Aavas Financiers (AAVAS) Q2 24/25 earnings summary

Executive summary

• Achieved 20% year-over-year AUM growth to INR 184 billion (₹183,956 Mn) in Q2 FY25, with net profit up 22% year-over-year to INR 1.48 billion for the quarter and 18% year-over-year to INR 2.74 billion for H1 FY25.

• Disbursements reached INR 12.94 billion in Q2 and INR 25.05 billion in H1 FY25, reflecting 8% year-over-year growth.

• Technology upgrades included rollout of Oracle Flexcube LMS, Salesforce-based lead management, and cloud ERP, improving operational efficiency and time to sanction.

• Expanded to 372 branches across 14 states/UTs, including entry into Tamil Nadu and omnichannel lead generation.

• Unaudited standalone financial results for the quarter and half year ended September 30, 2024, were approved and reviewed by the Board and auditors.

Financial highlights

• Net profit for Q2 FY25: INR 1.48 billion (₹14,790.50 lakh), up 22% year-over-year; H1 FY25 net profit: INR 2.74 billion (₹27,400.60 lakh), up 18% year-over-year.

• AUM grew 20% year-over-year to INR 184 billion (₹183,956 Mn); disbursements in H1 FY25: INR 25.05 billion (₹25,046 Mn), up 8% year-over-year.

• NIM for H1 FY25 was 7.61%-7.78%; ROA improved to 3.49% in Q2 FY25 and 3.28% in H1 FY25.

• Opex-to-asset ratio improved to 3.01%-3.25% in H1 FY25.

• Book value per share increased to ₹511.5 as of Sep 2024.

Outlook and guidance

• Maintains guidance for 20%+ AUM growth for FY25, with H2 expected to be stronger.

• Expects to maintain 1+ DPD below 5%, GNPA below 1.25%, and credit cost below 25 bps.

• Opex-to-asset ratio targeted to improve by 20-30 bps annually, aiming for below 3%.

• Focus on scaling, institutionalization, and leveraging technology for cost optimization and operating leverage.

• The company continues to maintain at least 100% security cover on its secured listed NCDs.