Aptus Value Q1 Results Review - Temporary Blip In Growth, Asset Quality; Outlook Remain Positive: Systematix

Systematix Research Report

Aptus Value Housing Finance India Ltd.'s Q1 FY25 operating performance was marginally below estimates with NI/ OP at Rs 2.9 billion/Rs 2.3 billion versus estimate of Rs 3.0 billion/ 2.4 billion, due to lower-than-expected assets under management growth, even as spreads remain stable at 8.7%.

AUM growth moderated slightly to 27% YoY (versus exp. of 29%) due to sluggish growth in disbursements (4% YoY/ -30% QoQ), as the change in loan originating system software impacted disbursement for one month.

Operating expenses increased 35% YoY as company is investing in branches and technology. While credit cost came down to 16 bps versus 45 bps in Q4 FY24, stage-III provision coverage ratio was maintained at 25%, resulting in in-line PAT.

Asset quality deteriorated with gross stage-III/net stateg-III at 1.3%/1.0% versus 1.1%/0.8% in Q4 FY24 due to seasonality and election. However, management remains confident of strong growth and stable asset quality in FY25. We estimate a 29% CAGR in Aptus AUM to deliver 26% CAGR in earnings over FY24‐26E resulting in return on asset /return on equity of 7% / 21% in FY26

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