Aptus Value Housing Finance Q2 Results Review - Inline Operating Performance; Guidance Maintained: Systematix

Systematix Research Report

Aptus Value Housing Finance Ltd.'s Q2 FY24 operational performance was in line with our estimates. Net interest income / operating profit at Rs 2.3 billion / Rs 1.9 billion registered a healthy growth of 20% YoY (7.7% QoQ) / 18% YoY (5.0% in QoQ).

Operating expenses increased 20.3% QoQ due to the increase in employee count and branch additions. With credit cost at 0.3%, profit after tax was also inline with our estimates at Rs 1.5 billion.

Assets under management and disbursement growth was strong at 28% YoY / 7% QoQ and 23% YoY / 15.3% QoQ driven by healthy demand and branch expansion.

Net interest margins (calculated) increased by 17 basis points QoQ driven by 50 bps increase in yields (calculated), even as cost of funds increased by 33 bps QoQ.

Aptus Value's asset quality saw an improvement, with gross stage-III/net stage-III marginally down by 10 bps/8 bps to 1.2%/0.9%.

We estimate a 30% compound annual growth rate in Aptus Value AUM which will deliver 21% CAGR in earnings over FY23‐25E resulting in return on asset /return on equity of 6.8% / 18.4% in FY25.

Key risks:

Inflation pressure might impact the demand for home loans.

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