Localized stress in eastern Madhya Pradesh
Management identified stress in the eastern belt of MP and tightened underwriting; though contained, further deterioration could impact asset quality.
AAVAS / Q2-FY26 / risks
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Aavas Financiers · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
MFI spillover risk in Karnataka
Analyst raised concern about MFI ordinance impact; management acknowledged early tightening but residual risk remains if microfinance stress spreads to affordable housing.
Balance transfer out rate elevated at 5.7%
BT-out rate increased to 5.7% in Q2 from 4.9% in Q1, driven by competitive pressure from banks and other HFCs; retention efforts may not fully offset.
Potential PLR reduction pressure on spreads
Management hinted at possible PLR cut if MCLR transmission occurs, which could compress spreads if cost of funds does not decline further.