AAVAS Financiers (AAVAS IN) – Q1FY27 Result Update – Growth on track; margin pressure persists – ACCUMULATE
Published on 22 Jul 2026
Q1 disbursements saw a strong growth of 41% YoY while AUM growth remained healthy at 15% YoY. Commentary indicated an aspiration for ~22% disbursement growth and 18% AUM growth for FY27 by regaining market share in HL segment; we remain conservative considering high competitive intensity and build ~17%. Spreads are likely to remain under pressure in FY27 (<5%) due to competitive intensity and PLR cuts; however a diversified borrowing profile to support CoF. Despite seasonal uptick in credit cost, asset quality remains resilient with no visible stress across segments. Operating leverage through improved productivity, branch profitability and favourable product mix is expected to aid cost efficiency and support RoA. We increase our FY27/ FY28E estimates factoring a pick-up in growth and improved productivity. We value the stock at 2.1x (earlier 1.9x) with a TP of INR1,675. Maintain ACCUMULATE.
