Aye Finance shares crash 8% despite a 144% YoY jump in Q1FY27 profit. Details here
AI Summary
Aye Finance's share price fell nearly 8% despite a remarkable 144% year-on-year increase in profit for Q1FY27, attributed to strong demand and improved asset quality. However, the company experienced a 13.3% decline in profit compared to the previous quarter, leading to investor concerns. Overall, while the company shows robust growth in AUM and disbursement, the quarter-on-quarter profit drop has negatively impacted market sentiment.
Aye Finance share price crashed almost 8% in intraday trade on the BSE on Wednesday, 22 July, despite the company reporting a stellar 144% year-on-year (YoY) jump in its profit for the April-June quarter of the financial year 2026-27 (Q1FY27).
The small-cap NBFC stock opened at ₹191.15 on Wednesday against its previous close of ₹189.60 and crashed 7.6% to an intraday low of ₹175.15 after the company released its Q1FY27 results.
In an exchange filing during market hours on 22 July, the company said its June-quarter profit after tax (PAT) grew 144% YoY to ₹74.5 crore from ₹30.6 crore in the same quarter last year, reflecting the compounding benefits of scale and tighter risk discipline.
However, on a quarter-on-quarter basis, the company's profit dropped 13.3% from ₹85.91 crore in Q4FY26.
Total revenue from operations for the quarter rose 17.7% YoY but dropped 7.3% QoQ to ₹477.37 crore.
GNPA for the quarter came at 4.49%, and NNPA stood at 1.67%, down 28 bps and 12 bps, respectively, from the previous quarter.
The company reported six quarters of continuous reduction in credit cost, which stood at 4.01% in Q1FY27, down from 4.30% in Q4FY26. It expects this trend to continue through FY27.
Aye Finance reported a 28% YoY growth in AUM to ₹7,324 crore from ₹5,721 crore, driven by a 38% increase in new customer onboarding, signalling strong demand for credit across our target segment.
Disbursement grew 22% YoY to ₹1,219 crores during the quarter, keeping the company on track for its targeted growth of 25-30% for the year.
The company added 44,736 new borrowers during Q1FY27, reflecting a 38% YoY improvement.
“Our Q1FY27 performance reflects the robustness of our cluster-based underwriting model in serving India's micro-enterprise segment. We delivered 144% improvement in PAT and 28% growth in AUM YoY, with a 29bps reduction in our credit costs," said Sanjay Sharma, Managing Director, Aye Finance.
"The improvement in asset quality alongside strong profitable growth demonstrates the management’s philosophy of scaling up with good credit discipline,” Sharma said.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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