Were the quarterly number for Q4 encouraging in the case of Aavas Financiers?

Microfinance company, Aavas Financiers, reported a rather healthy 26.13% growth in revenues for the Mar-22 quarter at Rs.365.09 crore on a comparable yoy basis. Revenues were higher sequentially by 6.57%. FY22, revenues were higher up 18.33% at Rs.1,305 crore. The big contribution to the top line came from the spike in interest income; up nearly 20%. That, in a way, contributed to the rise in the top line. Higher interest income was boosted by better yields and lower incidence of NPAs arising in the quarter.

For the fourth quarter, the net profits were up by 32% at Rs.115.47 crore, with an almost equivalent growth of 30.1% on a sequential basis. The secret was a spike in net interest spreads. That is because the increase in interest costs was marginal against a sharp 20% rise in interest income. This boosted net interest margins or NIMs for the quarter. Solvency also improved as evident from lower NPA levels. Net profit margins stood at 31.63% in Mar-22 quarter compared to 30.21% in Mar-21. The PAT margins were also higher sequentially compared to 25.91% in Q3.