8% To 17%: Housing Finance Stock in which Mutual Fund increased its stake in the last 4 qtrs

Synopsis:- Mutual fund holding surged from 7.9% to 17.2% over four quarters, signaling strong institutional confidence. Disbursements reached ₹17.2 billion with AUM at ₹222 billion, while margins improved to 34%. Expansion plans include 410 branches and ~25% growth guidance, supporting long-term outlook.

India’s Housing Finance Company sector thrives amid urbanisation and housing demand. As of March 2025, the on-book portfolio hit Rs 9.3 lakh crore, up 16% YoY, with 13-15% growth eyed for FY2026. The sector requires Rs 1.0-1.2 lakh crore extra funding this fiscal, while RoMA stays healthy at 1.8-2.0%. GNPAs hover low at ~1.7% in Q1 FY2026.

With a market capitalisation of Rs 11,143.98 crore, the shares of AAVAS Financiers Ltd closed at Rs 1,405.60 per share, increased around 0.85 percent as compared to the previous closing price of Rs 1,398.85 apiece. The shares have given 31 percent return in last one month.

Mutual Fund Inflow

Mutual fund (MF) holding in AAVAS Financiers Ltd has shown a consistent upward trend from March 2025, rising from 7.9% to 8.4% in June 2025, 9.2% in September 2025, 9.7% in December 2025, and further to 17.2% in March 2026. This steady increase highlights strong institutional accumulation and improving confidence in the company’s growth outlook.

Financial & other highlights

The company delivered steady growth, with revenue rising 12% from Rs 597 crore to Rs 674 crore, indicating improved business activity. Meanwhile, net profit increased 16% from Rs 146 crore to Rs 170 crore, reflecting better operational efficiency and margin support, highlighting a healthy earnings trajectory during the period.

Between Dec 2024 and Dec 2025, operating performance improved steadily, with operating/financing profit rising from Rs 196 crore to Rs 230 crore, reflecting a growth of around 17%. Meanwhile, operating margin also improved from 33% to 34%, indicating stable efficiency and better cost control, supporting overall profitability during the period.

AAVAS Financiers Ltd reported normalization in Q3FY26 after transitioning to a new disbursement recognition framework. Disbursements reached ₹17.2 billion, up 10% QoQ, while the sanction-to-disbursement ratio recovered above 80%. Additionally, AUM grew 15% YoY to ₹222 billion, indicating improving operational momentum despite earlier disruptions in business and accounting processes.

However, FY26 growth was impacted by internal transformation and tighter credit conditions, along with state-level challenges in Karnataka. Looking ahead, AAVAS Financiers Ltd targets ~25% disbursement growth in FY27, supported by ₹500 crore monthly run-rate, new branches, digital expansion, and productivity improvements, which together are expected to drive sustainable long-term growth.

AAVAS Financiers Ltd continues to strengthen its branch network, reaching 410 branches as of January 2026, with plans to add 20–25 branches in Q4FY26 and around 50 in FY27. This expansion focuses on tier-2/3 markets using a cost-efficient RRO model. Additionally, management guides 17–18% AUM growth in FY27, supported by ~25% disbursement growth, indicating steady business expansion.

AAVAS Financiers Ltd is a housing finance company focused on providing affordable home loans to low and middle-income customers, particularly in semi-urban and rural areas. The company emphasises asset quality, sustainable growth, and customer-centric services, building a strong presence through its expanding branch network and tailored lending approach.

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