AAVAS

🔹 Operational Updates

🔹 Business Performance Aavas reported steady growth in FY25 with its assets under management rising around 18% year-on-year to over ₹20,000 crore. Net profit also increased by about 17%, supported by strong loan recoveries and controlled credit costs. The company continues to focus on small-ticket home loans in semi-urban and rural markets, maintaining a niche presence in the affordable housing segment. 🔹 Asset Quality and Financial Strength Asset quality remains healthy with gross Stage 3 loans around 1%, reflecting strong collection efficiency and prudent underwriting. The company has a comfortable capital adequacy ratio and low leverage, ensuring it can fund growth without major strain. 🔹 Operational Updates Aavas has been improving its operating efficiency by expanding its branch network and integrating more technology into loan processing and customer onboarding. The cost-to-income ratio has slightly improved, though it remains higher than some larger peers due to its smaller-ticket loan model. 🔹 Key Risks and Concerns Growth in loan disbursement has been slower compared to previous years, and management has guided for moderate AUM growth in the coming year. Margins have seen mild pressure due to rising funding costs, and return on equity has not yet returned to pre-pandemic levels. There is also some uncertainty after changes in major shareholder holdings, which the market is watching closely.