In This Article:
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AUM Growth: 20% year-on-year, reaching INR 192 billion.
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Loan Disbursement: INR 16 billion in Q3 FY '25, a growth of 17% year-on-year.
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Net Profit: 21% year-on-year growth to INR 4.2 billion for 9 months FY '25.
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Spread: Improved by 4 basis points sequentially to 5.72% in Q3 FY '25.
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NIM: Expanded more than 10 basis points year-on-year to 7.7%.
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OpEx to Asset Ratio: Improved by 42 basis points year-on-year to 3.21% for 9 months FY '25.
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Asset Quality: 1 DPD at 3.85% and NPAs at 1.14% as of December 2024.
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Credit Costs: Improved to 15 basis points for 9 months FY '25 from 19 basis points in 9 months FY '24.
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ROA: Improved by 4 basis points to 3.26% for 9 months FY '25.
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ROE: Improved by 16 basis points year-on-year to 14.06% for 9 months FY '25.
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Branch Expansion: 6 new branches opened during 9 months FY '25, with plans for 20+ more.
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NCD Raised: INR 6.3 billion from IFC in Q3 FY '25.
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Net Profit Q3 FY '25: Grew by 26% year-on-year to INR 1.46 billion.
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Capital Adequacy Ratio: 45.6% as of December 2024.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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AAVAS Financiers Ltd (BOM:541988) reported a strong AUM growth of 20% year-over-year, reaching INR 192 billion.
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The company achieved a 17% year-over-year increase in loan disbursements, totaling INR 16 billion for Q3 FY '25.
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Net profit for the 9 months of FY '25 grew by 21% year-over-year to INR 4.2 billion.
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The company successfully raised INR 6.3 billion through NCDs from IFC, marking the largest NCD raised by the company to date.
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Asset quality remains strong with NPAs at 1.14% and credit costs improving to 15 bps for the 9-month period of FY '25.
Negative Points
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There was a marginal increase in gross NPAs due to seasonal factors, raising concerns about asset quality.
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The cost of borrowing increased by 9 basis points in the quarter, impacting overall financial performance.
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The company faces challenges in maintaining its asset quality amidst a competitive environment and macroeconomic uncertainties.
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There is a noted increase in ticket size for disbursements, which may indicate rising real estate prices affecting affordability.
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The company is experiencing pressure from competitive intensity, which could impact future yield expansion.
Q & A Highlights
Q: Can you explain the increase in GNPAs and its impact on asset quality and credit cost guidance? A: The increase in GNPAs is seasonal and not alarming. Our 1 DPD remains below 4% at 3.85%, and we are confident in maintaining asset quality. The sequential increase in GNPAs is expected to stabilize in Q4.