Target: ₹430
CMP: ₹338.15
Aptus Value Housing Finance reported earnings of ₹180 crore (in line with our estimates), up 23 per cent y-o-y and 6 per cent q-o-q. AUM was up +27 per cent y-o-y, within the guided range of 25-30 per cent with disbursements up 26 per cent y-o-y and 39 per cent q-o-q after a weak performance in Q1-FY25. Reported spreads remained flat at 8.70 per cent. However, NIMs on AAUM (calc) increased 9 bps Q-o-Q to 11.8 per cent. Stage 3 came in at 1.25 per cent as compared to 1.19 per cent in Q2-FY24 and 1.30 per cent in Q1-FY25.
As per the management, RBI seems to be uncomfortable with unsecured and MFI loans and secured loans with small ticket size and their product profile does not fall into that category. We build in AUM/PPOP/PAT CAGR at 30/25/25 per cent over FY24-27 and expect RoA/RoE at 6.9/22.1 per cent by FY27.
We roll over to H1-FY27 and continue to assign 4x P/ABV to arrive at our revised TP of ₹430. We continue with Buy rating as company continue to post strong growth, sector leading profitability and stringent control on asset quality. Further, in a falling interest rate scenario, spreads are likely to improve as about 80 per cent of assets carry fixed rate of interest.