AAVAS Financiers (AAVAS IN) – Q2FY26 Result Update – Sustained disbursal run-rate a key – Accumulate
Published on 12 Nov 2025
AAVAS saw a good quarter led by better margins, higher fees & assignment income and lower opex. Disbursal growth normalized as guided and company expects run-rate in H2FY26 to improve to Rs6.5-7.0bn per month (Rs5.0bn in last 5 months); we had factored this run-rate which would translate to 17% AuM growth for FY26. While company has guided to medium term growth of 20% per annum, its larger size and competition for bigger HFCs to scale up affordable housing, could hinder credit flow or pricing. While AAVAS saw funding cost benefits due to EBLR linked borrowings, we are factoring lower NIM for FY27 (vs FY26) as downward asset repricing may continue in FY27. We tweak multiple to 2.6x from 2.8x and our TP slightly reduces to Rs1,900 from Rs1,925 while we roll forward to Sep’27 ABV. Retain ‘ACCUMULATE’.
