Good morning, ladies and gentlemen. I'm Ikra, moderator for this conference. Welcome to the earnings conference call of Aptus Value Housing Finance India Limited to discuss its results for the quarter and year ended March 31st, 2026. This conference call may contain forward-looking statements based on the company's beliefs, assumptions and expectations as of today. These statements are subject to risks and uncertainties, and actual results may differ materially.
At this moment, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, please press star followed by one on your telephone keyboard. Please note that this conference is being recorded. We have with us today Mr. M. Anandan, Executive Chairman, Mr. P. Balaji, Managing Director, Mr. C.T. Manoharan, Executive Director and Chief Business Officer, and Mr. Sanjay Mittal, Chief Financial Officer. I would now like to hand the call to Mr. Anandan for his opening remarks. Thank you, and over to you, sir.
Thank you. Good morning, ladies and gentlemen. I am Anandan, Executive Chairman of Aptus Value Housing Finance India Limited. I warmly welcome you all to the earnings call. We are very happy to present that overall we have demonstrated resilience and robust business growth for Q4 as well as for FY 2026. You know, on Q4 2026, as you're aware, we saw a strengthening of our growth momentum, aided by ongoing process improvements and technology enhancements, alongside continued focus on credit quality. During the quarter, we delivered highest quarterly disbursements of INR 1,242 crores. This has come despite not sourcing any loans of less than INR 7 lakhs of [Inaudible] INR 7 lakhs.
Looking ahead, we expect further improvement in this growth trajectory driven by expansion in newer states, entry into newer states, Maharashtra and Odisha, and deeper penetration in existing markets, channel augmentation, higher average ticket size, calibrated lending rates on incremental loans and improved productivity. Going forward, we are very confident of maintaining a consistent growth of over a 20+ percentage and best in class ROE of 20%+ . With this, I'll hand over the mic to Mr. Balaji to take you through the business focus and key operating and financial parameters. Thank you.
Thank you, sir. Good morning to all. To begin with, I am happy to convey that we have delivered on our guidance across key levers, be it growth, spreads, costs, and credit quality, and will sustain this trajectory in the coming years. During the year, in line with our intent to onboard higher quality customers, we discontinued sanctions below INR 7 lakhs. While this decision led to temporary moderation and disbursements in Q1 and Q2, we rebounded strongly in Q4. We witnessed this growth momentum continuing in April 2026 as well.
This has helped set a strong foundation for sustained business momentum and reinforced alignment of field execution with our policies. Overall, the year reinforces our belief that affordable housing segment we operate in remains structurally robust and has strong potential for growth. Growth remains our key focus area. To accelerate growth momentum, we are executing a set of targeted high impact initiatives, the first one being geographical expansion.
We expanded our presence in the newer states of Maharashtra and Odisha in FY 2026 and strengthened our presence in existing states as well, leading to a branch network of 339. On account of encouraging indications from our new geographies and continued business momentum in our existing geographies, we are planning to open around 50 branches in FY 2027. The next one being increasing the average ticket size, partly driven by inflation, increasing our ATS is helping us onboard higher quality customers.
The next one being optimizing lending rates across segments. In line with our strategy to onboard higher quality customers and aid growth further, we have optimized interest rates on certain loan ticket size, leveraging the benefits from lower borrowing costs and improvement in productivity. As the rate reduction is only for the incremental customers, the impact on the spreads or the NIM is not very material. Fourth one is the connector channel. In addition to our digital channels, we have expanded our connector partnership across branches.
While this is still at a nascent stage, we expect this channel to evolve into a meaningful growth driver over time. Looking ahead, we expect to deliver sustainable AUM growth of 22%- 24% driven by these initiatives. Our growth is anchored on four strategic pillars. First one is diversified mix. The focus on self-employed customers across housing and business loans with strong presence in Tier 3 and Tier 4 towns. The next one is the geographical expansion, scaling beyond South into Maharashtra and Odisha while deepening the core markets. Productivity, driving higher output through data-led system-driven processes.
The digital excellence, leveraging technology across sourcing, credit and collections to improve speed, control and efficiency. Moving on to performance. Major performance highlights are as follows. First relating to business growth and scale, AUM grew by 21% year-on-year to INR 13,107 crore. Disbursement in Q4 FY 2026 grew 17% year-on-year and 21% quarter-on-quarter to INR 1,242 crore. Disbursement in FY 2026 grew 11% to INR 4,009 crore. Branch network stood at 339 branches as of March 26th, adding 13 branches in FY 2026. Coming to the asset quality. The collection efficiency stood at 100.5% versus 99.1% in the previous quarter.
The improvement in collection efficiency led to a dip in our 30+%- 6.21%, which was 6.48% in the last quarter. We closed FY 2026 with a GNPA of 1.52% as against 1.19% in FY 2025. The increase is primarily due to marginal increase in the NPA of NBFC. Net NPA was 1.15% as against 0.89% in FY 2025. The credit cost for FY 2026 remained at 50 basis points within our guided range. Coming to the profitability. During the quarter, net income margin grew by 24% year-on-year to INR 424 crores. Our spreads improved to 9%, driven by decline in cost of funds to 8.1%.
Our OpEx as a percentage of AUM remained at 2.8%. Profit grew 26% year-on-year to INR 261 crores, translating into an ROA and ROE of 8.2% and 21.2%, amongst the highest in the industry. The profit for FY 2026 rose by 26% to INR 943 crores. During the year, we have declared a dividend of INR 4.50, including the dividend of INR 2.50 that was declared in the Board meeting held on May 6, 2026. Coming to the funding. During Q4, we raised approximately INR 980 crores on a consolidated basis, primarily through a mix of NCDs, term loans and securitization.
Our liability profile continues to remain well-diversified, with 58% from banks, NCDs at 15%, securitization, including PTC and DA at 19% and the balance through NHB, which is at around 9%. We continue to maintain strong liquidity position with total liquidity of INR 2,057 crores as of March 26, including INR 1,505 crores of undrawn bank sanction, providing us ample headroom to support growth. With these remarks, I open the floor for the question- and- answer session. Thank you.
Thank you, sir. Ladies and gentlemen, we will now begin the question- and- answer session. If you have a question, please press star and one on your telephone keyboard and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question comes from the line of Rajiv Mehta from YES Securities. Please go ahead.
Yeah. Hi, good morning. Many congratulations on very strong number. My first question is on, you know, your Tamil Nadu state growth. There is a good revival and I think you've been speaking about it that you are trying to, you know, drive a revival there. Did anything change in terms of macro factor, in terms of demand competition and internally, you know, what changed in terms of team stability, team productivity, which drove, you know, good comeback growth in Tamil Nadu in this quarter?
If you look at Tamil Nadu, the year-on-year loan book growth is around 14%. We are, of course, we have made structural changes in terms of employing correct people and then retaining people in Tamil Nadu. Still in Tamil Nadu, attrition is slightly high, but still, we are able to retain people which, who are able to contribute to the business.
Having said that, in Tamil Nadu the competition is slightly higher. Since we are there in Tamil Nadu for last, for 15, 16 years, if anybody wants to open up, open a branch in Tamil Nadu, the first thing they do is to take people from us. Still because of various incentive schemes which we have launched and productivity-based improvements and monitoring systems, we are able to achieve this performance and, going forward, we are confident of getting this in place.
Now that 15- odd %, yeah, sequential traction that we saw, which was very solid, the momentum is now structural in nature, right? That's what you're trying to indicate.
Yes.
Yeah. Sir, what is the incremental ticket sizes in home loans and large quasi-home loans that we are now onboarding and what is the incremental lending rate? In the future, how do you see the ticket size, you know, progress? You know, for us, which will help us in, you know, delivering better growth over the volume.
Strategy on the average ticket size, whether it is the housing loan or quasi-home loan or small business contract, every year we want to increase this by INR 1 lakh. This is partly driven by inflation, and also, it helps us onboard higher quality customers. This is broadly the plan, and we'll be able to hopefully achieve this because the field executives and the branch managers are also aligned to this. That is what will be implemented.
Got it. Sir, can I just ask one last question?
Yeah.
Yeah. In terms of channel augmentation, I mean, when you say channel augmentation, engagement with the connectors and all, one is connecting more branches with the local connectors. Where are we in, you know, in terms of that, you know, setting the connection of, you know, branches in terms of number, how many branches will then have connectors network to go to for sourcing? How do we better engage with the connectors so that we get better volume in the local market?
In relation to channel augmentation, there are two things which we are pursuing other than the organic leads that is being generated by the sales officers. What is happening, one is the digital channel, basically the referral app, the customer referrals, the construction ecosystem referrals, and also the digital social media. That is one thing which we are doing. Over and above that, what is, we are also pursuing this connector channel.
This connector channel will be an additional channel over and above this organic lead that is getting generated by the sales officers. Every branch manager has been assigned the responsibility to recruit connectors, and they will be driving the connector channel. The leads that are coming from the connectors will be passed on to credit and for other for further processing from the branch manager point of view, and that will be pursued. That's the plan we have, and we launched this sometime in January, and the traction is very good and hopefully this will get converted into a good channel augmentation process in the coming year.
Thank you so much. Best of luck.
Thank you, Mehta.
Thank you. Next question is from the line of Kunal Shah from Citigroup. Please go ahead. Mr. Shah, your line is unmuted. Please proceed.
Yeah, thanks for taking the question. Two questions. One is on the collection efficiency side. Generally, like Q4, we see a strong buildup. We have crossed 100%, still lower than past two years in Q4. Is it like there is still maybe, obviously we have put in a lot of efforts on the collection, in any of the regions or profile, are we seeing a relatively slower recoveries?
That's the first question. Secondly, on the off-balance sheet item. We have seen the off-balance sheet proportion going up. To that extent, when we look at it on the off-balance sheet side, what is the kind of scale-up? Like, last time you indicated, to get towards 6%-8%, we have already crossed that. Will we take the off-balance sheet proportion further up, rather than pure, on-book AUM? Yeah. Thanks.
The first thing on the collection efficiency, this is this 100.5%, as you rightly said, this quarter saw good collections and this actually worked well. If you look at the area-wise thing, Karnataka, there are small issues in the sense that there are issues in collection, which we are trying to sort out through strengthening the collection system there, like recruiting more people and recruiting more monitoring people and there, that kind of a thing. Other than that, we are not finding any other place.
Just to add, as a collection, there are on a product-wise basis, if you look at it, you know, around 2/3 our portfolio is in the HL and about 1/3 in the NBFC business. In the NBFC business, the color is just slightly, you know, it's cycling lower. In fact, even in the NPA, gross NPA, net NPA, the NBFC related business, you know, while the total average it is 1.5% or 1.52% gross NPA, the NBFC related, non-home related, it is slightly higher, about 20 basis points, 30 basis points higher. The HL related portfolio, it is lower.
Not only in the gross NPA, net NPA, in terms of even the collection, you know, field collections also slightly lower in the NBFC related business. That we have recognized and we have strengthened because of the growth potential and the margins, in the NBFC business, you know, given the, you know, the credit cost also been fully factored in, that we are really strengthening our collection staff, particularly in that product segment.
That is in terms of the product mix-wise. Geography-wise, yes, as Mr. Balaji said, Karnataka is an area where the collection percentage is slightly lower than the other geographies. We are really very focused. In fact, our business growth also, we are in fact number of branches and the business growth and the strengthening of the collection staff is really happening in that state. We understand, you know, this is generally the scenario for some of our other competitors also. The collection in Karnataka is slightly different that we are really focusing on.
Perfect. Yeah.
Yeah. Now coming to this off-book. Off-book, I think you are meaning the direct assignment.
Yeah, assignments.
We have got a clear policy on this Direct Assignment. First, this is being done for the non-housing loan book, and this is also when you do that, the principal business criteria on the housing finance company improves. And also this we are managing it through a asset liquidity management tool. If you look at the Direct Assignment, we did around INR 170 crore-INR 180 crore in this quarter.
And this absolute value of INR 160 crore-INR 180 crore will be maintained every quarter. And if you as a strategy, we might not want to go beyond 10% of the total AUM at any point in time. Currently it is at around 5%, the DA deal done. This is the plan we have on the DA, and going forward also this will be monitored and taken care of.
Yeah, Kunal, just to add, you know, in the current year, we have done about INR 700 crores of joint assignment, off-balance sheet as you call. Over a total disbursements of INR 4,000 crores, it is coming about, you know, 16%-17% as a percentage of disbursements. If you look at the loan book and INR 700 crores on the loan book of INR 13,000 crores, it comes about 5.6% or so.
Going forward, as a percentage of the loan book, as Mr. Balaji mentioned, it will be around 10%, which as you know is much higher than our comparable company. Much lower, sorry, much lower than other comparable companies, you know, in the, you know, within the, in our space. Going forward with off-balance sheet, our joint assignment will be there, but within the, you know, guidelines, within the specific, you know, percentage that been approved by the Board.
Got it. Perfect. One more question if I can squeeze in.
Yeah, yeah, please.
On spreads, we saw 10 basis points increase. That's particularly the funding cost advantage. Do we see the funding, any repricing benefits still left or it's largely done? Okay. Obviously our portfolio on the fixed side is much higher, particularly on the lending side, so that's also helping them. Here on, how should we see the traction on spreads?
If you look at it, we have been, our incremental cost of funds in the housing finance is around 7.8% and or 7.9%, and in the NBFC it is between 8.2%- 8.3%. I'm not seeing any reduction from these rates in the coming quarters. There is a likelihood it can only result in slight increase as well. This is on the cost of borrowings. Of course, since we have also calibrated some incremental lending rates on some of the housing loan ticket sizes, there can be a slight drop in the yields as well. We have already worked it out. The impact on the AUM on terms of yields will be around 0.1%.
We are planning to have the same rate of borrowings, which is currently at around 8.1% in the coming year as well. Even if assuming if my incremental cost of borrowings is going to go up by, sorry, 0.2%, what will happen is the total borrowing cost will increase by 0.08%. The net impact on the yield will be around 0.18%. This is what has been factored in in our business plan as well for the next year. Going forward, this will be the thing which we have projected.
Perfect. Yeah. Thanks. Thanks, and all the best. Yeah.
Thank you.
Thank you. Next question is from the line of Danish from ICICI Securities Limited. Please go ahead.
Yeah. Hi, sir, and congrats on a good set of numbers.
Yeah. Hi, sir. Thanks.
Just two, three things. One on the disbursement yield side, right? In FY 2026, you know, there has been a couple of changes we have made to our pricing. One of course is the discontinuing disbursement below INR 7 lakh ticket size, which I am assuming should be more than 20% yielding product for us. Also, as you already mentioned that, we have calibrated rates in some of the ticket size. Net-net, when we look at the book yield, which is, you know, closer to 17- odd %, how the disbursement yields are trending, let's say, over two, three, last two, three quarters, especially post exiting below INR 7 lakh ticket size?
If you look at, Danish, since till December, we have not changed any rates. Okay? In January, we have just reduced the interest rates for the housing loan customers alone, this only for the housing loan customers. Because of that, in Q4, the disbursement yield dropped by around 0.1%. Okay? Going forward, in the month of April also, we have slightly calibrated on the interest rates only for the housing loan, that too on certain ticket sizes. In the coming year, the likely impact on the disbursement yield is likely to be at around 0.1%, 0.15%. On the loan book, it is going to be around 0.06%. This is broadly the plan. This is what we have done as of now.
there is no impact of, you know, we exiting, below INR 7 lakh ticket size on the yields, yet?
No, that is not actually playing out.
Okay.
The yields which we were charging less than INR 7 lakhs or greater than INR 7 lakhs were never different earlier.
Okay. Okay. Okay. Okay. Got it. Got it. Sir, secondly, you know, on the profitability front, right? Obviously Q4 ROE looks very strong at 21- odd %. Going ahead, what kind of a sustainable ROE you expect, you know, the way our AUM mix might evolve over next two to three years, you know, in terms of better quality, slightly lower rate, etc . How do you see overall profitability trending over the next two to three years?
If you recast the ROE which is currently now and then, extrapolate it for the reducing lending rates and also the slight increase in the credit cost, I think the impact on the spread is likely to be around 0.15%-0.2%. Correct?
Correct.
Even if that, if that is, hopefully we'll be able to compensate it by way of productivity and also maybe a slight reduction in the OpEx, which can happen or which might not happen. Even if assuming the OpEx is likely to be at 2.7% and credit cost, even if you are taking from 0.5%- 0.6%, I mean, on a hypothetical side, still my ROEs and ROAs will be, ROA will, because of leverage can come down, but ROEs will be much above 20%. This is, we have actually planned it this way for the next two years as well. Definitely we are very confident of, as Anandan told, 20%+ growth, sustainable 20%+ growth and a sustainable 20% ROE. That is what is addressed meant for.
Sir, just to add, actually our ROE is progressively going up during the last four, five years, if I recall. We've sort of improved from about 14% progressively. Now it has, in fact, a milestone in the fourth quarter. We are really crossed 20%. Actually, in fourth quarter, if you see, it has really touched 21%. ROE, which you are aware is the best in class in ROE return. We, you know, we very firmly believe, our, you know, economic value add, value creation is as important as the growth.
While we will continue to pursue strong business growth, but same time, we are very conscious of the, you know, the financial metrics, particularly the economic value add and ROE as well. That's why we work very consciously. We've been working on it last four, five years. Going forward also, there is enough strengths have been built into the company to sustain this rate. In fact, if not improving the rate further.
Got it. Got it. Sir, just last question on the borrowing mix side. You know, we saw NHB borrowing, you know, coming down all the way to 9- odd% versus 15% previously. Just wanted to know, is there any particular reason why there is a lower NHB drawdown in FY 2026 and in 2027?
No, actually, Danish, I mean, for the last year, we didn't borrow from NHB because we were able to get better cost funds as compared to NHB. That's why we went for the other sources. Having said that, we have already filed an application for a INR 500 crore refinance ability from NHB, and hopefully that will come in another two, three months. The banks will come, so we'll be drawing that. Actually the specific reason is we had better borrowing sources which was actually the cost of that was less than the NHB borrowing.
That's why we went for the other thing. Now that NHB has also reduced their prime lending rate and they are able to give us a better rate, we'll be getting into this NHB borrowings as well. Going forward, I mean, if you look at our book also, it is almost 82% fixed. NHB borrowing, if it comes to us, it will be on a fixed rate basis, which will help manage my interest rate risk as well.
Got it. I was just about to ask you that only, sir. In case, let us say in FY 2027 the NHB borrowing share goes up to, you know, 50% more , then ideally that should help us, you know, keeping borrowing cost even at current level, even, let us say the interest rate goes up. I mean, is that a fair assumption?
It's a fair assumption. If you are building in a business plan, it's better you build in a 0.2%.
Yeah, of course. Of course. Let us say that should be upside risk.
Yeah. Yeah.
Okay. Okay, sir. Thank you and best of luck.
Thank you.
Thank you. Next question is from the line of Mayank Mistry from Antique Stock Broking Limited. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity and congrats on a good quarter. Sir, my question is mainly, first of all, on the branch expansion side. You said you will be expanding 60 branches and largely coming in from new geographies. Can you quantify, sir, and how much could be from new geographies?
Secondly, also, now that you are comfortable in both of these geographies, like Maharashtra and Odisha, in terms of expansion, are you exploring any other geography sooner, maybe within a year or maybe within next couple of years? You know, because right now it looks like it is pretty skewed into fixed rate. I understand that you have been proficient enough in, you know, going deeper into geographies, but, yeah, it still leads to a concentration risk. Any comment on that part?
Yes, Mayank. We are well aware of that's why we have stepped into these new geographies. If you look at it, the plan of opening 60 branches, 30 branches will come in Maharashtra and Odisha. The early plan. The balance will come in [Andhra Pradesh] and Telangana. If everything goes well, we have also recruited a senior person taking care of the Maharashtra, who has got experience of handling and building a business in MP and Chhattisgarh as well. If everything goes well, maybe we might open one or two branches in the other states as well. It will depend on how the whole expansion plan progresses. The thought is there to get into the new state, it will be done at the appropriate time.
On a contiguous.
On a contiguous basis.
Sure, sir. On the borrowings mix side again, you know, your securitization mix has significantly increased in this quarter. What must be the, you know, differential you must be getting in doing securitization as against NCDs which have actually gone down this quarter?
Actually, securitization mix has not gone up. It is actually 11%. If you look at, in the earlier presentation, we didn't include DA as the source of funding in the pie chart. That's why if you, if you look at it, 11% and 8% is the DA, and that's what it's come as on the total borrowings. If the securitization is still at 11%, last time also it was around 10%-11% mix only. Securitization also helps us in terms of to raise the longer tenure debt. Compared to the other debt, the securitization also carries slightly longer tenure than other sources.
Okay. sir, what will be the, if you can, give us a interest rate on, you are getting on NCDs?
I didn't get your last question.
The cost of funds of NCD, from NCDs.
From NCD it is around 6%, 8%. I mean.
Yes, yes.
I mean, we have done a securitization deal in the NBFC in Q4 at 8%. That is the borrowing rate. I mean, NCD is slightly 8.1%, 8.2%. The duration is longer. Duration is also longer. Yeah.
Okay, sir. Thank you.
Thank you. Next question is from the line of Dhrisan [inaudible] from Kotak Institutional Equities. Please go ahead.
Hi. Thanks for taking my question. You know, just a small one. If you could give some color of the incremental disbursement that you have done in this quarter. You know, how would the disbursement growth, let's say, break up between, you know, salaried and self-employed? I think if I just look at the overall business mix change on a quarter-on-quarter basis, there seems to be a fairly sharp swing in favor of self-employed from salaried. If you could give some color on that would be helpful.
No, it is that it, I mean, the self-employed is around 78% and 22% is the salary. On a, on a overall basis, that will still be continued. That is, that is the philosophy we have, and that will continue, Dhrisan.
Okay, sure. The presentation actually says that self-employed is 80%. Maybe that is where I think.
Salary is INR 80. Yeah.
Okay. Okay. Okay. Sure. And the mix in your view, sort of, you know, broadly doesn't change.
Yeah. Yes.
Sure. The stress is probably more geographic rather than sector specific is what one is reading.
Yes. Absolutely. Yes. Yes. Yes, Dhrisan.
Got it. Just one small one is on the operating leverage side, right? I mean, in terms of cost to AUM ratio. If I look at this number every year for the last three years, it's been coming down. It's probably inched up a bit in FY 2026. That's kind of, you know, getting reflected in higher employee payouts. How should one think about it and how will this trend up? I mean, how will this trend going forward?
If you look at the overall AUM to cost to AUM, it is around 2.7%. Last time it was 2.6%. Our guidance has always been to maintain between 2.6%- 2.8%. Of course, the reason why this year there is a slight increase in the cost is, first of all, the disbursement was an all-time high in this quarter, so there was more employee.
New branches also. Employee payouts and that kind of a thing. New branches were also open, 39 branches, so to that extent, there was an absorption in the cost. The third one is, we have also increased the IT spend in terms of the security and also, the way we do business. The ZIVA which we launched in April 2024 has been evolving and it has settled well.
Every time when a new thing like account aggregator or when we are talking to Unified Lending Interface introduced by RBI, we are able to see the digitization of land records in some of the states. Those are some of the things which we are spending, that is actually an investment for the future, though it is getting absorbed as a cost now, but it is going to bring in lots of process improvements in the coming years.
Got it. Just one more. I think on the credit cost side, what is the guidance that you have shared?
Currently it is around 0.5%. We want to have a 0.5%, ± 10%, 0.1%.
Got it. Thank you very much and all the best.
Yes, sir.
Thank you. Next question is from the line of Prithviraj Patil from Investec. Please go ahead.
Yeah. Hi, thanks for the opportunity. I just wanted some clarity on the AUM mix. If I look at our spreads, they have increased 10 basis quarter-on-quarter. I just want to know, have we Like, there's a uptick in the self-employed segment and the LAP segment. I just want to know, is that contributing to the recent spread or is there a benefit on the cost side?
It is basically because of the cost of funds has come down from 8.3%- 8.1%. That's the benefit that has flown into the whole thing.
Okay. Okay. It's not because of the AUM mix, right?
No, not because of AUM mix.
Okay. Thank you.
Thank you. Next question is from the line of Sonal from Asian Market Securities. Please go ahead.
Thank you for taking my question. Sir in your earlier comments I heard that, you know, this year we've seen some issues with NBFC and that is where the credit cost has gone up. Now when I compare your consolidated, you know, macro provision to standalone macro provision, I see that, you know, it-
You're not hearing me properly. very small.
It's okay.
You have to hear me clearly.
Is it better now?
Just continue. We'll see how it progresses.
Sure. When I look at your standalone and consolidated macro provisions, at least for the quarter that I'm seeing that on a consolidated basis, the credit cost is somewhere INR 30 crore-INR 50 crore and on standalone for INR 20 crore. Even if I look at the trend for the full year, it seems that co-lending and the credit cost is higher in the housing portfolio as compared to NBFC portfolio. If you could just tell exactly where is it that I'm looking because in your earlier comments you said that the issue was more on the NBFC side.
Right. I'm sorry. Yeah, you contact me personally, I'll tell you because I'm not able to hear you properly. Yeah?
Sure.
Yeah. Very small.
Thank you. Next question is from the line of Shreepal Doshi from Equirus. Please go ahead.
Hi, sir. Thank you for giving me the opportunity and congrats on a good quarter. My question was on repayment rate and BT out. What is that for us in terms of this quarter versus last quarter? What strategy do we have in order to let's say retain a customer especially when the rates are so much different versus our peers? Because our peers have seen this rate moving up and down, there has been volatility there, but for us it's been much more stickier at 15%, 16% sort of a number on the repayment rate, on the repayment rate side.
First of all, if you look at the pre-closures, it is around 7%-8% of the total AUM. Okay. 7%, 6%, 7%. Okay. Of that 7%, almost 65%-70% of our customers, when they come and close the loan, it is out of their own funds. The balance only 2% gets transferred to the other companies. We have been maintaining this, we have been observing for the last 10 years.
This has not changed at all. Basically this is not the interest rate which is playing a part. It is basically the type of customers whom we are serving. When they have some surplus funds, the first thing they do is to settle the loan rather than keeping it alive. Definitely the balance transfer is around 2%-2.5% and that's still continuing. As of now, that's not being looked at very as a threat.
You know, actually we don't see any significant challenge in the BT to other financial institutions. That is only about one third of our total pre-closure. Two third really money coming from our customers themselves out of their savings and you know, if at all they're closing, they're closing out of their money. The actual loan transfer from us to the other financial institution, it is only around 2.5%, which has been there, you know, for quite some time, almost eight, 10 years. That way our BT to the other financial institution is, it's not, you know, it is something, it's normal and it's nothing abnormal. We are not observing any abnormal trend in that.
Got it. Just a follow-up there. Like while at book level you are indicating 2%-2.5%, what if you could give some color specifically for each product, would it be the similar or it would be, let's say closer to 4% or 5% sort of a BT out number with respect to other players acquiring our customers?
No, actually we have seen this analysis across the product. It's the same. We are not seeing that kind of a difference. Yeah.
Got it, sir. Got it. Thank you. Thank you so much for answering my question.
Thank you. Next question is from the line of Raghav from Ambit Capital. Please go ahead.
Sir, hi, good morning, thanks for the opportunity. Am I audible?
Yes, Raghav.
I just have one question, on your assignment income, maybe the CFO can answer this better. See, when I look at your assignment gains as percentage of the off-balance sheet loans or assigned loans, that's 28% for this quarter and about 42% for the full year. When I compare this to peers, the number is more like 8%-10%. I think, you know, when the bad books build up or, you know, when you increase the, when you scale up this assignment book, the numbers which are 28% for the quarter and 42% for the year should normalize downward for you.
I just wanted to get some sense that for FY 2027, 2028 or going ahead, if you can give us some guidance as to how these assignment margins will look, because right now they are contributing a lot to your profits. As your margin normalizes downward, that's a risk to your ROE guidance or, you know, generally, it would not contribute as much to the ROE as it is contributing today. I just wanted to get some sense there.
Raghav, if you look at our DA that is being done, we are doing it for the non-housing loan book.
Absolutely.
Largely non-housing loan book, where the yields are around 17%, 17.5%. If we are going to do a DA deal at, say, 8% or 8.1%, the spread is so high, and that is what is getting recognized as the upfront income. This is what will, this is what it will continue. Having said that, we have booked, I mean, for last year there was not much DA. This year there is a DA, and next year it will be the same. That the same momentum will continue. There will not be much impact because of this on the ROE or ROA. To clarify, the range of upfront income will be in between 25%-28%, what you have actually calculated. Because of our larger tenures and because of the yield-
Right.
-yield and spread, the upfront income will be in that range, around 25%- 27%, 28%. Yeah.
Got you. You know, the way that I understand this is that as your, you largely upfront the future income, right? You discount it to the present value and then we recognize it on the P&L. Next time when you do the direct assignment, the income from the back book will not be available. It will only come on the newly assigned loans. In the denominator, in the base, you will still have the back book, right? Ideally, the margin should come down. Shouldn't it play out that way? I'm just trying to understand.
No. We are, this 25%- 28%, what we are saying on the incremental DA what we are doing.
Okay.
That means, I mean, that's guided percentage of 25%-28%.
Correct. You're saying 25%-28% is on the incremental DA that you're doing-
Yes.
...going forward-
Yeah.
...as your outstanding book builds up, this margin should come down, ideally. Is that the correct way to think about it?
Margins will not come down anyway. Raghav, if this is specific question, I'll come back to you and we can talk. I'll call you up after the call.
Sure.
Maybe we can understand the numbers, and then we'll work it out. Okay?
Sure. Sure. That was also my thought.
Yeah.
Thank you. Next question is from the line of Krishan Parekh from Morgan Stanley. Please go ahead.
Sorry, am I audible now?
Yeah.
Thank you for taking my questions. I just had one question. Basically, in our opening remarks, we mentioned that you'll be looking for better quality customers and we have optimized rates as well for these customers. We see some impact on the loan spreads in the next term. If you could help us get a more holistic picture, I mean, in the sense like, you explained how you see the impact on the yields. How should this benefit us on the productivity side as well as on the credit cost side at the same time?
Net-net, what is the impact that you see of moving this to this better quality customer on our overall profitability? As well as, if you could give us a small picture of essentially this, I mean, how what is the difference between your current customer and this new customer that you're chasing? I mean, are they very different kind of cohort, or it's the same cohort and we should expect similar behavior from this customer as well? Yeah.
Krishan-
Okay.
...I'll try to answer whatever I was able to get from your question. Otherwise I can talk to you separately. First thing is, if you look at the last year we have taken this call to stay away from less than INR 7 lakhs, and then less than INR 7 lakhs.
Right.
Less than INR 7 lakhs, that has actually contributed to the better quality in terms of collection efficiencies and everything. Okay. Now, if you look at the disbursements that has been done at a higher ticket size, the collection efficiencies are very high and the bounce rates are really low. We are able To that extent, the collection team's effort or the sales team effort of going to the field and collection is minimized. So that those are all the benefits that are coming because of this higher ticket size disbursement. Going forward, that's what we will be concentrated upon.
Understood. That was helpful. If you could just help us understand, I mean, from a customer, profile perspective, between a current customer and this, new higher ticket customer, I mean, how much of a step-up is it?
No, the profiles are the same. It's basically the house funded will be slightly higher cost. Because of this And of course, we have gone into this higher ticket size because of inflation also, right? It is basically the profiles of the customers are the same.
Yeah. The profile wise also, you know, the credit bureau data, account aggregator data will be, you know, slightly better there, you know, for the higher ticket, you know, customers than the customers with the loan profile of less than INR 7 lakhs. Because we would want to be very clearly away from the microfinance type of customers.
You know the average size of the microfinance will be between INR 2 lakhs- INR 3.5 lakhs. We'd at least want to be at least INR 2 lakhs away from it. Which means that one is really looking for a better, you know, profile, better background customer, better financial background customers and better income earning of profile customers. Which is evident, particularly credit data now also is getting strengthened. Account aggregator data is available.
Also this, recently introduced, you know, the ULI, opens up lot of data kind of thing. We are using this data to improve our underwriting standards and through that look for, you know, better customers, without really not increasing much risk because if the customer is going to be from an average INR 9 lakhs to an average INR 10 lakhs, while percentage of is also over 10% an improvement in, you know, eight years.
Actually in terms of the, you know, INR 1 lakh more loan, it doesn't really change the inherent risk of the customer. In other words, we would really progressively, in fact, it is not really, you know, it's really to cover the inflation cost of the construction itself will be needing it. That way, obviously there will be, you know, change. There will be the slight improvement in the profile of the customers also to an extent.
Understood. Thank you.
Thank you. Next question is from the line of Pawan Kumar from Edelweiss. Please go ahead.
Hi. Sir, thank you for the opportunity and congratulations on really good set of results. Am I audible?
Yeah.
Yeah. Two questions. One question is regarding Tamil Nadu. You mentioned Tamil Nadu is seeing very high competition and competitors approaching your employees. Is this because of very high penetration in terms of affordable housing finance or LAP, and the field staff finding it tough to meet the targets because, you know, there are not enough customers who are looking for these and that is leading to high attrition?
The same thing is visible even in the quarter-on-quarter AUM growth in Tamil Nadu. The Tamil Nadu, Karnataka numbers are slightly lower than that of AP and Telangana when I compare QoQ growth in Q4 FY 2026 that are same with Q4 FY 2025 numbers. That's one part of the Tamil Nadu equation. Second part is like, you know, the temperatures are much higher this year. Similarly, elections are also gone through. Do you see higher credit cost impact in Tamil Nadu, particularly for this particular quarter Q1? Also, are there any local issues in Tamil Nadu? That's one question, sir. Second question is.
I'll answer the second question first.
Okay.
Actually, elections were there. Of course, the temperatures are also rising. We are not seeing impact because of that. The credit quality.
Actually, the election data indicates better-- better in Tamil Nadu than other Tamil Nadu.
That is what is the situation. As regards the growth is concerned, I think this 14% is a decent growth in Tamil Nadu considering the base. Also we have been successful. Of course, the competition is there, we have been successful in retaining good people who are actually contributing to the company. To that extent, we are successful, that is why this growth is coming in.
While the competition intensity is much higher and with people poaching with other companies poaching by some us, we are also sprucing up our retention scheme, insurance coverage schemes and etc , so that people are more aligned to Aptus and then they are able to contribute towards the growth of the company. As of now, we are not seeing that kind of a big problem, but the competition is intense.
Also we are adding new branches only in states like Telangana and Andhra and the newer markets like Maharashtra and Odisha. The new branch addition in Tamil Nadu that way is not much. Whatever that growth is coming is largely out of the existing branches only.
Yes, sir. Is that because like penetration being very high, like Tamil Nadu is much more advanced state compared to AP or Telangana, either in terms of income or HDI, whichever parameter that you take. Has it reached a certain level of, you know, of own housing and then, you know, new customers are hard to come by?
You know, the market still a long way to go. There is, I mean, the overall terms, the demand is not the issue. It's only, you know, because Aptus has become known to be, you know, a leader in the affordable housing space, generally in South India, and more so, much more in Tamil Nadu. Any new competitor from West or North wanting to open a branch, first they would want to look at, you know, our staff and because our name and reputation. That, you know, does create an issue on a very short-term basis, but that's being addressed by Aptus. As Balaji said, we are progressively, you know, getting back. You know, we want to increase this 14%, what you said, growth rate also to further better going forward.
Got it. Second question. Like, you have guided for 22%-24% AUM growth, right? That's approximately INR 16,000 crore growth. Assuming the same run-off rate, which is principal repayment plus BT out at same 16% of starting AUM, you need to do about, like, INR 5,000 crore-INR 5,100 crore of disbursements in FY 2027. It's like an average of 370 branches, like 340-400 that you grow, average of 370 branches.
That comes to monthly disbursement rate of INR 1.15 crore. That's about 10% growth. If I look at the last three years, it's been same at INR 1.06 crore or INR 1.05 crore per month disbursement per branch. Even if I look at the Q4 numbers, it's like INR 1.23 crores per month over INR 1.19 crores last year, same quarter. You said that, you know, the ticket sizes will increase by INR 1 lakh, 10%. Is that the main growth, the ticket size growth, but the customer addition is going to remain same as what we have seen so far? Yeah, that's the question.
There will be customer growth, as been given in the presentation also. There is year-on-year customer growth. You know, the growth will come as been explained, growth will come out of new states, out of the existing new branches of the existing states, out of channel comprising of the customer app, Aptus E-Seva, and, you know, digital app channel, and which is augmented further by the, you know, connector channel. It is just not, you know, and the data that, you know, looking at what is the past in terms of, you know, disbursement per branch of the past data. There are a lot of actions being initiated in the current year, more so in the last two quarters.
This is reflected in the post fourth quarter in terms of substantial growth in disbursements. With, with several actions, including new branches, new states, branches, ATS, the, you know, new channel and optimizing certain, you know, rates. Several actions are being taken. It's not just one. They are tracked. They are tracked. We have a strong MIS to track what is the growth coming out of each segment. And we believe that's the basis on which we are indicating the kind of growth that we are confident of pursuing.
Okay. Sir, just to ask this in a different way. Now that the PMAY 2.0 is also kicking in, the BT rates will go down. How confident are you that you will deliver this 22%-24% growth that you have made it for?
PMAY 2.0 is for the urban kind of customers. Still they have, I don't think this PMAY has come into the rural scenario. For our kind of customers, the PMAY co-coverage will be very minimal. This is not going to impact much for us. If PMAY rural comes, we need to look at the amount of subsidy that is coming into that, because PMAY 1.0 Rural subsidy was very less. We need to look at that at that point in time when it is getting launched. As of now, PMAY will not have any impact for Aptus.
Okay, sir. The confidence on the 22%-24% growth rate is very high?
Pawan, I think we have worked out various strategies to get to this INR 5,000 crores, and that is why we are giving this guidance. Hopefully we'll be able to maintain that.
Thank you so much, sir. That's very comprehensive, and wish you all the best.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the call over to the management for closing comments.
Yeah. Thank you. Yeah. Thank you everyone for attending the conference call. I would like to pay my sincere gratitude to all the analysts and investor friends who have taken time out to listen to us today. Please feel free to contact us if you have any further queries. Thank you.
Thank you very much. Thank you all for being a part of the conference call. If you need any further information or clarification, please email investorrelations@aptusindia.com. Ladies and gentlemen, this concludes your conference for today. Thank you for using Chorus Call conferencing services. You may now disconnect your line. Thank you, and have a pleasant day.
Thank you.