Aadhar Housing Finance Ltd (NSE: AADHARHFC) Q1 2026 Earnings Call dated Jul. 25, 2025
Corporate Participants:
Unidentified Speaker
Renish Patel — Moderator
Rishi Anand — Managing Director & Chief Executive Officer
Rajesh Viswanathan — Chief Financial Officer
Analysts:
Unidentified Participant
Varun Palacharla — Analyst
Abhishek Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Aadhar Housing Finance Q1FY26 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Ranish from ICICI securities limited. Thank you. And over to you sir.
Renish Patel — Moderator
Yeah. Thank you Viren. Good evening everyone and welcome to other Housing Finance Q1 FY26 earnings call. On behalf of ICICI Securities, I would like to thank other management team for giving us the opportunity to host this call. Today we have with us entire top management team of other represented by Executive Vice Chairman Mr. Ishi Anand MD and CEO Mr. Rajesh Vishwanathan. CFO Mr. Sanjay Mulchandani, Head Financial Planning. I will now hand over the call to Mr. Rishi sir for his opening remarks. And then we’ll open the floor for Q and A. Over to you sir.
Rishi Anand — Managing Director & Chief Executive Officer
Thank you very much, Ranesh. Very good evening ladies and gentlemen. On behalf of Aadhaar Housing Finance, I extend a very warm welcome to all of you. We are pleased to begin FY26 on a very strong and promising note. This quarter has been a continuation of our disciplined execution and strategic focus. And I am proud to share that our AUM has reached an all time high of 26,524 crores. Reflecting a remarkable year on year growth of 22%. This achievement is more than just a number. It is a testament to the trust of our customers, the dedication of our teams and the strength of our business fundamentals.
It also reinforces our leadership position in the affordable low income housing finance space. A sector that continues to gain relevance in India’s evolving financial ecosystem. The affordable and low income housing finance segment has seen renewed momentum over the past year supported by proactive regulatory measures, improved credit demand and growing aspiration of home ownership. Especially among first time and low income buyers. These macro tailwinds have complemented on our ground efforts enabling us to scale responsibility responsibly and sustainably. Moving on to Aadhaar’s performance for this quarter. As mentioned earlier, in quarter one FY26, our AUM grew by 22% YoY at 26524 crores with disbursement standing strong during the quarter at 1979 crores reflecting a 32% YoY growth over the past year.
Even as we scale our lending operation, our focus on preserving asset quality remains unwavering. To ensure this to ensure this does not get compromised, we have continued to to fully concentrate on retail secured lending with no exposures to corporates or developers. Our asset quality remains healthy with gross NPA stable at 1.3% and collection efficiency consistently above 98%. The portfolio continues to be well secured with an average loan to value ratio of only 59%. Notably, the salaried segment now represents 56% of our overall portfolio reflecting our focus on stable income profiles. The average ticket size on AUM remains steady at INR 10 lakhs.
Only home loan continues to form the core of our business accounting for 73% of our AUM while the balance 27% happens to be micro loan against property. As a part of our commitment to inclusive and efficient growth and we are focused on expanding into high potential underserved regions, especially in smaller districts and talukas through our deeper impact strategy. This targeted approach has enabled us to deepen our outreach while maintaining a lean and agile operational model. It has also helped us strike the right balance between scale and sustainability, aligning well with our long term goals of impactful expansion and and optimal resource allocation.
This has helped us expand our reach pan India through 591 branches serving more than 3 lakh live customers across 22 states and 547 districts. Our network continues to grow in alignment with the strategy and during this set quarter we have added 11 new branches. Our portfolio continues to be geographically well diversified with no single state contributing more than 14% of our AUM, a testament to our calibrated and disciplined risk management framework. This diversification also marks a significant milestone in our broader mission to expand access to housing finance in under penetrated regions. It aligns closely with the government’s Housing for All vision and National Housing Bank’s mandate to drive financial inclusion across the country.
This mission has led us to the birth of our strategy of urban and emerging. We have based on our internal classification selected approximately 130 branches I.e. top 15 cities as urban and the balance is emerging. We spoke about this strategy in the last call as well. The quarter in discussion was effectively our first quarter under this new strategy and we seem to be going the right direction with broadly aligning separate focus for urban and emerging with regards to ticket size, potential yield and manpower. Moving on, we have mentioned in multiple intervals that for us as an organization, technology is central to how we operate and scale efficiently.
Our TCS enabled core system has helped digitize key processes across loan life cycle, improving turnaround times and customer experience. Over the past four years we have built strong data capabilities moving from basic reporting to advanced analytics. We are now leveraging AI and machine learning to enhance decision making, strengthen governance and support future ready operations. As FY26 takes shape, we are seeing steady improvement in the economic environment. The first quarter reflected a gradual pickup in the market sentiment supported by RBI’s rate cut, stable macro indicators and support Global Context the affordable housing finance sector in India continues to be the cornerstone of inclusive economic growth deeply aligned with countries vision of becoming a developed nation by 2047.
With urbanization projected to rise at 40% by 2030, affordable housing is emerging as a critical bridge to address the growing needs of migrant population across tier 2 and tier 3 cities. The sector continues to gain momentum driven by sustained urbanization, rising demand from first time low income home buyers and a consistent policy support. Additionally, government initiatives like PMAY 2.0, revival of interest subsidy scheme, a credit guarantee program and a continued support for the Swami Fund amongst others will give additional boost to the segment. A key macro development this quarter was RBI’s third consecutive repo rate cut, lowering it by 50bps to 5.5 in June 2025 which has further improved housing affordability ahead of the festive season.
We remain optimistic that these combined actions will accelerate formal credit penetration and sustained growth in the affordable housing segment. I am pleased to share that the CARE Rating has revised our rating outlook upward to AA from the old aa. This recognition reflects our consistent loan book growth, robust capital adequacy, strong asset quality, our collection performance remains stable and we continue to benefit from the well diversified funding mix. These trends along with our strong internal controls and governance framework have reinforced caer’s confidence in our ability to sustain both our business momentum and financial resilience over the medium term.
We would also like to highlight few important recognitions and accolades received recently. Aadhaar enters the 22nd state in the third quarter with a branch in Guwahati, Assam. We received the NBFC of the Year award under PMAY Affordable Housing. We received the prestigious NHB Excellence Award for Product Innovation. We received the Gold Award from CSR Times for our Clinic on Wheels initiatives. I also immensely proud to to let the audience know that Aadhaar under its vision of empowering women colleagues has launched its first ever all women branch in Indore and we continue to look for more opportunities across the country.
Lastly, I would want to conclude by saying that Aadhaar Housing Finance is well positioned to sustain its growth trajectory backed by strong operational foundation, expanding reach and robust technology infrastructure. With continued policy support, a stable macro environment and rising demand for affordable housing, we are confident in our ability to maintain leadership in the sector as we move forward. Our focus remains on creating long term value for stakeholders while deepening our impact on underserved communities. Now I would like to hand over to our CFO Rajesh Vishwanathan to take you all through the financial performance of the quarter.
Rajesh Viswanathan — Chief Financial Officer
Thank you Rishi. Good evening everyone and thanks for joining in late on a Friday for this call. I would like you to take you through some of the financial numbers. Bear with me while I repeat some of the highlights that Rishi has pointed out. In Quarter 1 FY26 our AUM has grown 22% on a YoY basis our overall borrowings as at 30 June 2025 stood at 16,876 crores compared to 14,019 crores as at 30 June 2024. The current borrowing mix stands at 48% from Banks, NHB share is 24%, NCD share is 23% and ECB and others make up 4% as highlighted by Rishib.
One big achievement for the company was an upgrade of our rating to AA by CARE during the quarter and an upgrade to a positive outlook from a stable outlook from ICRA. Our incremental borrowings for quarter one FY26 stood at 1165 crores which came in at around 8.1%. Currently we have about 43 borrowing relationships. We have drawn 300 crores from NHB in quarter one FY26. The cost of funds as we exited quarter one FY26 stood at 8% in terms of fixed and floating nature of the asset and liability side, 75% of both our assets and borrowings are floating in nature.
Undrawn sanctions as at 30th June 2025 is around 1500 crores. Liquidity as we ended quarter one FY26 was 2181 crores. The exit portfolio yield is 13.8%. In terms of spread, the exit spread was 5.8%. Overall NIMS for quarter one FY26 was 8.8%. Our cost to income ratio where we had seen more than 100bps improvement in last financial year. Happy to state that we have managed to even drop it further in the current quarter and compared on a Y on y basis the quarter 1 FY26 cost to income has come in at 36.1 compared to 36.7 in quarter 1 FY25.
GNPA 1.34% compared to 1.31% in quarter 1 FY25. This is a seasonality impact over here. Capital adequacy asset end of 30 June 2025 stood at 44.1% Tire 1 and 0.5% Tire 2. And last but not the least, for the first quarter FY26, the PAT came in at 237 crores compared to 200 crores in quarter one FY25 rendering a 19% growth on a Y1 basis. With that we can open up for questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use hands just while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of varun from Kotak Securities. Please go ahead.
Varun Palacharla
Hi sir. Thanks for the opportunity and congrats on a good set of numbers. With regard to the seasonality that you just mentioned that the between 4q and 1q this quarter appear to be a bit higher than what it was last year. In the same period, are you seeing any heightened stress that is localized like any way in some particular region, state or particular cohort of customers that you see the stress speaking out or is it a broad based thing? And the second question is with regard to the repayment rate calculated repayment rate appears to be low at about 15%.
Is this just some seasonal effect here as well? Or are you seeing lower btouts which is a bit surprising because other players have called out higher competition. So can you just call out the BTO trade as well? Thanks. Those are my questions.
Rishi Anand
Great. Yeah. Varun, thank you so much for your questions. So Varun, part one of your question was with regards to the stress. If I look at our numbers on quarter one yoy basis we were GNP of 1.31% moving to 1.34%. So I would not say that there is any movement. It is more flattish and it is actually seasonality effect. We are we seeing any impact on any regions? I would say no because our portfolio remains to be constant. The second part I will hand over to Rajesh please.
Rajesh Viswanathan
Yeah. In terms of asset rundown, you are right. The btout has come in at 5.3% for this quarter. Typically in our business we have seen that btout is actually spikes in quarter four when there is very high competition. So 5.3% was for this quarter. And just to put it in context, quarter one FY25 last year was around 5.9%. So 5.3 versus 5.9 same time last year. Answer that question Varun.
Varun Palacharla
Yeah, thanks. Yeah,
Rishi Anand
thank you Varun.
operator
Thank you. The next question is from the line of Mananti Joriwala from ICICI Prudential. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Just in light of some of your larger peers giving some commentary on MSME being stressed. Just wanted to understand if there is any color that you can provide on the same and how do you see the credit costs for this year for the full year and how should it trend across the quarters? That’s the first question.
Rishi Anand
Hi Manan. Manan, msme, you know we will have to look at what our portfolio is. Our portfolio is actually not the MSME portfolio. I was these are we do micro loan against property which is about 25% of my portfolio. Are we seeing any stress? No, we are not seeing any stress. Our bounce rates on a yoy basis are steady state. Exactly same. I would say our GNPAs and delinquencies are same. If I do a data cut on specifically on the Rollergase property that I do. So good news is that we are not seeing any stress on that portfolio.
Rajesh Viswanathan
And manan on the credit cost typically if you look at it last time also we had ended up with a credit cost of approximately 57 or 58 crores for the whole year and approximately 1920 crores had come in quarter one and approximately if you take quarter one and quarter two H1 put together it was about 3536 crores. So in that sense I think if you look at the slight growth that we have in the AEM I think it will be better to extrapolate the 57. So we believe that overall credit cost for the whole year will be tending in the range of about 25 to 27bps in terms of current quarter obviously because the seasonality looks high at 40bps odd. But we believe that we should be able to hold it within a range of about 25 to 27bps as we exit the year.
Unidentified Participant
So basically the operating environment is not materially different from what it was in the last year. That’s what you see.
Rajesh Viswanathan
No, I agree with your point. It is not different at all. In fact if it is better meaning if you look at the numbers that we spoke about incrementally, the growth numbers, etc. So it’s kind of bettered but from a former pure asset quality perspective it remains steady state.
Unidentified Participant
Right, Fair enough. So could you give us some color on the average ticket size that you have between home loans and lab segment?
Rishi Anand
Yes. You have to just give me one second. Okay, so our home loan ticket size on AUM disbursement, sorry is 15.7 lakhs. And non home loans, as I said, Micro Micro lab is about 9 lakhs. Total average at the company level incremental is 12.7. And on AUM, I indicated it is 10 lakhs on AUM.
Unidentified Participant
Okay, okay, fair enough. And could you explain how we should think about the spreads going on on a quarter on quarter?
Rajesh Viswanathan
Yeah, I think to be we have seen some benefit that has come in the current quarter on account of a drop in the cost of funds for us. We are, we will be assessing as banks start passing on mclr. We believe that that should happen somewhere in quarter two and quarter three. And since a percentage of our book is floating, we will also be obliged to pass it on to our borrowers. So the way of looking at spreads over here is currently we are at 5.8%. We were about 5.7 as we exited the last year. So the exit spread was the 5.7 March 5.8 Q1 FY26. So it should be they’re about in the same range of 5.7% as we look ahead here.
Unidentified Participant
Sure. And could you talk about how the. Disbursements are picking up under the PMAY scheme?
Rishi Anand
So see Manan, I explained last time also. So there is, I would not say disbursement are picking up because of pmi. Disbursement comes and then it goes to the regulator to tag it as pmi. So it’s the other way around. But having said that, we were fortunate enough to be the first ones to draw down subsidy for our consumers under the PMOI 2.0. And you know, our customers, the first set of customers were called by the regulator and they were given out letters. As we stand today, close to about 10 crores of subsidies already disbursed to our consumers and the journey continues.
Unidentified Participant
Right, fair enough. And any guidance on growth for this year?
Rajesh Viswanathan
Yeah, I will give you. But coincidentally on pmi, you know we get to get the data of the industry. We happen to be the number one leading player on PMI subsidy on growth guidance. We continue to maintain our growth guidance of generally at around 20, 22% of AUM. 18 to 20% on disbursement.
Unidentified Participant
Right. That’s all from my side sir. Thank you.
Rishi Anand
Thank you so much Manan.
operator
Thank you. The next question is from the line of Abhishek Jain from Alpha Accurate Advisors Private Limited. Please go ahead.
Abhishek Jain
Thanks for opportunity and congregate for a strong set of numbers. My first question on the AUM growth, you have guided around 21% AUM growth in FY26. So which are the key states which will drive this growth and how much it will be sustainable.
Rishi Anand
So Abhishek, you know I would. It is not fair on my part to say, you know, particular state will guide more, more growth, you know. And you’ll have to go back to my statement saying that we are now driving urban and emerging. Right. So emerging is in this particular year. Emerging will give me slightly higher growth than my urban locations.
Urban locations are steady state. We are not, you know, adding more branches, etc. It is the focus is more towards emerging. A combination of both will give us the desired 21% average growth that we’re talking about.
Abhishek Jain
And how is the BTO strange across urban versus emerging branches? Where is the state more visible, urban or emerging?
Rishi Anand
So generally while I don’t have the data cut right away but generally urban will have a slightly higher btout rate.
Abhishek Jain
Okay.
Rishi Anand
And I will ask Sanjay to come back to you on that urban emerging data.
Abhishek Jain
Okay and my last question on that. Many peer companies are indicating that they have a lot of the competitions on the prime segment. So just wanted to understand that how is the growth potential and the risk reward dynamics of the prime housing segment versus the affordable segment at this point of time.
Rishi Anand
Abhishek, I don’t think it will be fair on my part to comment on prime because we are not a prime player at all. We are in the bottom of the pyramid which is affordable.
So affordable, you know, whatever you talk about competition, you talk about people operating in the affordable space, they continue to be the same set of people and all of us are expanding reach and growth. So prime I will not be able to come in too much.
Abhishek Jain
Okay sir, thanks for that.
Rishi Anand
Thank you so much Abishik.
operator
Thank you. The next question is from the line of Nish from Investech. Please go ahead.
Unidentified Participant
Thanks for the opportunity sir and conversations for a good set of numbers. The first question is can you share one plus bpd data for the quarter at the end of the quarter?
Rishi Anand
Yes, Nitesh, how are you? So one plus for us, end of quarter in question is 7.1%.
Unidentified Participant
And how is the trend in this number? Is it stable?
Rishi Anand
Y o Y I, I would say, I would say it is. It is exactly same as we’ve been talking about seasonality impact. In quarter one we were close to about 6.2, 6.4%. In a YOY basis we are 7.2 but currently under control.
Unidentified Participant
And if you can also share the sourcing mix in terms of connectors and own employee that would also be useful for the Q1.
Rishi Anand
Yeah, sure, sure. Nitesh. So Q1 the direct mix has jumped from a 57, 58% to 61% and the balance is DSS.
Unidentified Participant
Okay, that’s quite good.
Rishi Anand
Thanks for emerging. Our emerging strategy starts to play around. The proportion of direct mix will slightly start inching up.
Unidentified Participant
What is the definition of emerging? Emerging?
Rishi Anand
Yeah, you know we have not gone by scientific definition of emerging as I indicated in my opening call that we have internally said that top 15 cities of the country which contributes close to about 132 branches and the top 15 cities will be top metros are all urban for me and rest balance India is emerging for me. And if I can give you a few examples, if that helps, let us say pick up APTL in aptl, Andhra Pradesh, Telangana, Hyderabad would be urban. Vanapathi and Karnoon will be emerging for me. If I pick up Rajasthan as an example then Kota would be urban, Jaipur would be urban.
But Bundy, Deoli, Birwada will be emerging for me. And in emerging I have three categories abc. So they’re accordingly divided based on potential and, and you know what kind of spreads that I can derive from that location.
Unidentified Participant
130 cities are urban and rest of them are emerging.
Rishi Anand
No, not 130 cities. 130 branches. 15 cities.
Unidentified Participant
15 cities, 1 5.
Rishi Anand
Okay, that’s right.
Unidentified Participant
Okay. And the last question is on what are the plans to add branches this year.
Rishi Anand
So as we indicated in the beginning of the year also we will keep adding about 50 to 60 branches year on year basis. And we are on the on track. We have already in quarter one launched 11 new branches including one new state which is, which is Assam.
Unidentified Participant
So thank you.
Rishi Anand
I would want to add, I, I, I would. Anita, I would want to add here in, in the branches. You know when I say 50, 50 branches, 15 branches, 15 will be an urban location and about 35 branches will be in emerging locations.
Unidentified Participant
That’s it for my side. Thank you. Thanks a lot.
Rishi Anand
Thank you Nitesh, thank you very much.
operator
Thank you. The next question is from the line of Panka Cheddar from Dam Capital, please go ahead.
Unidentified Participant
Yes, it is Sanket here on good set of numbers and particularly on the 30 +DPD which has stayed steady quarter on quarter. Just wanted to understand within that stage three has moved up by 31 days and stage two has come down by similar quantum. So apart from say usual Q1 specific inch of were there any specific accounts which were moved to stage 2 plus stage 3? Just wanted to understand better on that. Sorry if you have already alluded on earlier.
Unidentified Speaker
No, I think there was no direct question. I think the flow from stage two to stage three is a normal phenomenon which has happened during the quarter. And so whatever was in opening stage two during the quarter may have slipped into a stage three and hopefully during the, during the year we will be working on this and getting it out of npa. That is the normal process which we run with. So this is a pure seasonality where stage two flows to stage three. And then typically what happens is once it flows into stage three, it also allows us to start surface action on the, on the, on the, on the customer so that we can add on.
Rishi Anand
Right. So generally, you know, that is what you see when we say seasonality. It’s a very broad based word. What we do is some accounts are allowed to be flowed in quarter one so that you can go ahead and start doing, you know, your legal process. Right. Which is, which is typically called surface E. And that can happen only when the account close to 90 plus. These will be typical sticky accounts as we call them, who continuously are delinquent and then they try to be only 61, 90 buckets. Such accounts generally would flow and that’s the seasonality we talk about.
And then we do surface C which is a six month process and then you see start seeing downward trend on NPAs.
Unidentified Participant
Perfect. And since you indicated that maybe the SME or MSME specific chain would not be say that in our case we operate in a different segment. Do we expect this 5% 30 plus DPD as a pool to sustain and not go beyond that maybe throughout the year or you expect it to come down?
Rishi Anand
No, we definitely expect it to come down, Sanket, because if you look at, you know, on a FY basis also we’ve always been in the range of about 3.5 to 4%. So we are today standard about 4.65%. With the efforts that goes around the next nine months, it is, it is bound to come down.
Unidentified Participant
Oh sure. That answers my question. Thanks a lot.
Rishi Anand
Thank you Sanket.
operator
Thank you. The next question is from the line of Yash from Citigroup, please go ahead.
Unidentified Participant
Hi sir, thanks for taking my question. So one question on this differentiated strategy on urban and you know, emerging locations. Since this is the first quarter, so how different is the underwriting infrastructure in both? And since we believe that we could extract benefit on the growth side from emerging, would this differentiated strategy also lead to some extract help us extract benefit from the asset quality as well by focusing solely on emerging?
Rishi Anand
Okay, yes. When it comes to the back end functions which is underwriting operations, collections, technical visit of the property, everything remains common for urban and emerging as earlier indicated. You know, we have a hybrid underwriting mechanism. All the salaried profiles are underwritten centrally at something called regional processing centers. Whether it is for urban or emerging, that happens for both urban and emerging. It is the same process. The self employed consumers are underwritten from the branch network and it continues for urban as well emerging. So the underwriting standards, underwriting process, even operation process, technical process, everything remains common as far as you know, leveraging the emerging.
Yes. When you focus more on certain locations, your asset quality one is growth is bound to come in and asset quality is bound to improve. So that’s what I think the agenda of the company is to realign our focus Today as I indicated to the first person we spoke to, 55% of my incremental business was coming from urban and the intent is to change this 55% from emerging.
Unidentified Participant
Got it. And the second is on this MFI exposure related customers which you had shared last time as well, which I believe had dropped to around 7,000 customers. So any meaningful impact we saw in the. Obviously it is seasonality in OneCube but any meaningful impact we saw from Tamil Nadu, Karnataka as well, or.
Rishi Anand
I not specific to Tamil Nadu, Karnataka, the number of customers remain more or less same, 7070, 77 customers delinquent broadly has dropped to about 2000 customers from a. From a 2600 customers it dropped about 2100 customers and NPAs out of it. And Delhi, when I say delegates across the bucket, NPS will be around close to about 550 customers. So I would say there is a slight improvement rather than datigation.
Unidentified Participant
Okay, slight improvement in the. So sort of this MFI led customer.
Rishi Anand
Performance of the MFI exports. Customers. Yes.
Unidentified Participant
Okay.
Rishi Anand
MFI exports and nothing very, nothing very specific in Karnataka and Tamil Nadu.
Unidentified Participant
Got it. And lastly sir, if you could just share the incremental yields in one queue.
Rishi Anand
Incremental Yield stands at 13.45%.
Unidentified Participant
So it’s slightly dropped from 13.55 is it?
Rishi Anand
No, it was 13.5 which is full year. So 13.43 more or less there.
Unidentified Participant
Okay, got it. Thank you sir. That’s it.
Rishi Anand
Thank you Yash.
operator
Thank you. The next question is from the line of LALITP from Attic Stoke Broking. Please go ahead.
Unidentified Participant
Yeah. Hello sir. Thanks for giving the opportunity and congratulations on your results. Two brief questions. Your gross stage three if I see as a percentage has actually improved on a sequential basis. Generally it is seen that there is some seasonality impact in the first quarter which is, which is not visible this time. So one thing that that could be that you know that the, the book is behaving really well or is there some kind of a spillover or late spillover of that aspect that can be seen in Q2? Just your sense on thoughts on that, sir.
And secondly overall you know are self employed LAP category loans particularly are you seeing any change in environment or have you done any changes in your credit tightening or things like that? How are you reading the situation, sir? Thank you.
Rishi Anand
Thank you Lalitab. I will answer your second question first. As I indicated we are not MSME Lab consumers because our ticket size remains very very small. We are incrementally only 9 lakh. Ticket size on the book is about 7.8 lakhs. So we do micro load case property. No stress observed on even on a yoy basis and even on a sequential basis. Our bounce rates, our our NPAs, our delinquency remains steady state. Hence we don’t want to change our approach whether on underwriting or on property. One thing I would want to add is close to about 95% of our consumers in LAPP are self occupied residential property.
The only change that we have done in approach recently is we wanted to take only residential properties which will mean that new incremental business will be 100% residential property. But that is only temporarily. We have taken that decision but we will continue to focus only on micro lab.
Rajesh Viswanathan
And on the first part of your question, the seasonality that we keep talking about is a comparison of as we end year end which is March 25 versus June 25. So March 25 when we ended our NPA on AUM was around 1.05% which has moved to 1.34%. And this is the movement of anywhere between 25 to 30bps which is always visible between quarter four and quarter one of the next year. And that is a seasonality impact which basically stems down during the year. And as we end the year again we probably go back to the 1.10% type level.
Unidentified Participant
Yes, sir. Thank you. Thanks a lot.
operator
Thank you. The next question is from the line of Faraz Motani from Paragon Partners. Please go ahead.
Unidentified Participant
Hi. Hi. Thank you so much for the opportunity. I have couple of questions on geographical expansion. So I see that we have entered a new state in the northeastern region, Assam. The first question is that is this more of a pilot expansion wherein we are opening a couple of branches or is this a full, full blown expansion by opening state and potentially other adjoining states? Second question on the similar lines is that what kind of competition are you seeing in our affordable housing finance product? Maybe from other HFCs that are already present in those states.
Rishi Anand
Okay, great. Thank you Faraz for asking those questions. So when it comes to geo expansion, when it comes to new states, the strategy is very clear. First is we identify the relevant cities and branches, cities where we can go and open branches. So we identified a step one, Guwahati in Assam. Given the dynamic geopolitical dynamics that operate around the northeast states, we have not wanting to go full blown but we have identified four or five branches or cities which makes business sense to be in. And we will take, you know, calibrated steps as we move ahead.
Right now it is going to be guarantee we are going to be settled, settling down in Guate, understanding the dynamics of northeastern states and then expand thereon in relevant cities. Your second question was with regards to competition. As I said in one of the one of the discussions little while ago, I. We are not seeing any fierce competition because the number of players broadly remain the same. There is little more than opportunity available in the market. We are all operating in the same market. We have created our own niche. But we happen to be as in the opening statement I said, we happen to be the largest in terms of aum, largest in terms of incremental disbursement, largest in terms of our distribution network in the segment that we operate.
Unidentified Speaker
Got it. Thanks a lot.
Rishi Anand
Thank you, Faraz.
operator
Thank you. The next question is from the line of Darshan Devora from Indwesh Group. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Just a question on the ROA and roe. Can you give some guidance on what we plan to achieve in terms of ROAR for FY26 and also what would be our aspirational ROE for this business?
Rajesh Viswanathan
Okay, I’ll come to aspirational. I think, I think we will be targeting an ROA in the range of about 4.2 to 4.3% as we exit current year for current financial year, 4% is obviously because of the credit cost which gets baked in in quarter one. See aspirationally if you look at the way the business is or this is more of not a long term guidance but more of the way the math stacks up is that if you look at the way the ROE and ROE will Happen is that two years back we delivered ROE between 4.2 to 4.3% which also translated to around 18% ROE.
So to be very honest, on a long term sustainable basis, that is a sort of ROE that we would like to hit. Whether it’s going to happen in two or three years, I don’t want to comment on that. But typically anywhere between a 4.2% ROA and anywhere between a 17 and 18% ROE is a sort of a good sort of a math for the business that we run. Current year we would like end between. 4.2 to 4.3% ROA.
Unidentified Participant
Got it. And the second question I had was regarding the, you know, guiding the loan book. What percentage of our loan book would be self construction? Whether you know, where the customer, the applicant is self constructing his own vis a vis purchasing, you know, a ready flat or you know, either resale or a builder flat.
Rajesh Viswanathan
Darshan, I’ll give you the complete breakup. So self construction happens to be 25%. Purchase of ready built property is about 43% P plus C. Purchasing a plot and constructing thereon is about 7% and the balance is micro loaner is property.
Unidentified Participant
Okay, all right, appreciate that. Thank you. That’s awesome.
Rajesh Viswanathan
Thanks.
operator
Thank you. The next question is from the line of Dixit Shah from ASAN Capital. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Rishi Anand
Yes, yes, very much.
operator
Yes Mr. Dixit, please go ahead.
Unidentified Participant
Yeah, so my question was firstly with respect to a statistical one, what is that of the total AUM individual housing loan book as a, as a percentage of the number.
Rajesh Viswanathan
You want? Pure home loan. Right. Individual housing is 73% and the balance, balance happens to be loan against property.
Unidentified Participant
Understood. Now coming to a question with respect to the strategy. So with respect to urban and emerging strategy that we have what will be the approximate rate differential with respect to the yields that we would say that emerging emerging location will have over your urban urban location.
Rishi Anand
So if I can indicatively tell you urban typically gives about 12, 12 and a half percent yield, incremental yield, your emerging will range between 14.5 up to 16%.
Unidentified Participant
14.5 to 16%. That’s right. And with respect to, with respect to question on our underwriting, so Typically with respect to what on call of our one of our peers not in exactly in the segment that we have but the peer that is more focused in the southern region. They had categorically called out that they are seeing a little bit of a slowdown specifically in the sub 20 lakhs segment of the ticket size. They are not seeing enough demand or the PMAY 2.0 has not seen as euphoric as a demand and that was seen in PAMAY 1.0.
What is your sense in this in the space with respect to in the southern markets? Because from the data that I have seen with respect to your in the southern region you are a good player and leading in some of the states. So what is the sense of the competition in that segment and how would you look at the demand environment in that in that region for that segment?
Rishi Anand
Right Dixit? So yes you are right. We happen to be a relevant player in the southern market as well. In fact, one of the largest markets in the top three markets is Andhra Pradesh, Telangana. And while he was making the statement I was thinking, you know, I don’t know why this statement has come in the industry that there is a slowdown. There seems to be no slowdown. In fact our quarter one numbers are have moved positively across across the 3, 4, 4, 7 states. So I don’t see any slowdown happening there. I missed the second part of your question.
But we don’t see any slowdown.
Unidentified Participant
So with respect to that because how the credit culture. So is that like because of the MFI audience in the state of Karnataka, the Telangana also having a few bills being passed. So is so is there any you know, materially different credit behavior? Because some of the players were saying that they are seeing a bit of a spillover impact in their books.
Rajesh Viswanathan
No. So if I can give you top five states in best credit culture out of the top five states two states are from south which is Andhra Pradesh, Telangana and Tamil Nadu. You know, so I again I fail to understand why people are making such statements. These are good states. I think this is, this is eliminating from the fact that the MFI issue and which happened in the ordinance that was passed in Karnataka and Tamil Nadu. Fortunately for us we are a secured loan product so we are seeing no impact. In fact these are pristine locations.
Unidentified Participant
And just the final one, what would we look at with respect to like branch addition with respect to a long term like the 50 to 60, 50 to 60 branches that you had said, will that be steady state say like for two, three years like year by year you might revisit. And then.
Rishi Anand
So when we say 50 to 60 branches year on year, this is for three years from now.
Unidentified Participant
Probably by FY28 would be around 700 plus branches. Okay. Thank you very much.
Rishi Anand
Thank you so much.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Rishi Anand
On behalf of the Aadhaar Management, thanks a lot to all the participants on this call for taking time out on a Friday evening and joining the call. I’m sure that this has been a very eventful quarter for the company and hope we have similar results to share with you in the forthcoming quarters of the current financial year. Thank you and good evening.
operator
On behalf of ICICI securities limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.