ICICI Securities Maintains Buy Rating for Aavas Financiers, Sets Price Target at Rs 1725

Aavas Financiers Sees Robust Turnaround in Q4FY26, Enters FY27 on a Clean Slate

Aavas Financiers (Aavas) marked a pivotal year in FY26, characterized by significant leadership transitions. CVC Capital Partners entered as a promoter, and Mr. Manu Singh took over as MD & CEO, while Mr. Ripudaman Bandral was appointed as CBO. Initially, internal restructuring and industry headwinds impacted the company's performance in the first nine months of FY26. However, Q4FY26 witnessed a robust turnaround, with record quarterly disbursements of INR 23.5 billion, a 36% quarter-over-quarter (QoQ) increase. This turnaround was further reflected in a greater than 40 basis points (bps) QoQ net interest margin (NIM) expansion and a sharp 63bps QoQ improvement in 1+ Days Past Due (DPD), which moderated to 3.17%.

Key Performance Indicators in Q4FY26

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With the transitory challenges largely behind, Aavas enters FY27 with a clean slate, positioning itself to achieve its medium-term targets of 20%+ asset under management (AUM) growth and mid-teen return on equity (RoE). The company's strong performance in Q4FY26 underscores its ability to navigate industry headwinds and capitalize on emerging opportunities.

Maintaining a BUY recommendation with an unchanged target price of INR 1,725, ICICI Securities values the stock at 2.3 times its estimated market value for March 2027.