Aptus Value Housing Q2 FY27 Earnings Call: Maintains 22% AUM Growth Guidance, Credit Cost Hits 70 Bps

Aptus Value Housing Finance India Ltd held its Q2 FY27 earnings call on November 04, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Solid Headline Print, But Cracks Emerge in the NBFC Book

• AUM crossed Rs.14,177 crore (+20% YoY) in Q2 FY 2026-2027, with first-time separate segment disclosures: HFC AUM crossed Rs.10,000 crore and NBFC AUM ~Rs.4,000 crore.
• Net income grew 19% YoY to Rs.463 crore and profit grew 18% YoY to Rs.267 crore in Q2 FY 2026-2027 (RoA 7.7%, RoE 20.1%); H1 FY 2026-2027 profit grew 19% YoY to Rs.528 crore.
• Spreads moderated 10 bps QoQ to 8.9% in Q2 FY 2026-2027; OpEx at 2.8% of AUM sits at the top of the FY 2026-2027 guided range of 2.6-2.8%; FY 2026-2027 profitability guidance unchanged with RoE above 20%.
• Collection efficiency slipped to 98.35% (from 98.52%) and 30+ DPD rose to 7.08% (from 6.87%) in Q2 FY 2026-2027, impacted by moderation in NBFC collections; consolidated GNPA at 1.68% (vs 1.7% in Q1 FY 2026-2027).
• Board approved an interim dividend of Rs.2 per share; management said it has no plans to accelerate the dividend payout.

22% FY27 AUM Guidance Rests on a Strong H2 Catch-Up

• H1 FY 2026-2027 disbursements grew 27% YoY to Rs.2,206 crore; Q2 FY 2026-2027 disbursements grew 20% YoY to Rs.1,153 crore.
• Management is confident of 22% AUM growth for FY 2026-2027 despite flagging a possible slight dip in Q3 FY 2026-2027 disbursements from tightened NBFC underwriting and weather interruptions; it expects to catch up the deficit in Q4 FY 2026-2027.
• Citigroup's Chintan Shah flagged the implied H2 load — the FY 2026-2027 guidance implies ~Rs.2,800 crore of disbursements in H2 FY 2026-2027 versus ~Rs.2,200 crore in H1 FY 2026-2027; management cited seasonally stronger H2.
• Branch network stood at 397 after adding 58 branches in H1 FY 2026-2027; management is on track for the FY 2026-2027 target of ~70 branches, with 60 new branches expected to contribute over Q3-Q4 FY 2026-2027.
• Connector channel contribution rose from 8% in Q1 FY 2026-2027 to 12% in Q2 FY 2026-2027; the drop in customer referral + Bandhu app contribution from 19% to 11% reflects some Bandhu partners being converted into connectors, per MD P. Balaji.
• Average ticket size increase of at least Rs.1 lakh vs FY 2025-2026 is being pursued and expected to contribute to FY 2026-2027 growth.

Credit Cost Breaches Guidance; Management Acknowledges Delivery Gap

• Consolidated credit cost hit 70 bps in Q2 FY 2026-2027, up ~20 bps YoY and above the FY 2026-2027 guided range of 0.5% (±10 bps); split: housing finance ~0.23%, NBFC ~1.6-1.7%.
• NBFC GNPA rose to 2.17% in Q2 FY 2026-2027 (from 1.59% in Q2 FY 2025-2026, though down from 2.49% in Q1 FY 2026-2027), with NBFC Stage 2 at 6.88%; the HFC book improved, with GNPA at 1.48% vs 1.53% in Q2 FY 2025-2026.
• Executive Chairman M. Anandan acknowledged the company has not fully delivered on the NBFC credit-quality improvement promised in Q1 FY 2026-2027; analyst Ankur Shah (Croser Capital) called the 70 bps spike a surprise given consistently maintained guidance and asked whether guidance should be structurally revised higher.
• Management guided to a further 5-10 bps increase in credit cost (period unspecified), factoring in elevated NBFC overdues; NBFC overdues are expected to take at least one to two quarters (through Q3-Q4 FY 2026-2027) to streamline.
• Stress is concentrated in ticket sizes below Rs.7 lakhs; Karnataka is the specific geography witnessing higher delinquency, where underwriting norms are being strengthened.
• Vintage tracking over the last 30 months across FY25, FY26 and H1 FY 2026-2027 shows significant improvement in the NBFC portfolio, per Anandan, but loans originated prior to April 2024 are taking longer than anticipated to resolve/recover; collection and legal recovery teams have been strengthened.
• Management defended the housing book — Balaji rejected the premise that Aptus is "going wrong," noting the 0.23% HFC credit cost is comparable with affordable housing peers and the 1.69% NBFC credit cost with NBFC peers in the same business.

Low-Value Intentional Defaulters Moved Off-Book at Minimal Loss

• ~Rs.90 crore of loans sold to an ARC in Q2 FY 2026-2027 — a mix of 0-30, 30-60 and 60-90 DPD loans plus some NPAs — at an average loan size of ~Rs.5.5 lakhs, booking a loss of only Rs.90 lakhs; asset selection will be recalibrated every quarter.
• Strategy rationale: retain paying customers and concentrate recovery on loans above Rs.10 lakhs, while moving low-value (~Rs.5-7 lakhs and below) intentional defaulters to the ARC.
• PCR on the ARC pool drew analyst scrutiny — Raghav Garg (Ambit Capital) flagged ~25% provisioning in Q2 FY 2026-2027 versus ~50-60% on ARC sales in preceding quarters, on a pool of 7-8 year old loans; management said the 25% is based on the internally developed UTL model, as the pool can include 30-60 day bucket loans with intentional default where provisions need not be high.
• NPA vs regular-loan breakup of the Rs.89 crore ARC sale was not provided on the call; management said Amit will share the detailed breakup separately via email.

~Rs.3,500 Cr Unhedged Floating Exposure; NHB Refinance Reapplied

• ~Rs.950 crore raised in Q2 FY 2026-2027 via term loans, securitization and direct assignment; liability mix at 64% banks, 11% NCDs, 18% securitization/DA, balance NHB; total liquidity of Rs.1,759 crore as of September 2026, including Rs.1,028 crore of unavailed bank sanctions.
• Net unhedged borrowing exposure of Rs.3,500 crore (~25% of AUM) — a 25 bps repo hike implies ~7-8 bps NIM impact in Q3 FY 2026-2027 (CFO Sanjay Mittal), which management is trying to protect via higher volumes; ~20% of the book (~Rs.2,000 crore) is floating-rate lending, plus ~Rs.2,000 crore of fixed-rate lending where increases can be passed on.
• Borrowing mix as of Q2 FY 2026-2027: ~31% fixed rate; of the ~69% floating portion, ~34-35% is repo-linked and ~34% is NPLR-linked; repo-linked borrowings imply ~8 bps higher borrowing cost in Q3 FY 2026-2027 after the RBI repo rate hike, plus 4-5 bps from MCLR-linked borrowings.
• NHB borrowings stand at ~7-8% as of Q2 FY 2026-2027; management pushed back on an analyst-cited historical peak of 26-27%, stating the NHB share was never 25% and peaked at a maximum of 14-15% (period unspecified).
• Analyst Pankaj Chheda (Dam Capital) cited consolidated NHB borrowing share declining from 26% in Q2 FY 2024-2025 to 19% in Q2 FY 2025-2026, characterizing NHB refinancing as the company's least costly funding source; the company has recently reapplied to NHB for additional refinance and is in continuous documentation, hoping for sanction and drawdown (period unspecified).

Asset Quality Normalization Targeted by End-FY27; New Business Under Evaluation

• Management expects gradual normalization of asset quality metrics to earlier levels by end of FY 2026-2027; drought impact is confined to select places in Maharashtra and, based on on-ground information, business ramp-up and volumes are unlikely to be impacted.
• Foreclosure/prepayment rates inched up in Q2 FY 2026-2027 due to competition — which Balaji specified is coming more from small finance banks, not lower cost-of-funds players (Bajaj Housing, Canfin) or similar-cost peers (Aadhaar); the company will try to offset this by maximizing volumes.
• Microfinance overlap is limited — average NBFC ticket size ~Rs.8 lakhs, estimated customer/family overlap with microfinance exposure only 3-5%, loans secured against residential property at ~45-50% LTV (Q2 FY 2026-2027).
• Insurance income contributes ~0.4% of total assets (gross, Q2 FY 2026-2027); management is awaiting final IRDA guidelines before deciding any corrective action — the 4% loan component covering insurance premiums will not change, but intermediary commissions (including for banks and NBFCs) may be revised, extent unknown.
• A new product/line of business remains under evaluation with no conclusion reached; details to be shared in Q3 FY 2026-2027 — Balaji committed the new business will be asset-backed, stating Aptus will "never" enter unsecured lending.
• Quasi home loan average ticket size declined to Rs.9.4 lakhs from Rs.10.1 lakhs in Q2 FY 2026-2027; Balaji clarified the rise in average LTV to 45% (from 40%) reflects EMI repayment capacity, not a deliberate driver — income-to-installment ratio remains the primary underwriting filter.