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ICICI Securities Report
We met Aptus Value Housing Finance Ltd.'s newly appointed Managing Director Mr. P Balaji and Sales, IT and collection head to get a sense of the underlying business trend in affordable housing finance company space and how Aptus is placed to sustain ~30% assets under management growth in medium term.
Our interaction with the top management suggests that with stable management team and focused approach (founder owning ~25% in company and would hold executive chairman position till December 2024), 100% in-house operations helping in lowering customer churn and maintaining customer quality, AUM mix driving steady 17% yield (one of the highest within affordable housing finance company space) and tight control on asset quality, the company is well positioned to outpace industry AUM growth and sustain industry leading profitability in medium term.
It delivered 30% AUM growth and more than 8% return on asset in FY23. The 30 plus days past due bucket, after rising to 12.98% in December 2021, has steadily declined to 5.9%, thereby, reflecting its borrower resiliency and its strong credit model. Gros non-performing loan further moderated to 1.15% and net non-performing loan to 0.86% with provision coverage ratio at 25% as on March 2023.
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