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Systematix Report
Aptus Value Housing Finance India Ltd.'s Q3 FY24 operational performance was in line with our estimates. Net interest income / operating profit at Rs 2.4 billion / Rs 2.1 billion registered a healthy growth of 20% YoY (5% QoQ) / 21% YoY (9% QoQ). Operating expenses declined 4% QoQ led by lower employee and other expenses, resulting in opex to asset under management ratio at 2.6% (versus 2.9% in Q2).
Despite higher credit cost during Q3 at 41 basis points (versus 30 bps in Q2), profit after tax was also broadly in-line with our estimates at Rs 1.6 billion. AUM/ disbursement growth was strong at 28% YoY/ 27% YoY driven by healthy demand and branch expansion.
Net interest margin (calc) declined by 16 bps QoQ, due to fall in yields (36 bps QoQ). Cost of borrowings (reported) increased by 14 bps QoQ. Asset quality was steady, with gross stage 3/net stage 3 at 1.2%/0.9%.
We estimate a 29% compound annual growth rate in Aptus AUM which will deliver 21% CAGR in earnings over FY23‐26E resulting in return on asset / return on equity of 6.5% / 19.6% in FY26.
Key risks: Inflation pressure might impact the demand for home loans.
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