Aye Finance Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Aye Finance Ltd trades at ₹167, in a confirmed uptrend and 17 weeks into that stage. That is +10.0% against its own 200-day average. It sits at 76% of a 52-week range of ₹108 to ₹186. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (1 week and counting).

Today the stock is in a confirmed uptrend — week 17 of stage 2, confirmed. At ₹167 it trades +10.0% versus its 200-day average and sits at 76% of its 52-week range (₹108–₹186).

Against the market, two honest reads. Cumulative: over the last 6 months the stock moved +54% while the NIFTY 500 moved +0% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (1 week and counting; last ahead the week of 2026-09-18) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Aye Finance Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: MID_EXPANSION. Still open: Gross NPA rising above 5.00% accompanied by non-overdue collection efficiency falling below 98.0%, demonstrating that credit quality recovery was not sustained.

What is proven. See the research file

What is not proven yet. Gross NPA rising above 5.00% accompanied by non-overdue collection efficiency falling below 98.0%, demonstrating that credit quality recovery was not sustained.

🚨 What would change our mind. Gross NPA rising above 5.00% accompanied by non-overdue collection efficiency falling below 98.0%, demonstrating that credit quality recovery was not sustained.

Layer 1 read, 22 August 2026 — KEEP. Profit tripled as bad-loan costs fell — but management has missed five of its own seven targets. Aye's quarterly profit rose from Rs 23 Cr in Dec 2024 to Rs 74 Cr in Jun 2026 because the cost of loans going bad fell from 4.6% to 4.0% while gross bad loans improved to 4.5% on a loan book growing 28%. That is a real earnings recovery, not a re-pricing — the market has actually paid MORE per rupee of book over the period, with price-to-book up 21% in eight quarters. The cap on conviction is credibility: the company missed its own sub-4% bad-loan-cost promise (delivering 4.3%), missed its growth target, and quietly relaxed its overdue-book goal from below 6% to 6.0-6.5% while reporting 7.01%, which is why I hold it at P2 rather than P1.

What would change Layer 1’s mind. Q2 FY27 bad-loan cost printing above 4.0% — the level management guided to and the level the Jun 2026 quarter only reached WITH a Rs 6 Cr overlay helping it. A clean rate above 4.0%, or the overdue book (PAR X) rising further from 7.01% rather than moving toward the relaxed 6.0-6.5% corridor, would mean the credit-cost normalisation that is the whole thesis has stalled, and the five missed targets stop being a credibility discount and start being evidence the business cannot hit its numbers.

Layer 2 read, 22 August 2026 — BENCH. Cheaper funding and better bad loans are real, but management's revised growth plan still needs proof. Credit cost fell to 4.0% including an overlay, and gross bad loans improved to 4.5%; the sector read independently confirms this company-specific recovery. But the same external review shows management reversed the approval-rate plan while maintaining its growth target, so BENCH is the honest middle ground.

What would change Layer 2’s mind. A quarter showing credit cost at or below 4.0%, gross bad loans below 4.5% and loan growth within the stated 25-30% range without reopening approval standards would flip BENCH to ADVANCE.

The test written in advance. Gross NPA rising above 5.00% accompanied by non-overdue collection efficiency falling below 98.0%, demonstrating that credit quality recovery was not sustained. — the thesis as written as stated by the next result.

The test written in advance. Management Guidance Volatility & Policy Shifts — Management Guidance Volatility & Policy Shifts Q2 FY27 credit cost above 4.0% or a further reduction in FY27 AUM guidance. by the next result.

The test written in advance. Approval Rate Compression Capping Disbursement Runway — Approval Rate Compression Capping Disbursement Runway Quarterly disbursements below Rs 1,300 Cr in Q2 FY27 or borrower additions below 35,000. by the next result.

🚨 What the surface reading misses. The surface reading is: Reported Q1 FY27 credit cost was 4.0% and included a Rs 6 Cr overlay. The research reads it further: The bundle does not disclose clean credit cost excluding the overlay, so an underlying rate cannot be calculated from the cited information.

🚨 What the surface reading misses. The surface reading is: The annual-results rows report FY26 revenue of Rs 1,815 Cr and PAT of Rs 194 Cr, versus FY25 revenue of Rs 1,460 Cr and PAT of Rs 171 Cr. The research reads it further: FY26 PAT growth of 13.5% is materially lower than the 109.8% Q4 FY26 and 138.7% Q1 FY27 quarterly year-on-year growth rates, showing that the recent recovery is not equivalent to full-year earnings growth.

Lever 7 · Consolidation — BUILDING. Q1 FY27 credit cost was 4.0%, including a Rs 6 Cr overlay, after 4.3% in Q4 FY26 and 4.6% in Q3 FY26. What proves it keeps working: Credit Cost Normalization & Asset Quality Trajectory. It stops working if Collection efficiency drops below 98.0% or PAR X reverses above 7.5%.

Lever 3 · Management change — BUILDING. 60-70% of branches average Rs 7-8 Cr AUM and management says they can scale above Rs 20 Cr; AUM per employee rose 12% YoY. What proves it keeps working: Operating Leverage via Branch Productivity & AI Underwriting. It stops working if AUM per employee growth turns negative or OpEx remains above 9.2%.

Lever 5 · Regulatory approval — BUILDING. The IND A+ stable and IND A1+ upgrades are expected to reduce incremental borrowing cost by 20-25 bps over the year. What proves it keeps working: Funding Cost Advantage & Rating Upgrade Tailwinds. It stops working if Wholesale liquidity tightens or the rating outlook is downgraded.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue For a bank, revenue is everything the franchise earns — interest on the loan book plus fee and other income.

Aye Finance Ltd reported ₹477 Cr of income in the Jun 26 quarter, +17.8% year on year. That is the 3rd straight quarter of year-on-year growth. Over 5 years it has compounded at 29.7% a year. The last full year, FY26, came in at ₹1,815 Cr. The last four reported quarters add to ₹1,872 Cr.

Why this happened. Q1 FY27 credit cost was 4.0%, down 29 bps sequentially from 4.3% in Q4 FY26. Non-overdue collection efficiency was 99.2%, and gross NPA improved to 4.5% from 4.77% in Q4 FY26. Management guides FY27 credit cost at 3.5-4.0%; the clean rate excluding the overlay was not disclosed. The 60 bps ROA bridge disclosed in the Mar 2026 call applies to a fall in credit cost below 4%.

FY26 revenue came in at ₹1,815 Cr (+24.3% on the year), capping 5 years at 29.7% compound. The latest quarter (Jun 26) printed ₹477 Cr, +17.8% year on year — the 3rd consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +22.1% growth against the decade's 29.7% — the current year is running slower than its own long-run rate.

FY26-Q4. revenue ₹515 Cr and profit ₹86 Cr as reported.

FY27-Q1. revenue ₹477 Cr and profit ₹74 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net margin Net margin — what the bank keeps of every ₹100 of revenue after every cost, provision and tax. It is the cleanest single margin we can read for a lender.

Aye Finance Ltd's net margin is 15.5% in the Jun 26 quarter, +7.8 percentage points against the same quarter a year ago. Across 6 fiscal years the net margin has ranged −10.6% to 15.5%. The current quarter sits inside that band.

The latest quarter's net margin is 15.5%, +7.8 pp against the same quarter a year ago. Across 6 fiscal years the net margin has ranged −10.6%–15.5%.

Why: the numbers show the net margin move clearly, but the cost lines behind it sit below what we hold — so we state the move without inventing its driver.

FY26-Q4. revenue ₹515 Cr and profit ₹86 Cr as reported.

FY27-Q1. revenue ₹477 Cr and profit ₹74 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Aye Finance Ltd earned ₹74.0 Cr of net profit in the Jun 26 quarter, +138.7% year on year. It is the 3rd consecutive quarter of growth. Full-year FY26 profit was ₹194 Cr. The 5-year compound rate is 62.7%. That is 15.5% of the quarter's revenue. The same quarter a year earlier earned ₹31.0 Cr.

Jun 26 profit was ₹74.0 Cr, +138.7% year on year — the 3rd consecutive quarter of growth. On the full year, FY26 printed ₹194 Cr (+13.5%), and the 5-year compound rate is 62.7%.

Why profit moved: revenue contributed +17.8% and the margin +7.8 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +111.8% vs revenue +22.1%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹515 Cr and profit ₹86 Cr as reported.

FY27-Q1. revenue ₹477 Cr and profit ₹74 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Asset quality — the ladder Gross NPA is the slice of the loan book where repayments have stopped. Net NPA is what remains after the money already set aside against those loans. Falling is healing; rising is damage arriving.

Aye Finance Ltd's gross NPA is 3.79% of the loan book in Dec 24. Net of provisions already set aside, 1.31% remains. Across the 1 quarters held here the book has ranged 3.79% to 3.79%. Falling NPAs are a loan book healing; rising NPAs are damage arriving.

Dec 24: gross NPA at 3.79% and net NPA at 1.31%. Over the 1 quarters we hold, the book's worst reading was 3.79% and its best is 3.79% — which is the current print.

The synthesis: profit growth at a bank is only as good as the book behind it, and this book is not yet on a clear healing streak. A note on depth: quarterly provisioning detail is not in our numbers yet, so this ladder reads levels and trend, not the cost of the cleanup.

Why the ladder moved: recoveries, write-offs and slippages each play a part, and that split sits below what we hold — the numbers show the healing; the driver mix does not travel with them.

The loan book We read the loan book through revenue — when the book grows, revenue grows with it. It is a rough proxy, and we say so: rate moves and fee swings can shift it a few points in any one year.

Aye Finance Ltd's revenue grew +24.3% in FY26 to ₹1,815 Cr, so the book is growing. The latest quarter ran +17.8% year on year. The net margin on that income is 15.5%, +7.8 percentage points against a year ago. Interest income is a proxy for the book; rate moves can shift it a few points in any one year.

FY26 revenue was ₹1,815 Cr, +24.3% on the year, and the latest quarter ran +17.8% year on year. The net margin on that revenue is 15.5% this quarter (+7.8 pp YoY) — growth with a widening margin on it.

The synthesis: a lender compounds when the book grows while the margin holds and the loan book stays clean — gross NPA is the loan-quality read we carry here.

Returns on equity and assets Two numbers rate a bank: ROE — what it earns on shareholder money — and ROA — what it earns on everything it deploys. ROE above ~13–15% earns its keep; below that, growth builds book slowly.

Aye Finance Ltd earns a return on equity of 9% in FY26. Its trough over the ladder below was −7% in FY22. For a lender the balance sheet is the operating asset, so equity return and asset return have to be read together.

FY26 ROE came in at 9%, recovered from a FY22 trough of −7%. Return on assets is withheld on this page — its two source series disagree for this quarter. That return is below the bar a bank must clear to compound book value quickly — which is also the honest reason the stock trades where it does.

Why ROE moved: profit compounded 62.7% a year over 5 years while the equity base grew more slowly — earnings recovering faster than book value builds is what lifts ROE off a trough.

The quarterly return-on-equity and return-on-assets curves, which only the second data source carries, are not drawn on this page: its two data sources disagree by up to 5.8% on reported income across 6 comparable periods. A figure two sources cannot agree on is not drawn — the gap is a decision, not missing data.

Debt

For a bank, borrowings are raw material, not a warning sign — solvency is read through the returns and the loan book. A manufacturer’s debt is a claim against its profits, so the debt-to-equity lens that works everywhere else misleads on a lender and is not applied here.

A manufacturer’s debt is a claim against its profits; a bank’s borrowings are its inventory — money taken in to be lent out. The debt lens that works everywhere else misleads here, so this page does not apply it. The solvency questions for a bank — is the loan book sound, is the equity earning — are read through the loan-book and returns sections above.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

No holder of Aye Finance Ltd moved a full percentage point over the last two years — the register is quiet. The register is read on the four disclosed classes only; nothing is inferred between filings.

Why this happened. The 571-branch network spans 18 states and 3 union territories. Management reported that 60-70% of branches average Rs 7-8 Cr AUM and can scale above Rs 20 Cr, while 44 split branches were profitable from day one. The FY27 OpEx target is 8.3-8.8%, with a 7.0-7.5% target over three years. Generative AI has been piloted for assessment of trading businesses.

The register over the last two years — .

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Aye Finance Ltd: the Z-score is omitted — it was built for manufacturers, not banks, and applying it here would be theatre. The Z-score was built for manufacturers and is not applied to banks and lenders, so solvency here is read from the capital and asset-quality lines instead.

Why this happened. India Ratings upgraded long-term debt to IND A+ stable and commercial paper to IND A1+. Weighted borrowing cost was 10.8% and incremental borrowing was 10.2%; management cited a further 10-15 bps rating benefit in Q&A and 20-25 bps over the year in the call summary.

The safety line in one sentence: the Z-score is omitted — it was built for manufacturers, not banks, and applying it here would be theatre.

Valuation For a bank we price the book, not the earnings: P/BV is what the market pays for each ₹1 of the bank's net worth. A bank below 1× book is priced below the value of what it owns, net of what it owes.

Aye Finance Ltd trades at 1.6× P/BV, mid-range by its own standards (58th percentile). Its long-run median P/BV is 1.6×, measured across 0.4 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/BV of 1.6× is mid-range by its own standards (58th percentile), against a long-run median of 1.6× measured over 0.4 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

The honest context for that discount: a bank earning about 9% on its equity is worth less per rupee of book, and the market has priced that in rather than overlooked it. The discount closes only if the returns themselves improve.

Put together: the multiple is unremarkable against its own past, so the story rests on the book-value line underneath it, not the multiple.

The PEG ratio, which only the second data source carries, is not drawn on this page: its two data sources disagree by up to 5.8% on reported income across 6 comparable periods. A figure two sources cannot agree on is not drawn — the gap is a decision, not missing data.

Stage: No read Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Aye Finance Ltd reads as no read on its fundamental arc. Under eight usable quarters on the growth trio — not enough history for an honest trajectory read. The read is built from 4 quarters across 1 curve, on partial evidence.

Why it matters: with too little history, an honest page says so instead of guessing a trajectory.

One or more growth curves carry a base-effect spike — a large year-on-year move off a near-zero or loss-making comparable quarter. Those spikes are capped before the classifier reads the trajectory, and shown pinned on the chart, so a single distorted quarter does not drive the stage call.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

Fewer than eight usable quarters on the growth curves — this page will not guess a trajectory from a stub of history.

4-Factor Sector Score

No sector-relative score — Aye Finance Ltd is score temporarily unavailable — [mlaSectorData] ambiguous sector slug "nbfc-others": NBFC - Others, NBFC Others for undefined.

The score is a rank WITHIN a peer set: every metric is scored by percentile against the other members. Without the peer set there is no score to state, so none is invented here.

Said versus delivered

What Aye Finance Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Underwriting Approval-Rate Strategy Reversed · 23 July 2026. In Mar 2026, management said approval rates would reopen from roughly 40%-43% toward 55% in the coming year, adding 8%-10% growth. In Jul 2026, management instead said the approval rate had shrunk to 45% and that it was keeping the policy tight, without explaining why the previously expected reopening was abandoned.

🚨 PAR X Target Relaxed · 23 July 2026. In Apr 2026, management targeted a reduction in PAR X to below 6%, with a 5.5%-6.0% range. In Jul 2026, it described 6%-6.5% as a good target while reporting PAR X of 7.01%, representing a meaningful relaxation of the prior asset-quality objective that was not fully reconciled by the denominator-effect explanation.

🚨 Mortgage PAR 90 Failed to Improve as Previously Expected · 23 July 2026. In Apr 2026, management expected mortgage PAR 90, then at 2.73%, to decline within the next three to four months and stated a target range of 2%-2.5%. In Jul 2026, mortgage PAR 90 was instead reported at approximately 3%, indicating that the expected near-term improvement had not materialized; management again projected future improvement but did not explain the miss against its prior forecast.

New Product Launch Milestone Delayed or Softened · 23 July 2026. In Apr 2026, management said market research on new products would be completed by the end of Q1 so that it could launch its plans. By the Jul 2026 Q1 FY27 call, management still described gold loans and solar loans as being surveyed and provided no launch timing, indicating a delayed or less concrete expansion plan without explanation.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions