today at the book level, at the AUM level, we are 73-27. We have a lever of about 3%, and we would want to play at the right time. You know, we are still incrementally doing about 23%-24% Loan Against Property. And we want to maybe take it to about 25% in the current quarter, and we'll wait out, as I said. I wouldn't say there is anything which is growth or degrowth in Loan Against Property. It was purely our management call to wait and watch, and we still kept doing 23%-24%.
Do we have a room of increasing it? Yes, we have a room of increasing it, but we'll wait for the right time. On your next question, Rajesh will come in.
No, differences in the bounce trends between LAP and pure home loan.
Fortunately, no. When it comes to stage three, we all know that there is a differential of about 0.75%. The Loan Against Property is always 0.75%-1%. In our current book, it will be 0.7% higher NPA, but risk-adjusted spread will be about 3.3% and 0.5%. Obviously that sets off completely.
Got it. Yeah.
Yeah, Kunal. Rajesh here. In case of DA income, you're right. The total DA that we did for the whole year was in the range of, what, INR 17, 25 crore. Both the years was a similar figure. The upfront income, which seems higher, is on account of better spreads that we have got. It is the spreads were better in the range of about 80-85 basis points. That's a benefit that we got. Quarter four DA looks slightly higher because some of the deals which ideally we would have liked to consume in quarter three got pushed to quarter four. To that extent, it looks slightly higher. Otherwise, if you look at it, this would be broadly divided by four in our case.
The way we look at DA income is that the net impact of DA in FY 2025, when I say net impact of DA, it is the upfront income that we book on fresh assignment and the unwinding of the existing book, if you look at it for FY 2025 and FY 2026 is exactly the same figure.
The overall impact on P&L is actually positive to that extent in the current financial year. The way we look at DA is probably you will see in overall DA, compared to the INR 1,725 crore that we did in the current year, probably next year we would be trying to grow that in the range of anywhere between 10%-15% in terms of overall DA. In terms of other income, you are right. There was some two one-timers to the extent of about INR 6-7 crore. One was an IT refund of about INR 2.5 crore that we have taken back to the P&L.
The second was some old write-backs that we had, which we had not done for a long time, and that is about to the extent of about INR 3.5 crore. Put together it is in the extent in the range of about INR 6 crore-INR 7 crore that we had as a one-time which is sitting in the fee income.
Sorry, IT refund was?
It was a INR 2.5 crores.
Okay. Total was INR 7 odd crore. Yeah.
That's right. That's right. That's right.
Okay. Thanks. Yeah. That's helpful. Yeah.
Yeah.
Thank you.
Thank you, Kunal.
Yeah. Thank you.
Thank you. The next question is from the line of Shreya Shivani from Nomura. Please go ahead.
Yeah. Thank you for the opportunity, Congratulations on a good set of numbers. I have one question for you on the yields. Can you help me understand, you've taken a PLR reduction from February 26th. The interest rate environment seems very, I mean, it's very volatile depending versus what you would have, how you would have thought in February 2026. How are we thinking about the yields for the year of FY 2027? Also, as you spoke about the LAP book, can you just clarify how much does that, if you increase your LAP mix, for example, how much boost does that give to our yield?
Just the commentary on yields versus the interest rate environment we are in right now and what would we do with that, PLR cut we have taken in February 26th.
Shivani, Rajesh here. I will chip in and then probably Mr. Rishi will top it up. The February rate pass on that we did of 15 basis points was the impact that we had received over the financial year that we passed on. As per our RPLR formula that we had, and as is guided by the ALCO and our board, we had to pass it on and there was no questions on that pass on. Yes, things have changed significantly when we look at February and when we look at now. Our view is that the interest rate cycle has stagnated and to a certain extent will be stagnant for at least two, three quarters.
We boast that if inflation doesn't come under control, then there may be some interest rate surprises on the other side. As we look at it, at least for the next two, three quarters, I think to a certain extent there will be status quo. Coming to the other important thing, the way we like to look at it instead of yields is basically spreads. As we look at it, our exit COF was about 17.1%, and our exit spreads were 5.82%. We have always guided that our spreads year-on-year will probably see some contraction to the extent of about 8-10 basis points. This is predominantly because our incremental business that we do in terms of yields is lower than the book yield that we are carrying.
Our book yield is, if I'm not mistaken, about 13.52%. If you look at our incremental yield, the incremental yield will be in the range of about
13%. 13%.
13%. Yes, the other question which you asked was will there be a kicker that you will receive by doing more of LAP? Example, the benefit that we get by doing more NHL versus HL is almost to the extent of 400 basis points. If my incremental disbursements was theoretically 25% LAP and if I swing 5% towards NHL, I would obviously get a benefit of 400 basis points on that particular portfolio that I disperse. And to that extent of that we think that we have one lever that is available for us to ensure that the spread doesn't contract in a very fast manner.
Yeah. If I can, I can add to that, Shreya. You know, Rajesh spoke about spreads and, you know, another data point at the company level is 74% of our asset side is floating in nature and similar 73% of our liability is floating in nature. While, you know, we are talking about the current scenario, et cetera, and if at all there is a, you know, substantial increase in our COF, you know, we being a majority floating book, it's gonna be passed on to the consumer. Of course, subject to ALCO and board approvals, et cetera. At any stage we will try and we will definitely protect our spreads.
Sure. Absolutely.
Right. Just one clarification we wanted. The part you mentioned about 8 to 10 basis points year-on-year reduction in spreads, is the mix between LAP and home loan stays where it is? If you do anything about the LAP, does that reduction still play out for you?
When we talk about 8-10 basis points reduction, we've been the data that we work on is about 25%-26% LAP. Yes, you are right. We still have room of about 3%-4% of enhancing LAP, and that can be a play area. I also, if you remember my opening statement, I said, in fact to the first question in Renish, I said that, you know, on LAP we are wanting to look at it very carefully. We are not in a hurry. So we I'm sure in the current quarter I'm not going to be taking substantial jump on LAP. We will wait out. Yes, we have a room. If push comes to shove, that's the play area.
Right. This is very useful. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Arun Antony from JM Financial. Please go ahead.
Hi. Hi. Thank you for the opportunity. First of all, congratulations on a good set of numbers and crossing the milestone of INR 30,000 crore. Just a couple of questions from my side. First of all, I just wanted to know what has led to the increase in 1+ DPD by approximately 80 basis points. Another question would be on the disbursement growth. Disbursement growth has been quite robust in this quarter. Approximately 30% QOQ. Is there any specific states or state which has led to this strong momentum? One last question is that the incremental cost of borrowings have also gone up by approximately 10 basis points. Is there any reason which why it has gone up during this quarter? That's all from my side.
Great. Thank you, Arun. One correction oblique clarification. You mentioned 1+ increasing by 80 basis points. Actually, it has reduced by 80 basis points. I just wanted to clarify that. I, you know, I can't be singling out any one effort on singly on a reduction of 80 basis points of 1+ . I think it is a continuous effort. You know, all our foot soldiers in collection side, about 1,800 of them, you know, on a daily basis track that. As an organization, I would say, you know, about 18 months back is when we started driving down 1+ as a deliverable number.
You know, from purely focusing on NPA to also coming back to 1+ because, you know, 1+ s gives you that bulge of 61-90, and we wanted to avoid that at any given point in time. I think it is a combination of concentrated efforts, multiple efforts, right from our basics of call center, calling to the customer, banking cycles, field efforts. It's a combination of multiple things which has reduced the 1+ by 80 basis points. Your second part of the question was 30% overall growth in for the quarter on a sequential basis. Has any particular state given me a huge jump on disbursement?
I don't want to single out any state, but I will still give you some names which are standing out. Maharashtra is standing out for us. Madhya Pradesh is standing out for us. Tamil Nadu did surprisingly well. Delhi, Karnataka, Uttarakhand. These are few top-line numbers I thought I'll mention, but these states have given the required numbers. The third part was on COF, Rajesh Viswanathan.
Yeah. In terms of CoF, the CoF for quarter three, as you rightly said, was 7.45%, and quarter four was 7.54%. This is predominantly because we had kept bank borrowings to the extent possible. We had deferred the drawdowns of that. Some of the drawdowns, or incremental highly higher drawdowns happened in quarter four vis-à-vis quarter three, and that is precisely the reason the 10 basis points is playing out. Anyhow, we are saying that our exit CoF, which is 7.7%, and we believe that for a significant point of time, there is not going to be a significant downward movement on this CoF, considering the interest rate scenario that we just talked about.
If we are able to maintain 7.7% COF throughout the entire next year, I'll be very, very happy, to be very honest. As we said, we will have to wait and watch for the interest rate movements. Rishi says we anyhow we are a significantly even floating book. If we see any incremental interest rate movements, which is very significant, we have an ability to pass it on to our borrowers based on our internal ALCO and board approvals. We will then wait and watch and do it. We personally believe that there is going to be a stagnancy in interest rates, at least for the next two to three quarters.
All right. That is all from my side. Thank you.
Thank you. The next question is from the line of Prithviraj Patil from Investec. Please go ahead.
Yeah. Hi. Thanks for the opportunity. I just, I was looking at the OpEx to AUM, and it is increased sequentially. I just wanted to know, like, the branch count has grown by only around four branches. What has led to this growth? Have we added on new employees here?
I think OpEx to AUM, it is always a quarter four phenomenon because we run various competition and contests in quarter four for our employees. If you look at, I am just flipping it to cost to AUM. Or even the cost to income ratio. If you look to the cost to income ratio, if you look at quarter four last year and quarter four of current year, there has been an improvement in cost to income ratio from quarter four to quarter four.
Sequentially, between quarter three and quarter four, there will always be a growth because there are some one-timers which typically get booked into quarter four, which are predominantly related to contest and competitions that we roll out for for our sales employees in the field.
year-over-year reduction 50 basis points.
Yeah. On a Y-o-Y and by basis, if you look at cost to income ratio, there has been a reduction in cost to income ratio from about 37.9% to 37.1%. Even if you like take the full year, it has reduced from 36.4% to about 35.9%.
Sure. Thank you. What is the employee count, as of March 26?
The on-roll count is 5,430. Off-roll count is 3,965.
Sure. Thank you.
Thank you.
Thank you. The next question is from the line of Shreya Chatterjee from Ageas Federal Life Insurance. Please go ahead.
Hi. Thank you for taking my question, and congratulations on a good set of numbers. My first question is a bit, if you could give a bit more granularity on the 20% AUM growth that you are guiding for. On the basis of the states which you see, the higher number of growth or which you think will grow faster. Also on the ticket size, meaning if your average ticket size is INR 1.1 million. It's INR 11 lakh around. In the EWS and LIG space, like, are you seeing a higher amount of growth in the INR 2-5 lakh space or higher than INR 5 lakh? If you could give some color to that.
Hi, Shreya. One is you wanted the first part of your question was 20% AUM growth, which are the states that are going to contribute. Broadly, you know, all of the states are going to be contributing substantially where we are present. As in the previous question I had highlighted, you know, if I can call out few states, Uttar Pradesh will be contributing the largest chunk for us, followed by it is not in any order, so I am just naming few states. Maharashtra, Madhya Pradesh, Tamil Nadu, Delhi NCR, Karnataka, Haryana, Uttarakhand, Rajasthan. These are the top eight or 10 states which contribute the largest chunk for our business, followed by the other states. On a lighter note, we see some potential now in West Bengal too, as we look at the political change.
That is one. Second is you spoke about 10.8, INR 11 lakh of our ticket size. EWS, LIG below INR 5 lakh, hardly any traction. Even if I talk about our AUM numbers below INR 5 lakh will be close to about 3%, not much. The real traction is actually between INR 5 lakh to, I would say, INR 25 lakh. That's where we are able to, with our concentrated efforts across urban and emerging, we are able to maintain that INR 11 lakh kind of average ticket size. Incrementally, our average ticket size will be about INR 12.5 lakh.
Got it. My second question is on the this OpEx to AUM ratio or the cost to income ratio. Where do you see it going forward and what will contribute to it? What is your branch productivity right now, and how many branches are above that average branch productivity, and how many branches below? If you could just elaborate a bit more to that.
The way we look at cost to income is, and if you look at it consistently over the last two financial years, we have dropped almost to the extent of about 150, 160 basis points. We are looking at another 50 basis points probably in the next financial year. What will be driving this is a combination of productivity. Some of the projects that we have taken up on sales productivity, which will come from our AI-driven models that we will be able to deliver on productivity. In terms of how productive are our branches.
Typically, the branch that we set up in a nine to 12-month period, if it's a small branch, they become profitable or productive, if I can use the word. The slightly bigger urban branches, they take anywhere between 12 to 15 months to become productive. Going by that scenario, I think majority of the branches that we have set up to Q1 of last financial year, have in that sense become productive, I would say. The way we look at contribution of the branches is how fast they can achieve this nine months and 12 to 12 months, for a smaller branch, and for a bigger branch, 12 to 15 months.
I dare say that majority of the branches do turn productive within this period of time. If I can come in there quickly, Shreya. You know, I think Rajesh explained it very nicely. Just as a point, when we talk about branches, you know, at Aadhar, we follow a very differentiated structure as against anybody else in the market. We have four categories of branches, starting from a very small, you know, 50, 60 sq ft office called ultra micro, moving to a micro branch, small branch, and then main branch. That's the category Rajesh spoke about, 9-18 months. Every branch will have a different trajectory of becoming break even or profitable.
Thank you. That was really helpful. Just my last part of the question is on the cost of funds. Do you see any meaningful improvement in FY 2027 or will it continue?
As I said, considering the overall macro, I would be very happy if we are able to maintain the exit rates of the current year. To be very honest, we don't think that anyone is expecting a drop in the cost of funds from here, in or a drop in interest rates from here. The pass-ons for us also has come through majorly. So I think there will be, to a great extent, next two, three quarters at least, we see a status quo, right through our cost of funds.
If we are able to pull the lever on the LAP business that we do and some of the emerging market business that we do, we believe that we will be able to take the yields a bit higher. Protected spreads. Yeah. Spreads will get protected. That is basically the strategy we are trying to play out.
Thank you.
Thank you. The next question is from the line of [Nishchay Sawade] from Kotak. Please go ahead.
Hi. Thanks for taking my question. If you could give some color in terms of how your incremental ticket sizes have moved, you know, over the last four quarters. I know you mentioned the number of INR twelve and a half lakhs in this quarter, but how would this be like a year back?
Just a minute, [Nishchay]. They're just pulling it out. Just a minute. Yeah.
Yeah, sure.
Okay. The movement has been in the range of INR 10.5 Lakh, as I told you, is INR 10.8 lakh on the book.
That's right.
I will do a club of home loan and non-home loans. 13.6 was in quarter three, FY 2026. 12.6 is the last quarter. Slight drop. Prior to that was 13.8, 14.
Got it. You actually come down from.
It's been in the range of, I would say, 12.5- 13.5, Nishint. Nishint, a point to note over here is our LAP contribution has dropped slightly in quarter four. We have done only about 24%, 25%-
Yeah.
of our disbursements in LAP. Typically we do about 28%, 29%. If we did more LAP probably that ticket size would have come in slightly more lower.
Got it. Got it. You're actually going down the ticket size, you're not going up the ticket size, right? I mean, is that?
No, I will not say we're going down the ticket size and, you know, that is where our emerging and urban strategy plays out. You know, when we focus more on emerging locations, and I have called it out when in the previous call as well. Emerging ticket sizes will be much lower. You know, today my emerging C ticket size will be in the range of about INR 8.5 lakh, INR 8.6 lakh. Emerging B will be again INR 10 lakh. Emerging A will be INR 12 lakh. That's what plays out. If the team start bill and urban will be typically INR 17-18 lakh, depending on which city we are talking about. If the strategy that we want to drive of urban emerging plays right, the ticket size should be under control.
You know, the intent is to maintain the book level ticket size even when in the shorter term, in the range of INR 10 lakh-INR 11.5 lakh. That's the aim.
Basically you are.
You know, some quarters, [Nishchay Sawade], some quarters it will go up, some quarters it will come down. If emerging performs in one quarter emerging performs over the targets, your ticket size suddenly will jump up a little bit. That's how it works.
Basically you are, so emerging essentially you mean deep impact branches, right?
Sorry. Yes, emerging C are basically deep impact. Yeah. Smaller and deeper impact branches. Right. Right.
Yeah. You are comfortable to go down the ticket sizes is what we are saying. Probably, you know, the deep impact strategy doesn't change, but maybe in terms of focusing on LAP, that's something which you probably, you know, kind of be a little bit more careful at this stage. Is that a fair way to read it?
I will not say we are comfortable, ticket size going down, we are very comfortable by sustaining the ticket size. We know by with, you know, cost of construction, et cetera, going up, there will be a slight increase in the ticket size, which we are fine with. You know, to where today at a book level 10.8 moving to 11.5 eventually, you know, doesn't bother me too much.
You know, the reason I'm asking all of this is your disbursement growth in the retail side or essentially the, in the, in the, in the core portfolio is almost 26%. On the home loans is almost 26% this quarter, which is obviously a phenomenally good number. I'm just curious as to, you know, what is it that has driven this and, you know, how should one think about it? I mean, it's something which I guess is way ahead of, probably, you know, your peers.
I would say two things, [Nishint]. One is, you know, just as a slight correction, we just do retail. Not on retail side, we just do retail. We don't do any corporate loans.
I mean, so, sorry. I was meaning home loans. Sorry.
Yeah. Yeah. Yeah. In home loans, yes, this quarter has been, there has been a 26% growth on home loans. I think it is also to credit should also go to the various government initiatives like PMAY. You know, we are the largest player in PMAY play today. Close to about INR 50 crore of our subsidies have gone to the consumers, about 15,000, 16,000 customers. I will come back to my emerging word again. You know, a lot of thrust and focus from the senior management on emerging is giving, you know, a little push on more home loans. That is also evident, that is point number two.
Point number three is I called out saying that for the last three quarters since the TARP issue happened, post that we've been really careful on non-home loans. The non-home loans you see a slight dip in the way the quarter-on-quarter non-home loans has moved. The teams still have to do business. They still want to meet their budgets and incentive structures. You know, home loans started coming in, which is good news. You know, higher the home loan, the better it is. With a clarification that we will want to maintain at about 70/30 in the medium term.
Just finally, this also means that there could be some small lever to your margins or basically yields if the, you know, if the emerging kind of loan book goes up.
Sorry, [Nishint], you'll have to repeat that, please.
No, no. This also means that there could be some small lever to yields if your emerging book goes up.
Yeah. Absolutely. The two levers that we have got to yields is obviously pushing more business in emerging B and C, one. Lab. The second lever is actually, as Rishi Anand said, LAP. If we can take the disbursements rates in a calibrated manner back to 28%-30%, that is a good %. Third is our overall strategy, where we tell, always tell that always have guided that self-employed business will, as a percentage of the AUM, will move towards self-employed. Our overall book will move towards self-employed by 1.5% every year. The more emerging B and Cs we, that we do, the more self-employed business that we will underwrite. I think this all works out to a slightly higher yield generating strategy.
Got it. Thank you very much. Thank you for patiently answering all the questions. All the best. Thank you.
Thanks, [Nishchay Sawade].
Thank you. The next question is on the line of Rakesh Kumar from BanyanTree Advisors. Please go ahead.
Yeah. Hi. Thanks, sir. The first question is, you know, with regards to the funding sources. Just wanted to know that in the last one year or so, like in this declining interest rate scenario, what portion of non-banking firms would have got repriced and to what extent?
See, a significant portion of our floating funds are only banking funds and NHB funds. NHB also approximately 50% of our NHB is fixed and 50% is floating. That NHB floating portion will always get repriced. It would have got repriced in the range of about 50, 60 basis points, if I'm not mistaken, NHB. In the terms of banking funds, I think banking funds, 1 sec, I'll just get the number to you. The banking funds would have got.
Okay. 96% fixed is good.
In terms of basis points, it would have got repriced by in the range of about 50 basis points.
The non-bank, so like from Q4 FY 2025 to Q4 FY 2026, we have a drop of approximately 80 basis points of interest rate, the borrowing cost number. Correct, no?
Sorry, come again.
The interest rate number for us, the diversified funding number.
that has fallen from 8.4 to 7.6.
That's right. That is the incremental cost of fund has fallen from 8.4 to 7.6.
Yeah.
which has been passed on to the banks to us is about, anywhere in the range of 70 to 75 basis points. It was not 50 basis points, it is 70 to 75 basis points.
If I take like 75 basis points and so basically 30 So out of this 80 basis points, 35 basis points, benefit has come from bank. That is what you're saying?
Yeah. The other way of looking at it is my exit cost of funds in last year was 8.14%, and the exit cost of funds in the current year is about 7.72%. That is the benefit of the entire book that has actually come through to us. We have passed on 15 basis points to the customers also.
No, passing on to customer is just like, the, this is a secondary thing. What I'm just trying to understand is that non-banking resources that we have, what portion of that can get further repriced and, to what extent? That is what I wanted to arrive at.
See, our NCDs is about 22% is our NCD.
Yeah.
NCDs typically are three-year, four-year NCDs which typically don't get repriced. These are NCDs are broadly fixed type of instruments. It comes to banks. Banks are 51% which gets repriced, which are all floating rate. NHB, as I said, 22% is NHB. NHB 50% is floating, 60% is fixed. NCDs will also include a small portion which will also get fixed. Typically, out of our NCDs, approximately 15%-16% will get 1 sec.
Okay.
Sorry, my bad. Out of the NCDs, 32% is floating and 68% is fixed. We have 22% of our overall portfolio borrowings is NCDs. Of the NCDs, 32% is floating and 68% is fixed.
Okay. Okay. Okay, sure. Sure, sure. Sure. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Thank you all for coming in, quite late, for this, for this call. I hope that we have been able to answer and manage to answer all your questions as per your expectations. If there are any pending questions, you can always reach out to Sanjay Moolchandani, our head of FP&A, and we'll be happy to answer these questions. Thanks, happy to meet again in quarter one of the next financial year. Thank you very much.
Thank you so much.
Thank you. Ladies and gentlemen, on behalf of JM Financial Institutional Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.