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 ₹173, in a confirmed uptrend and 11 weeks into that stage. That is +20.5% against its own 200-day average. It sits at 95% of a 52-week range of ₹108 to ₹176. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 12 straight weeks.

Today the stock is in a confirmed uptrend — week 11 of stage 2, confirmed. At ₹173 it trades +20.5% versus its 200-day average and sits at 95% of its 52-week range (₹108–₹176).

Against the market, two honest reads. Cumulative: over the last 4 months the stock moved +60% while the NIFTY 500 moved +4% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 12 straight weeks — 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 31 May 2026. Where it sits in its own cycle: RECOVERY_FROM_TROUGH. Our fortnightly research layers last read it on 19 July 2026.

What is proven. See the research file

What is not proven yet. Four guidance revisions in a single quarter (Mar → Apr 2026): credit cost target missed, AUM growth lower bound cut, mortgage ceiling raised, normalized credit cost range revised upward — none explained.

Layer 1 read, 19 July 2026 — KEEP. Real earnings turn at a young lender, but management keeps missing its own numbers — track, don't chase. Aye's profit doubled year-on-year as credit costs fell for a fifth straight quarter and its lending margin jumped from 9% to 19%, and at 1.63x book it is fairly, not richly, priced despite the scary-looking DCF discount. The catch is credibility: management logged four guidance inconsistencies in a single quarter and missed its own sub-4% credit-cost target, coming in at 4.3%. That keeps it a watch-list name rather than a deploy until the next credit-cost result confirms the normalization is holding.

What would change Layer 1’s mind. A second consecutive quarter of annualized credit cost above 4.5% (per the timeline's own falsification), OR approval rate failing to recover toward 46%+ — either confirms the guidance-credibility risk is structural and breaks the ROA-4-4.5% normalization thesis; conversely a clean sub-4% credit-cost print would upgrade this toward P1.

Layer 2 read, 19 July 2026 — BENCH. Real micro-MSME lending inflection, but guidance credibility is unproven and the sector set is governance-flagged — keep tracking, not deploy. AYE's spread genuinely expanded (financing margin 9%->19%) as PAT doubled to 86cr, and the scary -74% MoS is a wrong-lens artifact — on price-to-book it is 1.63x, fair versus a 1.8-2.8x peer band. What holds it on the bench is external: the sub-sector stream reads BEARISH ('right NBFC cycle, wrong ticker set... AVOID') and DIVERGENT [sector_qualitative_bundles / sector_timelines verdict], institutions are absent while promoters exited 17.3pp, and management has already missed its credit-cost (4.3% vs <4%) and AUM (27% vs 29-30%) guidance with four revisions in a single quarter. Deploy-readiness needs the next credit-cost print to confirm.

What would change Layer 2’s mind. A clean Q1 FY27 credit-cost print inside the guided 3.5-4% range (resolving R1/G1) WITH promoter/institutional stabilization (promoter_delta turning non-negative) would flip BENCH->ADVANCE. Conversely, a fresh AYE-SPECIFIC governance/regulatory finding (Tier 1-2 source) or another credit-cost MISS would flip toward DROP.

The test written in advance. Management Guidance Credibility — Repeated Downward Revisions — Management Guidance Credibility — Repeated Downward Revisions FY27 Q1 credit cost annualized vs guided 3.5-4% range by the next result.

The test written in advance. Bihar Concentration + Microfinance Regulatory Risk — Bihar Concentration + Microfinance Regulatory Risk Bihar ordinance text released; Bihar monthly collection efficiency dropping below 97% by the next result.

The test written in advance. Approval Rate at 42% — Volume Ceiling Until Portfolio Seasons — Approval Rate at 42% — Volume Ceiling Until Portfolio Seasons Approval rate crossing 48% and disbursement growth sustaining >20% YoY for 2 consecutive quarters by the next result.

Lever 7 · Consolidation — BUILDING. Five consecutive quarters of credit cost decline (5.5%+ → 4.3% annualized). Each 25-bps drop adds ~40-50 bps to ROA from the same asset base. What proves it keeps working: Credit Cost Normalization. It stops working if FY27 Q1 credit cost annualized vs guided 3.5-4% range.

Lever 3 · Management change — BUILDING. Mortgage mix at 23% (from 12% in FY24), targeting 30-35%. Mortgage PAR 90 at 2.7% vs hypothecation 5.95% — improves blended GNPA and reduces provision requirements per rupee of AUM. What proves it keeps working: Operating Leverage via Mortgage Mix Shift. It stops working if FY27 Q1 credit cost annualized vs guided 3.5-4% range.

Lever 5 · Regulatory approval — BUILDING. Rs 1,010 Cr IPO (Feb 2026) removed liquidity constraint that compressed H1 FY26 disbursements. 40-50 new branches planned FY27 in Tier 2-3 clusters; each branch typically contributes meaningfully within 9-12 months. What proves it keeps working: IPO Capital Deployment + Branch Expansion. It stops working if FY27 Q1 credit cost annualized vs guided 3.5-4% range.

Sources: our stock research file (31 May 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. Credit cost peaked during FY25 due to portfolio seasoning in unsecured hypothecation (Rs 1-2 lakh ticket, no formal income documentation). The Q4 FY26 improvement to 4.3% (37 bps QoQ, fifth consecutive decline) reflects collection efficiency reaching 99.5% non-overdue and bucket-1 improvement to 50.8% from 42.8%. Management's path to 3.5-4.0% FY27 and ultimately 3.25% long-run rate implies 60-130 bps further compression. The risk: the Mar→Apr target revision upward suggests management itself has less precision on the endpoint than implied.

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. Credit cost five-quarter low, Q4 PAT +110% YoY, ROE recovers to 16%

Why-sources: our stock research file (31 May 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. Credit cost five-quarter low, Q4 PAT +110% YoY, ROE recovers to 16%

Why-sources: our stock research file (31 May 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. Credit cost five-quarter low, Q4 PAT +110% YoY, ROE recovers to 16%

Why-sources: our stock research file (31 May 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 3.2% 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 mortgage sub-portfolio (Rs 1,350 Cr, 188 branches, 1,300-1,400 personnel) carries materially superior credit quality: PAR 90 2.7% vs hypothecation 5.95%. As mortgage grows from 23% to 30-35% of AUM, blended credit cost structurally declines even without hypothecation improvement. Management's 65-bps ROA uplift estimate from OpEx leverage assumes mortgage contributes via better credit quality AND OpEx ratio improvement from 9.6% to 8.25-8.75%. The target ceiling revision (30% → 30-35%) is a mild concern since higher mortgage share compresses yield.

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. H1 FY26 disbursements were sub-optimal because Aye lacked equity capital to leverage — AUM growth was 27% vs aspirational 30%. Post-IPO CAR of 42.2% and incremental borrowing cost 10.13% create a 2-3 year window to deploy capital without dilution. The FY27 plan adds 40-50 branches focusing on existing Tier 2-3 cities; management notes less-than-9% of growth currently comes from new branches, implying branch productivity is the dominant lever.

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 1.7× P/BV, at the pricey end of its own range (74th percentile). Its long-run median P/BV is 1.6×, measured across 0.3 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 1.7× is at the pricey end of its own range (74th percentile), against a long-run median of 1.6× measured over 0.3 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 full 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 3.2% 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

47.6/100 — rank 6 of 8 in NBFC - Others · 26% evidence confidence · provisional, ranked below fully-evidenced peers

Aye Finance Ltd scores 47.6 out of 100 against the 8 companies it is compared with in NBFC - Others, ranking 6. Fill the missing evidence before acting; the ranking is deliberately pulled toward neutral.

The four contributions add to the total exactly: 16.1 + 11.6 + 9.9 + 10 = 47.6. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if ROA rolls over or gross NPA rises while sector-relative strength deteriorates.

Said versus delivered

What Aye Finance Ltd's management promised, set against what actually arrived — 3 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.

🚨 Q4 FY26 Credit Cost Guidance Missed · 28 April 2026. In the March 2026 call, management explicitly guided that Q4 FY26 annualized credit cost would come in below 4%, describing this as the appropriate level from which to enter FY27. The April 2026 call confirmed Q4 FY26 credit cost at 4.3%, 30 basis points above the stated threshold, with no explanation provided for failing to meet this company-set marker despite it being cited as a key milestone just one quarter prior. Earlier call (Mar 2026): “we should be at a quarterly annualized credit cost of less than 4% which is a good place to start the next financial year and come down to a level”. Later call (Apr 2026): “Credit cost also reduced to 4.3% in Q4 compared to 4.67% in the previous quarter, which is a 37 basis points reduction quarter-on-quarter.”

Normalised Credit Cost Range Revised Upward · 28 April 2026. In the March 2026 call, the 3-year vision explicitly targeted a steady-state credit cost range of 3.25-3.75%. Just one quarter later in the April 2026 call, FY27 guidance was set at 3.5-4%, with the upper bound (4%) already exceeding the prior 3-year vision ceiling (3.75%) and the lower bound rising by 25 basis points. Year 1 of the credit normalisation trajectory is already outside the long-term target corridor with no reconciliation of the two frameworks offered. Earlier call (Mar 2026): “a credit cost to be kept in the range of 3.25 to 3.75”. Later call (Apr 2026): “We expect credit costs to normalize further to the range of 3.5% to 4%.”

🚨 AUM Growth Target Diluted From 3-Year Vision · 28 April 2026. In the March 2026 call, management committed to 'consistent growth of about 30%' as the 3-year CAGR target and flagged FY26 as tracking 29-30% growth. In the April 2026 call, FY27 guidance was set at 25-30%, introducing a 25% lower bound absent from prior communications, while actual FY26 AUM growth came in at 27%, already below the 29-30% trajectory highlighted in March 2026. Together, these suggest the 30% sustained growth thesis may not hold as originally presented. Earlier call (Mar 2026): “we are targeting to get to a consistent growth of about 30%”. Later call (Apr 2026): “For FY27, we target growth in the range of 25% to 30%.”

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

Frequently asked questions