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Dolat Capital Report
Aptus Value Housing Finance Ltd. reported a good quarter with-
net interest income growth of 18% YoY/5% QoQ,
stable spreads at +5ps QoQ,
strong loan growth at 8% QoQ, and
improved asset quality metrics, aiding return on asset/return on equity of 7.6%/17.6%.
Yields we up 15 basis points QoQ and have fared better than peers.
Asset quality metrics improved with stage-III at 1.07% (-12 bps QoQ), and 30+ days past due at 5.4% (-63 bps QoQ). Loan growth was driven by home loan (+10% QoQ) and loan against property (+8%). Yields benefited from gradual re-pricing of fixed rate advances, with 50 bps rate hike across home loan/non-HL loans a few months back.
We expect premium valuations (versus peers) to sustain, given superior return ratios and limited spread pressures. We build in profit after tax compound annual growth rate of 24% over FY25/26E versus 22% YoY in FY24.
The stock trades at 3.3 times FY26E against RoA/RoE at 7%/20%. Tweaking estimates, maintain ‘Buy' rating with unrevised target price of Rs 450 (4.4 times FY26E price/book value).
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