Aptus Value Housing Finance Q2 Results Review - Ahead Of Estimates; Outlook Remains Positive: Systematix

Systematix Research Report

Aptus Value Housing Finance Ltd.'s Q2 FY25 earnings came in ahead of our estimates aided by higher-than expected other income and lower opex, even as credit cost was higher. Net interest income came in-line with our estimates at Rs 2.8 billion registering a growth of 21% YoY (6% QoQ).

Strong growth in other income (53% YoY / 29% QoQ) was led by fee income (~48% of other income), which grew 83% YoY and 21% QoQ. Thus, operating profit/PAT came in higher at Rs 2.5 billion/ 1.8 billion (versus estimates of Rs 2.3 billion / 1.7 billion) registered a growth of 26% YoY (9% QoQ)/23% YoY (6% QoQ).

Credit cost was higher at 41 bps (+24bps QoQ) due to higher provisions made as a conservative measure. Yields as well as the cost of borrowing were steady QoQ at 17.4% and 8.7% respectively.

Net interest margins inched up by 9 bps QoQ to 11.8%. AUM growth was healthy at 27% YoY / 7% QoQ led by pick up in disbursements (26% YoY / 39% QoQ).

Asset quality was steady with GS3/NS3 at 1.3%/0.9%. Management have reiterated their growth guidance and steady trend in asset quality.

We estimate a 29% CAGR in AUM to deliver 26% CAGR in earnings over FY24‐26E resulting in RoA / RoE of 7% / 21% in FY26E.

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