Micro-enterprise-focused non-banking financial company (NBFC) Aye Finance has announced its financial performance for the second quarter and first half of fiscal year 2027. According to the reported figures, the lender achieved its highest-ever quarterly net profit, balancing credit expansion with operational discipline. This financial update provides market participants with a clear view of performance trends across India’s underserved micro, small, and medium enterprise (MSME) lending segment following the company’s initial public offering in February 2026.
Q2 FY27 Financial Highlights and Profitability Surge
During the quarter ending September 30, 2026, Aye Finance registered a significant increase in its bottom line. The Profit After Tax (PAT) climbed by 151% year-on-year to reach ₹86.7 crore, compared to ₹34.5 crore in the same period of the previous fiscal year. This profitability growth was supported by a 24% rise in gross total income, which moved from ₹427 crore to ₹527 crore.
Net Interest Income (NII) expanded by 40% year-on-year to ₹334 crore, up from ₹238 crore in Q2 FY26. Pre-Provision Operating Profit (PPOP) also demonstrated solid momentum, advancing 54% to ₹198 crore. Disbursements for the quarter reached ₹1,403 crore, reflecting a 10% increase compared to the corresponding period last year.
Asset Under Management and Customer Expansion
The lender’s Assets Under Management (AUM) crossed the ₹7,500 crore threshold, settling at ₹7,597 crore, which translates to a 26% year-on-year growth rate. Operational reach expanded further as the institution onboarded over 49,000 new borrowers during the quarter, bringing its active customer base to 6.94 lakh accounts.
Operational efficiency metrics showed marked improvements. The operating expense (Opex) ratio moderated to an eight-quarter low of 8.6%, while credit costs declined for the seventh consecutive quarter to 3.8%. Net Interest Margin (NIM) stood at 15.6%, marking an expansion of 173 basis points year-on-year.
Asset Quality Amid Regional Headwinds
Despite localized drought pressures reported across specific agricultural and semi-urban belts in states like Maharashtra, Karnataka, and Madhya Pradesh, the lender maintained steady asset metrics through its cluster-based underwriting model.
Gross Non-Performing Assets (GNPA) improved sequentially by 29 basis points to 4.2% as of September 30, 2026. Net Non-Performing Assets (NNPA) remained controlled at 1.6%. Furthermore, non-overdue collection efficiency held firm at 99.2% for the quarter.
Capital Position and Management Outlook
The capital base established through the company’s ₹710 crore equity raise in its February 2026 IPO has provided a runway for loan book expansion. As of Q2 FY27, the company reported a net worth of ₹2,695 crore alongside a Book Value Per Share (BVPS) of ₹110.
Managing Director Sanjay Sharma noted that as the company leverages the capital raised during its recent public offering, return metrics are anticipated to improve progressively through subsequent quarters. Management retained its FY27 guidance, targeting an AUM growth rate of 25% to 30% and a Return on Assets (RoA) corridor between 4.0% and 4.5%.
Financial and Performance Analysis
Market and Business Impact
The reported figures indicate that Aye Finance is effectively scaling its unorganized micro-enterprise lending model. The ability to expand AUM by 26% while simultaneously lowering credit costs to 3.8% and trimming the Opex ratio to an eight-quarter low suggests strong operational leverage. In a lending sub-sector where regional agricultural stress often translates into collection challenges, maintaining a Non-OD collection efficiency of 99.2% demonstrates the resilience of the company’s cluster-based underwriting approach.
Financial and Valuation Analysis
A review of the financial results reveals compounding profitability. PAT surged from ₹34.5 crore in Q2 FY26 to ₹86.7 crore in Q2 FY27, while H1 FY27 PAT doubled from ₹65 crore to ₹161 crore. Return on Equity (RoE) expanded substantially, rising by 502 basis points year-on-year to 13.1% for Q2 FY27, up from 8.1% previously. Similarly, H1 FY27 RoE climbed by 464 basis points to 12.3%, and the annualized Return on Assets (RoA) reached 3.9%. With a net worth of ₹2,695 crore and a BVPS of ₹110, the balance sheet reflects adequate capitalization following the February 2026 IPO proceeds.
| Financial Metric | Q2 FY26 | Q2 FY27 | YoY Change | Analysis |
|---|---|---|---|---|
| Gross Total Income | ₹427 Cr | ₹527 Cr | +24% | Steady top-line expansion driven by portfolio growth. |
| Net Interest Income | ₹238 Cr | ₹334 Cr | +40% | Reflects higher earning asset yields and expansion in net interest margin to 15.6%. |
| PAT | ₹34.5 Cr | ₹86.7 Cr | +151% | Significant bottom-line growth propelled by scaling operations and declining credit costs. |
| AUM | Not Stated | ₹7,597 Cr | +26% YoY | Crossed the ₹7,500 crore milestone on the back of ₹1,403 crore in quarterly disbursements. |
| Return on Equity (RoE) | 8.1% | 13.1% | +502 bps | Demonstrates increasing efficiency in utilizing post-IPO equity capital. |
Key Takeaways
- Net profit for Q2 FY27 reached a record ₹86.7 crore, marking a 151% year-on-year increase.
- Assets Under Management crossed ₹7,597 crore, reflecting a 26% annual expansion.
- Credit costs decreased for the seventh consecutive quarter to 3.8%, while the Opex ratio dropped to an eight-quarter low of 8.6%.
- Gross NPA improved sequentially to 4.2%, and Net NPA stood at 1.6%.
- Net worth reached ₹2,695 crore with a BVPS of ₹110, backed by the capital raised in the February 2026 IPO.
- Management maintains its FY27 guidance of 25% to 30% AUM growth and an RoA corridor of 4.0% to 4.5%.
Frequently Asked Questions
Aye Finance reported a Profit After Tax of ₹86.7 crore for Q2 FY27, representing a 151% year-on-year increase.
The company's Assets Under Management crossed the ₹7,500 crore mark to settle at ₹7,597 crore.
Credit costs fell for the seventh consecutive quarter to 3.8%, and the Opex ratio moderated to an 8-quarter low of 8.6%.
Gross NPA improved sequentially to 4.2%, while Net NPA stood at 1.6% as of September 30, 2026.
Aye Finance reported a net worth of ₹2,695 crore and a Book Value Per Share of ₹110 as of Q2 FY27.
