Aye Finance vs Icicibank Q3 FY26

Aye Finance delivered a strong Q3 FY26 with PAT surging 87% YoY to ₹43 crore, driven by improving credit quality and operating leverage. Disbursements grew 35% YoY to ₹1,310 crore, while AUM expanded 23.5% YoY to ₹5,232 crore. Credit cost fell to 4.69% of AUM, the fourth consecutive quarterly decline, with collection efficiency on non-overdue loans at 99.3%. Management guided for 29-30% AUM growth in FY26 and a three-year vision of 30% CAGR, credit cost of 3.25-3.75%, and ROA of 4-4.5%. The mortgage book (21% of AUM) is scaling, and repeat loans (39% of growth) enhance efficiency. Key risk: elevated credit costs may normalize slower than expected if macroeconomic stress persists.

Guidance read

FY26 AUM growth of 29-30%: Management expects full-year AUM growth of 29-30%, driven by strong Q4 disbursement momentum. Three-year vision: 30% CAGR, credit cost 3.25-3.75%, ROA 4-4.5%: Over the next three years, the company targets consistent 30% AUM growth, credit cost between 3.25% and 3.75%, and ROA of 4-4.5%. Q4 FY26 annualized credit cost below 4%: Management expects quarterly annualized credit cost to fall below 4% in Q4 FY26, setting up for FY27. Mortgage portfolio to reach 30% of AUM over 3 years: The mortgage loan share is targeted to increase from current 21% to 30% of total AUM over the next three years.

Risk read

Key risks include Bihar regulatory risk from microfinance ordinance — A new Bihar ordinance on microfinance could impact collections, though management believes business loans are less affected and similar past state regulations had minimal impact.; Elevated credit cost normalization may be slower than expected — Credit cost at 4.69% remains above the target range of 3.25-3.75%; any delay in normalization could pressure profitability.; Mortgage team costs weighing on opex — The addition of 1,300-1,400 mortgage staff has increased operating expenses; profitability improvement depends on mortgage book scaling to absorb these costs.; Competition in mortgage lending may pressure yields — Increased supply in the mortgage segment could lead to pricing pressure, potentially offsetting benefits from lower credit costs..

Promise ledger

Scorecard data is being built as historical quarters are processed.

ICICI Bank reported a mixed Q3 FY26 with PAT declining 4% YoY to INR 113.18 billion, impacted by a one-time standard asset provision of INR 12.83 billion directed by RBI for agricultural PSL classification issues. Excluding this, PAT would have grown 4.1% YoY. Core operating profit rose 6% YoY to INR 175.13 billion, supported by NIM stability at 4.3% and fee income growth of 6.3%. Domestic loan growth accelerated to 11.5% YoY, led by business banking (+22.8%) and mortgages (+11.1%), while credit cards declined 3.5% YoY. Asset quality improved with net NPA at 0.37%. Management expects NIM to remain range-bound and loan growth momentum to sustain. Key risks include elevated operating expense growth and potential further regulatory scrutiny on PSL compliance.

Guidance read

NIM to remain range-bound: Management expects net interest margin to stay around current levels in Q4, supported by deposit repricing and lower non-accrual impact. Loan growth momentum to sustain: Sequential loan growth improved in Q3 and management expects this momentum to continue into Q4. Credit card book to improve gradually: After a seasonal decline in Q3, credit card portfolio is expected to grow from current levels.

Risk read

Key risks include RBI-directed standard asset provision may recur — RBI directed INR 12.83 billion provision for agricultural PSL non-compliance; similar observations could arise for other portfolios.; Operating expense growth may remain elevated — OpEx grew 13.2% YoY, partly due to new labour code provisions and PSL compliance costs; management did not commit to moderation.; Credit card book decline may persist — Credit card portfolio declined 3.5% YoY and 6.7% QoQ; management attributed it to seasonality but growth outlook remains uncertain..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.