Good morning, ladies and gentlemen. I am Ikra, moderator for this conference.

Welcome to the earnings conference call of Aptus Value Housing Finance India Limited to discuss its results for the quarter and year ended March 31st, 2026. This conference call may contain forward-looking statements based on the company's beliefs, assumptions, and expectations as of today.

These statements are subject to risks and uncertainties, and actual results may differ materially. At this moment, all participants are in the listen-only mode.

Later, we will conduct a question-and-answer session. At that time, if you have a question, please press * followed by 1 on your telephone keypad.

Please note that this conference is being recorded. We have with us today Mr.

M. Anandan, Executive Chairman; Mr.

P. Balaji, Managing Director; Mr.

C. P.

Manoharan, Executive Director and Chief Business Officer; and Mr. Sanjay Mittal, Chief Financial Officer.

I would now like to hand the call to Mr. Anandan for his opening remarks.

Thank you, and over to you, sir.

Thank you. Good morning, ladies and gentlemen.

I am Anandan, Executive Chairman of Aptus Value Housing Finance India Limited. I warmly welcome you all to the earnings call.

We are very happy to present that overall, we have demonstrated resilience and robust business growth for Q4 as well as for FY 2026. In Q4 2026, as you're aware, we saw a strengthening of our growth momentum aided by ongoing process improvements and technology enhancements, alongside continued focus on credit quality.

During the quarter, we delivered highest quarterly disbursements of ₹1,242 crores. This has come despite not sourcing any loans of less than ₹7 lakhs of less than ₹7 lakhs.

Looking ahead, we expect further improvement in this growth trajectory driven by entry into newer states, Maharashtra and Odisha, and deeper penetration in existing markets, channel augmentation, higher average ticket size, calibrated lending rates on incremental loans, and improved productivity. Going forward, we are very confident of maintaining a consistent growth of over 20+% and best-in-class ROE of 20%+ with this I hand over the mic to Mr.

Balaji to take you through the business focus and key operating and financial parameters. Thank you.

Thank you, sir. Good morning to all.

To begin with, I am happy to convey that we have delivered on our guidance across key levers, be it growth, spreads, costs, and credit quality, and will sustain this trajectory in the coming years. During the year, in line with our intent to onboard higher quality customers, we discontinued sanctions below ₹7 lakhs.

While this decision led to temporary moderation in disbursements in Q1 and Q2, we rebounded strongly in Q4. We witnessed this growth momentum continuing in April 2026 as well.

This has helped set a strong foundation for sustained business momentum and reinforced alignment of field execution with our policies. Overall, the year reinforces our belief that affordable housing segment we operate in remains structurally robust and has strong potential for growth.

Growth remains our key focus area. To accelerate growth momentum, we are executing a set of targeted high-impact initiatives.

The first one being geographical expansion. We expanded our presence in the newer states of Maharashtra and Odisha in FY 2026 and strengthened our presence in existing states as well, leading to a branch network of 339.

On account of encouraging indications from our new geographies and continued business momentum in our existing geographies, we are planning to open around 50 branches in FY 2027. The next one being increasing the average ticket size, partly driven by inflation.

Increasing our ATS is helping us onboard higher quality customers. The next one being optimizing lending rates across segments, in line with our strategy to onboard higher quality customers and aid growth further, we have optimized interest rates on certain loan ticket sizes, leveraging the benefits from lower borrowing costs and improvement in productivity.

As the rate reduction is only for the incremental customers, the impact on the spreads or the NIM is not very material. Fourth one will be connector channel.

In addition to our digital channels, we have expanded our connector partnerships across branches. While this is still at a nascent stage, we expect this channel to evolve into a meaningful growth driver over time.

Looking ahead, we expect to deliver sustainable AUM growth of 22% to 24% driven by these initiatives. Our growth is anchored on four strategic pillars.

First one is diversified mix, the focus on self-employed customers across housing and business loans with strong presence in Tier 3 and Tier 4 towns. Then the next one is the geographical expansion, scaling beyond South into Maharashtra and Odisha while deepening the core markets.

Productivity, driving higher output through data-led, system-driven processes. Then the digital excellence, leveraging technology across sourcing, credit, and collections to improve speed, control, and efficiency.

Now, moving on to performance, major performance highlights are as follows: First, relating to business growth and scale, AUM grew by 21% year-on-year to ₹13,107 crores. Disbursements in Q4 FY 2026 grew 17% year-on-year and 21% quarter-on-quarter to ₹1,242 crores.

Disbursements in FY 2026 grew 11% to ₹4,009 crores. Branch network stood at 339 branches as of 31st March, adding 39 branches in FY 2026.

Now coming to the asset quality, the collection efficiency stood at 100.5% versus 99.1% in the previous quarter. The improvement in collection efficiency led to a dip in our 30+ to 6.21%, which was 6.48% in the last quarter.

We closed FY 2026 with a GNPA of 1.52% as against 1.19% in FY 2025. The increase is primarily due to marginal increase in the NPA of NBFC.

Net NPA was 1.15% as against 0.89% in FY 2025. The credit cost for FY 2026 remained at 50 basis points within our guided range.

Now coming to the profitability, during the quarter, net income margins grew by 24% year-on-year to ₹434 crores. Our spreads improved to 9% driven by decline in cost of funds to 8.1%.

Our opex as a percentage of AUM remained at 2.8%. Profit grew 26% year-on-year to ₹261 crores, translating into an ROA and ROE of 8.2% and 21.2%, amongst the highest in the industry.

The profit for FY 2026 rose by 26% to ₹943 crores. During the year, we have declared a dividend of ₹4.60 paise, including the dividend of ₹2.50 paise that was declared in the board meeting held on 6th May 2026.

Now coming to the funding, during Q4, we raised approximately ₹980 crores on a consolidated basis, primarily through a mix of NCDs, term loans, and securitization. Our liability profile continues to remain well-diversified, with 58% from banks, NCDs at 15%, securitization including PTCs and DA at 19%, and the balance through NHB, which is at around 9%.

We continue to maintain strong liquidity position with total liquidity of ₹2,057 crores as of March 2026, including ₹1,505 crores of undrawn bank sanctions, providing us ample headroom to support growth. Now, with these remarks, I open the floor for the question-and-answer session.

Thank you.

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session.

If you have a question, please press * and 1 on your telephone keypad and wait for a turn to ask the question. If you would like to withdraw your request, you may do so by pressing * and 2.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question comes from the line of Rajiv Mehta from YES Securities.

Please go ahead.

Hi. Good morning, and many congratulations on very strong numbers.

Sir, my first question is on your Tamil Nadu state growth. There was a good revival, and I think you have been speaking about it that you're trying to drive a revival there.

Did anything change in terms of macro factor in terms of demand, competition? Internally, what changed in terms of team stability, team productivity, which drove good comeback growth in Tamil Nadu in this quarter?

If you look at Tamil Nadu, the year-on-year loan book growth is around 14%. Of course, we have made structural changes in terms of employing correct people and then retaining people in Tamil Nadu.

Still, in Tamil Nadu, the attrition is slightly high, but still, we are able to retain people who are able to contribute to the business. Having said that, in Tamil Nadu, the competition is slightly higher, and since we are there in Tamil Nadu for last 15, 16 years, if anybody wants to open a branch in Tamil Nadu, the first thing they do is to take people from us.

Still, because of various incentive schemes which we have launched and based on and productivity-based improvements and monitoring systems, we are able to achieve this performance, and going forward, we are confident of getting this in place.

Now that 15-odd percent sequential traction that we saw, which was very solid, the momentum is now structural in nature, right? That's what you're trying to indicate.

Yeah.

Yeah. Sir, what is the incremental ticket sizes in home loans and LAP, quasi-home loans that we are now onboarding?

What is the incremental lending rate? In the future, how do you see the ticket size progress for us, which will help us in delivering better growth over the volume?

Our

strategy on the average ticket size, whether it is the housing loan or quasi-home loan or small business loan product, every year, we want to increase this by ₹1 lakh. This is partly driven by inflation, and also it helps us onboard higher quality customers.

This is broadly the plan, and hopefully, we'll be able to achieve this because the field executives and the branch managers are also aligned to this. That is what we'll be implementing.

Got it. Sir, can I just ask one last question?

Yeah.

In terms of channel augmentation, when you say channel augmentation, engagement with the connectors and all, one is connecting more branches will be local connectors. Where are we in terms of that setting the connection of branches in terms of number, how many branches will then have connectors network to go to for sourcing?

How do we better engage with the connectors so that we get better volume in the local market?

In relation to channel augmentation, there are two things which we are pursuing other than the organic leads that is being generated by the sales officers. What is happening, one is the digital channel, basically the referral app, the customer referrals, the construction ecosystem referrals, and also the digital social media.

That is one thing which we are doing. Over and above that, we are also pursuing this connector channel.

This connector channel will be an additional channel over and above this organic leads that is getting generated by the sales officers. Every branch manager has been assigned the responsibility to recruit connectors, and they will be driving the connector channel.

The leads that are coming from the connectors will be passed on to credit and for further processing from the branch manager point of view, and that will be pursued. That's the plan we have, and we launched this sometime in January, and the traction is very good, and hopefully this will get converted into a good channel augmentation process in the coming year.

Thank you so much, and best of luck, sir.

Thank you, Rajiv.

Thank you. Next question is from the line of Kunal Shah from Citi Group.

Please go ahead. Mr.

Shah, your line is unmuted. Please proceed.

Thanks for taking the question. Couple of questions.

One is on the collection efficiency side. Generally like Q4, we see a strong build-up.

We have crossed 100, but still lower than past couple of years in Q4. Is it like there is still maybe obviously, we have put in a lot of efforts on the collection, but in any of the regions or profile, are we seeing a relatively slower recoveries?

That's the first question. Secondly, on the off-balance sheet item, we have seen the off-balance sheet proportion going up.

To that extent, when we look at it on the off-balance sheet side, what is the kind of scale-up, like last time you indicated to get towards 6% to 8%, we have already crossed that. Will we take the off-balance sheet proportion further up rather than pure on-book AUM?

Thanks.

The first thing on the collection efficiency, this is with 100.5%, as you rightly said, this quarter saw good collections and it has actually worked well. If you look at the area-wise thing, Karnataka, there are small issues in the sense that so there are issues in collections, which we are trying to sort out through strengthening the collection system there, like recruiting more people and recruiting more monitoring people and there, that kind of a thing.

Other than that, we are not finding any other place where

Just to add, on a product-wise basis if you look at it, around 2/3 of our portfolio is in the HL, and about 1/3 in the NBFC business. In the NBFC business, the collection is slightly lower.

In fact, even in the NPA, gross NPA and net NPA, the NBFC-related business, while the total average is 1.5 or 1.52 gross NPA, the NPA NBFC-related, non-home-related, it is slightly higher, about 20, 30 basis points higher. The HL-related portfolio, it is lower.

Not only in the gross NPA, net NPA, in terms of even the collection, the field collections also slightly lower in the NBFC-related business. That we have recognized, and we've strengthened because of the growth potential and the margins in the NBFC business, even the credit cost also being fully factored in, that we are really strengthening our collection staff particularly in that product segment.

That is in terms of the product-mix-wise. Geography-wise, yes, as Mr.

Balaji said, Karnataka is an area where the collection percentage is slightly lower than the other geographies. That we are really very focused.

In fact, number of branches and the business growth and the strengthening of the collection staff is really happening in that state. We understand, this is generally is the scenario for some of our other competitors also.

The collection in Karnataka is slightly different. That we are really focusing on.

Yeah. Now coming to this off-book, I think you are meaning the direct assignment.

See,

we have got a clear policy on this direct assignment. First, this is being done for the non-housing loan book and this is also when you do that, the principal business criteria on the housing finance company improves.

Also this we are managing it through as a liquidity management tool. If you look at the direct assignment, we did around ₹170, ₹180 crores in this quarter, and this absolute value of ₹160 to ₹180 crores will be maintained every quarter.

As a strategy, we might not want to go beyond 10% of the total AUM at any point in time. Now currently it is at around 5%, the DA deal done.

This is the plan we have on the DA, and going forward also, this will be monitored and taken care of.

Yeah. Kunal, just to add, in the current year, we have done about ₹700 crores of direct assignment, off-balance sheet as you call, out of a total disbursements of ₹4,000 crores.

It is coming about, 16%, 17% as a percentage of disbursements. If you look at the loan book on ₹700 crores on the loan book of ₹13,000 crores, it comes about 5.6% or so.

Going forward, as a percentage of loan book, as Mr. Balaji mentioned, it will be around 10%, which as you know is much lower than other comparable companies in our space.

Going forward, this off-balance sheet direct assignment will be there, but within the guidelines, within the specific percentage that been approved by the board.

Got it. Perfect.

One more question if I can squeeze in.

Yeah. Please.

On spreads, we saw 10 basis points increase, that's particularly the funding cost advantage. Do we see the funding any repricing benefits still left or it's largely done?

Obviously our portfolio on the fixed side is much higher, particularly on the lending side, so that's also helping them. Hereon, how should we see the traction on spreads?

If you look at it, we have been our incremental cost of funds in the housing finance is around 7.8% or 7.9%, and in the NBFC it is between 8.2% to 8.3%. I'm not seeing any reduction from these rates in the coming quarters.

There is a likelihood that it can only result in slight increase as well. This is on the cost of borrowings.

Of course, since we have also calibrated some incremental lending rates on some of the housing loan ticket sizes, there can be a slight drop in the yields as well. We have already worked it out.

The impact on the AUM on terms of yield will be around 0.1%, and we are planning to have the same rate of borrowings, which is currently at around 8.1% in the coming year as well. Even assuming if my incremental cost of borrowings is going to go up by 20%, sorry, 0.2%, then what will happen is the total borrowing cost will increase by 0.08%.

The net impact on the yield will be around 0.18%. This is what has been factored in in our business plan as well for the next year.

Going forward, this will be the thing which we have projected.

Perfect, yeah. Thanks.

Thanks and all the best. Yeah.

Thank you.

Next question is from the line of Reneesh from ICICI Securities Limited. Please go ahead.

Hi, sir, and congrats on a good set of numbers.

Hi. Thanks.

Just two, three things. One on the disbursement yield side, right.

In FY 2026, there has been a couple of changes we have made to our pricing. One, of course, is the discontinuing disbursement below ₹7 lakh ticket size, which I'm assuming to be more than 20% yielding product for us.

Also, as you already mentioned that we have calibrated rates in some of the ticket size. Net net, when we look at the book yield, which is closer to 17-odd percent, how the disbursement yields are trending let's say over two, three last two, three quarters, especially post exiting below ₹7 lakh ticket size?

If you look at Reneesh, since till December, we have not changed any rates. Okay.

In January, we have just reduced the interest rates for the housing loan customers alone, and this only for the housing loan customers. Because of that, in Q4, the disbursement yield dropped by around 0.1%.

Okay. Now going forward, in the month of April also, we have slightly calibrated on the interest rates only for the housing loan, and that too on certain ticket sizes.

In the coming year, the likely impact on the disbursement yield is likely to be at around 0.1%, 0.15%. On the loan book, it is going to be around 0.06%.

This is broadly the plan. This is what we have done as of now.

There is no impact of we exiting below ₹7 lakh ticket size on the yields yet?

No, that is not actually playing out

because

the yields which we were charging less than ₹7 lakhs or greater than ₹7 lakhs were never different earlier.

Got it. Sir, secondly, on the profitability front, right.

Obviously Q4 ROE looks very strong at 21-odd percent. Going ahead, what kind of a sustainable ROE you expect, the way our AUM mix might evolve over next two to three years, in terms of better quality, slightly lower rate, etc.?

How do you see overall profitability trending over next two to three years?

If you recast the ROE tree which is currently now and then extrapolate it for the reduced lending rates and also the slight increase in the credit cost, I think I told the impact on the spread is likely to be around 0.15% to 0.2%. Correct?

Hopefully, we will be able to compensate it by way of productivity and also maybe a slight reduction in the opex, which can happen or which might not happen. Even if assuming the opex is likely to be at 2.7% and credit cost even if you are taking from 0.5% to 0.6%, on hypothetical side, still ROA will because of leverage can come down, but ROEs will be much above 20%.

We have actually planned it this way for the next two years as well. Definitely, we are very confident of, as Mr.

Anandan told, 20+ growth sustainable 20+ 20%+ growth and a sustainable 20% ROE. That is what is Aptus meant for.

Yeah. Just to add, actually our ROE is progressively going up during the last 4, 5 years, if I recall.

We've sort of improved from about 14% progressively. Now it has, in fact, a milestone in the fourth quarter.

We already crossed 20%. Actually in fourth quarter, if you see, it is really touched 21% ROE, which, as you are aware, is the best-in-class RO return.

Because we very strongly believe our economic value add, value creation is as important as the growth. While we will continue to pursue strong business growth, at the same time, we are very conscious of the financial metrics, particularly the economic value add and ROE as well.

Very consciously, we've been working on it last 4, 5 years. Going forward also, there is enough strengths have been built into the company to sustain this rate and, in fact, if not improving the rate further.

Got it. Sir, just last question on the borrowing mix side.

We saw NHB borrowing coming down all the way to 9-odd percent versus 15%, 18% previously. Just wanted to know is there any particular reason why there is a lower NHB drawdown in FY 2026?

In '27 or yeah.

No, actually Reneesh, for the last year, we didn't borrow from NHB because we were able to get better-cost funds as compared to NHB. That's why we went for the other other sources.

Having said that, we have we have already filed an application for a ₹500 crores refinance facility from NHB, and hopefully that will come in another 2, 3 months, the sanction will come, and this will we'll be drawn that. The the actually the specific reason is we had better borrowing sources, which which was actually the cost of that was less than the NHB borrowing, and that's why we went for the other thing.

Now that NHB has also reduced their prime lending rate and they are able to give us give us at a better rate, we'll be getting into this NHB borrowings as well. Going forward, if you look at our book also, it is almost 82% fixed.

NHB borrowing, if it comes to us, it will be on a fixed-rate basis, which will help manage my interest rate risk as well.

Got it. No, I was just about to ask you that only, sir, in case let us say in FY 2027 the NHB borrowing share goes up to 15-odd percent, then ideally that should help us keeping borrowing cost even at current level even let us say the interest rate goes up.

Is that the fair assumption?

It's a fair assumption, but if you're building in a business plan, it's better you build in a 0.2%

cost of borrowing. Let us say that should be upside risk.

Yeah.

Sir. Thank you and best of luck.

Thank you.

Thank you. Next question is from the line of Mayank Mistry from Antique Stock Broking Limited.

Please go ahead.

Hi, sir. Thanks for the opportunity and congrats on a good quarter.

Sir, my question is mainly, first of all, on the branch expansion side. You said you will be expanding 60 branches and largely coming in from new geographies.

Can you quantify, sir, how much could be from new geographies? Secondly, also now that you are comfortable in both of these geographies like Maharashtra and Odisha in terms of expansion, are you exploring any other geography sooner, maybe within a year or maybe within next couple of years?

Because right now it looks like it is pretty skewed into six states. I understand that you have been proficient enough in going deeper into geographies, but yeah, it still leads to a concentration risk.

Any comment on that part,

sir? Mayank, we are well aware of that, and that's why we have shifted to this new geographies.

If you look at it, the plan of opening 60 branches, 30 branches will come in Maharashtra and Odisha, the additional. The balance will come in Andhra Pradesh and Telangana.

If everything goes well, we have also recruited a senior person taking care of the Maharashtra who has got experience of handling and building of business in NBFC and housing as well. If everything goes well, maybe we might open one or two branches in the other states as well.

It will depend on how the whole expansion plan progresses. The thought is there to get into the new state, but it will be done at the appropriate time.

It's contiguous,

on a contiguous way.

Sure, sir. On the borrowings mix side again, your securitization mix have significantly increased in this quarter.

What must be the differential you must be getting in doing securitization versus against NCDs, which have actually gone down this quarter?

Actually securitization mix has not gone up. It is actually 11% if you look at.

In the earlier presentation, we didn't include DA as the source of funding in the pie chart. That's why if you look at it, 11% and 8% is the DA, and that's what has come as on the total borrowings.

The securitization is still at 11%. Last time also it was around 10%, 11% things only.

Securitization also helps us in terms of to raise a longer-tenor debt. Compared to the other debt, the securitization also carries slightly longer tenor than other sources, yeah.

Okay. Sir, if you can give us an interest rate you are getting on NCDs?

I didn't get your question.

The cost of funds from NCDs.

From NCDs, we have done a securitization deal in the NBFC in Q4 at 8%. That is the going rate.

NCD slightly 8.1%, 8.2%. Duration is longer.

Duration is also longer, yeah.

Sir. Thank you.

Thank you. Next question is from the line of Drishan Chavatte from Kotak Institutional Equities.

Please go ahead.

Hi, thanks for taking my question. Just a small one.

If you could give some color of incremental disbursement that you have done in this quarter, how would the disbursement growth let's say break up between salaried and self-employed? I think if I just look at the overall business mix change on a quarter-on-quarter basis, there seems to be a fairly sharp swing in favor of self-employed from salaried.

If you could give some color on that, that would be helpful.

That is, the the self-employed is around 78% and 22% is the salaried, and on the on a overall basis, that will still be continued. That is that is the philosophy we have, and that will continue.

Sure. The presentation actually says that self-employed is 80, maybe that is where I think

maybe there was this. 78% to 80%, yeah,

okay. Sure.

The mix in your view sort of broadly doesn't change?

Yes.

Sure. The stress is probably more geographic rather than sector-specific is what one is seeing?

Geographic.

Yes.

Got it. Just one small one is on the operating leverage side, right.

In terms of cost-to-AUM ratio, if I look at this number every year for the last three years, it's been coming down, but it's probably hitched up a bit in FY 2026, and that's kind of getting reflected in higher employee payouts. How should one think about it, and how will this trend going forward?

If you look at the overall cost to AUM, it is around 2.7%. Last time it was 2.6%.

See, our guidance has always been to maintain within 2.6% to 2.8%. Of course, the reason why this year there is a slight increase in the cost is first of all, the disbursement was an all-time high in this quarter, there was more employee payouts and that kind of a thing.

New branches were also open, 39 branches. To that extent, there was an absorption in the cost.

The third one is we have also increased the IT spend in terms of the security and also the way we do business. The JEEVA, which we launched in April '24, has been evolving and it has settled well.

Every time when a new thing like account aggregator or when we are talking to Unified Lending Interface introduced by RBI, we are able to see the digitization of land records in some of the states. Those are some of the things which we are spending, that is actually an investment for the future.

Though it is getting absorbed as a cost now, but it is going to bring in lots of improvements in the coming years.

Got it. Just one more, I think on the credit cost side, what is the guidance that you have shared?

Currently it is around 0.5%. We want to have a 0.5% plus or minus 10%, 0.1%.

Got it. Thank you very much, and all the best.

Thank you. Next question is from the line of Prithviraj Patil from Investec.

Please go ahead.

Hi. Thanks for the opportunity.

I just wanted some clarity on the AUM mix. If I look at our spreads, they have increased 10 basis quarter-on-quarter.

I just want to know there is an uptick in the self-employed segment and the LAP segment. I just want to know is that contributing to the increase in spread or is there a benefit on the cost side?

It is basically because of the cost of funds has come down from 8.3% to 8.1%. That's the benefit that has flowed into the whole thing.

Okay. It's not because of the AUM mix, right?

Not because of AUM mix.

Thank you.

Thank you. Next question is from the line of Sonal from Asian Market Securities.

Please go ahead. Hi,

thank you for taking my question. Sir, in your earlier comments, I heard that this year we face some issues with NBFC, and that is where the credit cost has gone up.

Now, when I compare your consolidated loan loss provisions and standalone loan loss provisions, I see that it

means Not properly hear. Very small.

Not able

to hear you clearly.

Is it better now?

Please continue. We'll see how it progresses.

Sure. When I look at your standalone and consolidated loan loss provisions, at least for the quarter that I've seen that on a consolidated basis, the credit cost is something close to ₹15 crores, and on standalone, particularly ₹17 crores.

Even if I look at the trend for the full year, it seems that consolidated, the credit cost is higher in the housing portfolio as compared to NBFC portfolio. If you could just tell exactly where is it that I'm missing because in your earlier comments, you said that the issue was more on the NBFC side.

Sorry, you contact me personally. I'll tell you because I'm not able to hear you properly.

Yeah?

Sure.

Thank you. Next question is from the line of Shreepal Doshi from Equirus.

Please go ahead.

Hi, sir. Thank you for giving me the opportunity and congrats on a good quarter.

My question was on repayment rate and the BT out. What is that for us in terms of this quarter versus last quarter?

What strategy do we have in order to let's say retain a customer especially when the rates are so much different versus our peers? Because our peers have seen this rate moving up and down there has been volatility there, but for us, it's been much more stickier at 15%, 16% sort of a number on the repayment rate side.

If you look at the pre-closures, it is around 7% to 8% of the total AUM. Okay.

7%, okay? Of that 7%, almost 65% to 70% of our customers, when they come and close the loan, it is out of their own funds.

The balance, only 2% gets transferred to the other companies. This we have been observing for the last 10 years.

This has not changed at all. Basically, this is not the interest rate which is playing a part.

It is basically the type of customers whom we are serving. When they have some surplus funds, the first thing they do is to settle the loan rather than keeping it alive.

Definitely the balance transfer is around 2% to 2.5%, and that's still continuing. As of now, that's not being looked at as a threat.

Yeah. Actually we don't see any significant challenge in the BT to other financial institutions.

That is only about 1/3 of our total pre-closures. 2/3 really money coming from our customers themselves out of their savings and their, for all their closing out of their money.

The actual loan transfer from us to the other financial institutions, it is only around 2 around 2.5%, which has been there for quite some time, almost 8, 10 years. That way our BT to the other financial institutions, it's something is normal and is nothing abnormal.

We are not observing any abnormal trend in that.

Got it. Sir, just a follow-up there.

While at book level you are indicating 2% to 2.5%, but what if you could give some color specifically for HL product, would it be the similar or it would be let's say closer to 4%, 5% sort of a BT out number with respect to other players acquiring our customers?

No, actually we have seen this analysis across the product, it is the same. We're not seeing that kind of a difference.

Yeah.

Got it, sir. Thank you so much for answering my question.

Thank you. Next question is from the line of Raghav from Ambit Capital.

Please go ahead.

Sir, hi. Good morning, and thanks for the opportunity.

Am I audible?

Yes, Raghav. Okay.

I just have one question on your assignment income, maybe the CFO can answer this better. See, when I look at your assignment gains as percentage of the off-balance sheet loans or assigned loans, that's 28% for this quarter and about 42% for the full year.

When I compare this with peers, the number is more like 8% to 10%. I think when the back book builds up or when you scale up this assignment book, the numbers, which are 28% for the quarter and 42% for the year, should normalize downward for you.

I just wanted to get some sense that for FY 2027, '28 or going ahead, if you can give us some guidance as to how these assignment margins will look because right now they are contributing a lot to your profits. As your margin normalizes downward, that's a risk to your ROE guidance or generally it would not contribute as much to the ROE as it is contributing today.

I just wanted to get some sense there.

Raghav, if you look at our DA that is being done, we are doing it for the non-housing loan book, largely non-housing loan book, where the yields are around 17%, 17.5%. We are going to do a DA deals at say 8% or 8.1%.

The spread is so high, and that is what is getting recognized as the upfront income. This is what it will continue.

Having said that, last year there was not much DA, this year there is a DA, and next year it will be the same. The same momentum will continue.

There will not be much impact because of this on the ROE or ROA. To clarify, the range of upfront income will be in between 25% to 28%, what you have actually calculated.

Because of our larger tenure and because of the yield and spread, the upfront income will be in that range, around 25% to 27%, 28%. Yeah.

Understood. The way that I understand this is that as you largely upfront the future income, right, you discount it to the present value and then you recognize it on the P&L.

Next time when you do the direct assignment, the income from the back book will not be available. It will only come on the newly assigned loans.

In the denominator in the base, you will still have the back book, right? Ideally the margin should come down.

Shouldn't it play out that way? I'm just trying to understand.

No, this 25% to 28% what we are saying on the incremental DA what we are doing,

so

that will remain as that guided percentage of 25% to 28%.

Correct. You're saying 25% to 28% is on the incremental DA that you're doing,

but

going forward as your outstanding book builds up, this margin should come down ideally. Is that the correct way to think about it?

No,

margins will not come down. Anyway, Raghav, if this is a specific question, I'll come back to you.

I'll call you after the call. Maybe we can understand the numbers and then we will work it out.

Okay?

Sure. That would also help.

Yeah.

Thank you. Next question is from the line of Krishan Parekh from Morgan Stanley.

Please go ahead.

Am I audible now? Thank you for taking my questions.

I just had one question. Basically, in our opening remarks, we mentioned essentially looking for better-quality customers and we have optimized rates as well for these customers and we see some impact on the loan spreads in the next year.

If you could help us get a more holistic picture, in the sense that you explained how you see the impact on the yields, how should this benefit us on the productivity side as well as on the credit cost side at the same time and net-net, what is the impact that you see of moving to this better-quality customer on our overall profitability as well as if you could give us a small picture of essentially what is the difference between your current customer and this new customer that you're chasing? Are they very different kind of cohort or it's the same cohort and we should expect similar behavior from this customer as well?

Krishan,

I

will try to answer whatever I was able to get from your question. Otherwise, I can talk to you separately.

First thing is if you look at the last year, we have taken this call to stay away from less than ₹7 lakhs and then less than ₹7 lakhs,

and

that has actually contributed to the better quality in terms of collection efficiencies and everything. Okay?

Now, if you look at the disbursements that has been done at a higher ticket size, the collection efficiencies are very high and the bounce rates are really low, and to that extent, the collection team's effort or the sales team effort of going to the field and collections is minimized. Those are all the benefits that are coming because of this higher ticket size disbursements.

Going forward, that's what will be concentrated upon.

Understood. That was helpful.

If you could just help us understand, from a customer profile perspective between our current customer and this new higher-ticket customer, how much of a step-up is it?

No, the profiles are the same. It's basically the house funded will be slightly higher cost and because of this and of course, we have gone into this higher ticket size because of inflation also, right?

It is basically the profiles of the customers are the same.

The profile-wise also, the credit bureau data, account aggregator data will be slightly better for the higher-ticket customers than the customers with loan profile of less than ₹7 lakhs, because we want to be very clearly away from the microfinance type of customers. The average size of the microfinance is getting ₹2.5, ₹3 lakhs.

At least want to be at least 2x away from it. Which means that one is really looking for a better profile, better background customer, financial background customers, and better income-earning profile customers.

Which is evidenced, particularly credit data now also is getting strengthened, account aggregator data is available, and also with recently introduced ULI opens up a lot of labor data kind of a thing. We are using this data to improve our underwriting standards and through that, look for better customers without really not increasing much risk, because if the customers are going to be from an average ₹9 lakhs to average ₹10 lakhs, while percentage terms is also about 10% an improvement in ATS, but actually in terms of the ₹1 lakh more loan, it doesn't really change the inherent risk profile of the customer.

In other words, in fact, it's mainly to cover the inflation cost of the construction itself will be needing it. That way obviously there will be slight improvement in the profile of the customers also.

Correct.

Understood. Thank you.

Thank you. Next question is from the line of Pawan Kumar from Edelweiss.

Please go ahead.

Hi, sir. Thank you for the opportunity and congratulations on really good set of results.

Am I audible?

Yeah.

Yeah. Sir, two questions.

One question is regarding Tamil Nadu. You mentioned Tamil Nadu is seeing very high competition and competitors are poaching your employees.

Is this because of very high penetration in terms of affordable housing finance or LAP and the field staff finding it tough to meet the targets because there are not enough customers who are looking for this and that is leading to high attrition? The same thing is visible even in the quarter-on-quarter AUM growth in Tamil Nadu.

The Tamil Nadu, Karnataka numbers are slightly lower than that of AP and Telangana when I compare Q-o-Q growth in Q4 FY 2026, that are same with Q4 FY 2025 numbers. That's one part of the Tamil Nadu equation.

Second part is the temperatures are much higher this year. Similarly, elections are also gone through.

Do you see higher credit cost impact in Tamil Nadu particularly for this particular quarter, Q1? Also, are there any local issues in Tamil Nadu?

That's one question, sir. Second question is

I'll take the second question first. Actually, elections were there, of course, the temperatures are also rising, but we are not seeing impact because of that.

The collection

data experience better in Tamil Nadu than other

That is what is the situation. As regards the growth is concerned, I think this 14% is a decent growth in Tamil Nadu considering the base, and also we have been successful, of course the competition is there, and we have been successful in retaining good people who are actually contributing to the company.

To that extent, we are successful and that is why this growth is coming in. While the competition intensity is much higher and other companies poaching guys from us, we are also sprucing up our retention schemes, insurance coverage schemes, and etc.

so that people are more aligned to Aptus and then they are able to contribute towards the growth of the company. As of now, we are not seeing that kind of a big problem, but the competition is intense.

Also we are adding new branches only in states like Telangana and Andhra and new markets like Maharashtra and Odisha. The new branch addition in Tamil Nadu that way is not much.

Whatever growth is coming is largely out of the existing branches only.

Yes, sir. Is that because penetration being very high, Tamil Nadu is much more advanced state compared to AP or Telangana either in terms of income or HDI, whichever parameter that you take.

Has it reached a certain level of self-own housing and then new customers are hard to come by?

I would not say the market still a long way to go. See, in overall terms, the demand is not the issue.

It's only because Aptus has become known to be a leader in the affordable housing space generally in South India and more so, much more in Tamil Nadu. Any new competitor from West or North wanting to open a branch, first they would want to look at our staff, because our name and reputation.

That does create an issue on a very short-term basis, but that being addressed and we are addressed, and as Balaji said, we are progressively getting back. We want to increase this 14% of what you said growth rate also to further better, going forward.

Got it, sir. Second question, you have guided for 22% to 24% AUM growth rate, so that's approximately ₹16,000 crores.

Assuming the same run-off rate, which is principal repayment plus BT out at same 16% of starting AUM, you need to do about ₹5,000 to ₹5,100 crores of disbursements in FY 2027 at an average of 370 branches, 380 340 to 400 that you go, average of 370 branches. That comes to monthly disbursement rate of 1.15.

That's about 10% growth. If I look at the last 3 years, it's been same at 1.06 or 1.05 crores per month disbursement per branch.

Even if I look at the Q4 numbers, it's 1.23 crores per month over 1.19 crores last year same quarter. You said that the ticket sizes will increase by ₹1 lakh, 10%.

Is that the main growth, the ticket size growth, but the customer addition is going to remain same as what we have seen so far? That's the question.

There will be customer growth. As been given in the presentation also, there is year-on-year customer growth, and as has been explained, growth will come out of new states, out of the existing new branches in the existing states, out of channel comprising of the customer app, Mitra app, and digital app channel, and which is augmented further by the connector channel.

It is just not and the data that looking at what are the past in terms of disbursement per branch of the past data. There are a lot of actions being initiated in the current year, mostly in the last two quarters, which is reflected in the fourth quarter in terms of substantial growth in disbursements.

With several actions including new branches, new states, branches, ATS, a new channel, and optimizing certain rates, several actions have been taken. It's not just one, and they are tracked.

We have a strong MIS to track what is the growth coming out of each segment and we believe that the basis on which we are indicating the kind of growth that we are confident of achieving.

Okay. Sir, just to ask this in a different way, now that the PMAY 2 is also kicking in, the BT rates will go down, how confident are you that you will deliver this 22% to 24% growth that you have been aiming for?

PMAY 2 is for the urban kind of customers. I don't think this PMAY has come into the rural scenario.

For our kind of customers, the PMAY coverage will be very minimal. This is not going to impact much for us.

If PMAY rural comes, we need to look at the amount of subsidy that is coming into that because PMAY 1 rural subsidy was very, very less. We need to look at that at that point in time when it is getting launched.

As of now, PMAY will not have any impact for Aptus.

Sir. The confidence on the 22% to 24% growth rate is very high?

Pawan, I think we have worked out various strategies to get to this ₹5,000 crores, and that is why we are giving this guidance. Hopefully we'll be able to maintain that.

Thank you so much, sir. That's very comprehensive and wish you all the best.

Thank you. Ladies and gentlemen, we will take that as the last question for today.

I would now like to hand the call over to the management for closing comments.

Thank you. Thank you everyone for attending the conference call.

I would like to pay my sincere gratitude to all the analysts and investor friends who have taken time out to listen to us today. Please feel free to contact us if you have any further queries.

Thank you.

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